Targeting Delivery Brokerage Platforms
Regulations on Online Grocery Shopping Services
Including Dawn Delivery Companies
If the Win-Win Act Amendment Passes
Impact on Product Listings and Business Hours
Industry: "Consumers and Partners Suffer"
Negative Public Opinion on 'Downward Standardization' Surges
[Asia Economy Reporter Cha Min-young] "This regulation considers only the interests of a specific group without recognizing consumer inconvenience or changes in the times." (E-commerce industry insider)
The National Assembly's proposed amendment to the "Fair Trade Cooperation Act for Large and Small Businesses," which regulates the 'online grocery shopping service' of delivery brokerage platforms and dawn delivery specialized e-commerce companies, is expected to be reconsidered amid industry backlash and public criticism. The draft amendment includes not only the items sold but also business hours, leading to strong opposition from the industry. Dawn delivery companies are on high alert as the essence of their 24-hour logistics system, which is the foundation of their delivery competitiveness, could be shaken.
National Assembly Takes a Step Back
On the 8th, a representative from the office of Shin Young-dae of the Democratic Party of Korea said, "We are coordinating to minimize industry damage regarding the amendment to the Fair Trade Cooperation Act," adding, "Since the target is online distribution companies, regulations on business hours or holidays are difficult, and discussions are focusing on limiting the scope to sales items or categories." The proposed submission date, initially expected in mid-month, is also likely to be postponed.
The purpose of the bill is to establish institutional measures to prevent damage to traditional markets and small business owners caused by the intrusion of delivery brokerage platforms into local commercial districts. It aims to define online platform intermediaries and include them under the business adjustment system for regulation. In particular, the bill includes a provision allowing small business owners in the relevant area to apply for business adjustment to the Korea Federation of Small and Medium Business, enabling direct regulation of businesses that own logistics warehouses and purchase goods directly for sale. The office expects that if the amendment passes, it will be possible to demand adjustments to sales items such as daily necessities and business hours.
Direct Hit to Online Distribution
The initial targets of the bill were delivery brokerage platforms operating marts, such as Yogiyo (YoMart) and Baedal Minjok (B Mart), but the situation escalated when it was proposed to directly regulate businesses that own logistics warehouses and purchase goods directly for sale. Most dawn delivery companies, including Coupang (Rocket Delivery), SSG.com (Sseuk Delivery), Market Kurly, and Oasis, are included.
The online distribution industry argues that small business owners supplying local agricultural, fishery, livestock products, and processed foods will actually suffer damage. As a result of the Small and Medium Business Distribution Center under the Ministry of SMEs and Startups collaborating with SSG.com, Market Kurly, Oasis Market, and others to support small business owners, SSG.com saw a 45% increase in small business sales, while Market Kurly and Oasis Market nearly doubled and quadrupled their transaction volumes, respectively. An industry insider urged, "This is a completely different matter from the old SME-compatible industries where large corporations' entry was restricted," adding, "Many of the products sold are made by small business owners, so we need to reconsider the meaning of coexistence."
Concerns Over Reduced Consumer Benefits
The policy to restrict business hours, which faced particularly strong opposition from the industry, raises concerns about reduced consumer benefits. On the large online community Blind, negative opinions continue, such as "I don't understand why we have to be inconvenienced to save traditional businesses," "It's a policy that is too far behind market trends, telling us to sell fresh food after letting it sit," and "It ignores fundamental issues like improving product quality in traditional markets and creates a downward leveling society through regulation."
An industry insider lamented, "Dawn delivery is a system that can only function smoothly when there is a continuous 24-hour flow from direct shipment from production sites to logistics and delivery to customers' homes," adding, "The moment the business closes, all efforts to maintain freshness go to waste."
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