Korean Convenience Store Owners Association to Release Statement on 25th
[Asia Economy Reporter Minyoung Cha] Convenience store owners have raised concerns that the 'on-demand supermarket' services created by major delivery platform companies are encroaching on neighborhood commercial districts. They have called for the suspension of these services and emphasized the urgent need to introduce public delivery applications to counteract this trend.
The Korea Convenience Store Owners Association issued a statement on the 25th, claiming, "Delivery platform companies Baedal Minjok and Yogiyo are aggressively promoting ‘B Mart’ and ‘Yo Mart,’ which purchase products in bulk and deliver them directly, raising concerns about the collapse of neighborhood commercial districts and intermediate distribution networks."
They added, "B Mart and Yo Mart threaten the existing distribution order entirely by purchasing products in bulk directly or manufacturing and supplying private brand (PB) products. These companies focus on supplying food ingredients, daily necessities, and pet products traditionally handled by supermarkets, convenience stores, and small to medium-sized marts, making the collapse of neighborhood commercial districts inevitable."
Furthermore, they stated, "In addition, intermediate wholesalers who supplied products to supermarkets and small to medium-sized marts are losing their place, which is expected to lead to the collapse of the entire distribution network."
Baedal Minjok launched B Mart in November last year, a service that purchases products in bulk and delivers them directly to consumers, and has since expanded its service area to the Seoul metropolitan area. Yogiyo began pilot operations of Yo Mart in Gangnam, Seoul, on the 16th.
In the case of Yogiyo, there are even allegations that information obtained during convenience store delivery services was used in the process of launching Yo Mart. Most convenience store brands such as GS25, CU, and Seven Eleven conduct delivery services through Yogiyo, and it is suspected that convenience store-related information was utilized during the launch of Yo Mart.
There are also claims that Baedal Minjok and Yogiyo have been free from regulations due to their status as foreign companies. Their parent company, Germany-based Delivery Hero, is said to be in a regulatory blind spot as a foreign enterprise. While large marts are subject to various restrictions from entry to operating days, hours, and product categories, as well as cooperative evaluation to protect traditional markets and neighborhood commercial districts, foreign companies are exempt from these regulations.
Choi Jong-yeol, chairman of the CU Franchise Store Owners Association, stated, “After Baedal Minjok was acquired by Germany’s Delivery Hero and effectively gained a monopoly in Korea, it unilaterally changed the delivery fee system in May, drawing fierce criticism from self-employed business owners. It is clear that once B Mart and Yo Mart dominate the market and distribution network, they will likely abuse their monopoly position, which is expected to harm consumers.”
Kim Min-mo, chairman of the Emart24 Franchise Store Owners Association, also pointed out, “Baedal Minjok and Yogiyo have continuously advocated coexistence with self-employed business owners, but no genuine efforts have been seen so far. During the launch of Yo Mart, they promised to establish coexistence measures in consultation with tenant companies, but there was no prior consultation with convenience store owners or headquarters.”
Meanwhile, on the 4th, the Korea Convenience Store Owners Association proposed to the Ministry of Trade, Industry and Energy to focus on nurturing one or two public delivery apps to resolve issues caused by the proliferation of public delivery apps, in relation to local governments developing public delivery apps to counter the monopoly of Baedal Minjok and Yogiyo delivery services.
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