"If Large Mart Operating Restrictions Are Lifted, Dawn Delivery Would Be Possible"… Passage of the Bill Remains Uncertain

[With Corona③] Tight Distribution Regulations
"Improvement Even If Only Online Is Eased"... Consumers Raise Their Voices
Related Bills Proposed but... Distribution Industry Development Act Faces Ruling Party and Opposition Disagreements

[Asia Economy Reporter Lim Chun-han] Amid expectations that the trend of contactless services will continue even after COVID-19, it is anticipated that simply easing and resolving distribution regulations could significantly reduce the service gap between the metropolitan area, large cities, and small to medium-sized cities in the provinces.

◆Need to Lift Online Restrictions on Large Discount Stores = On the 17th, a distribution industry insider said, "Even if only the online restrictions on mandatory closure and operating hours currently imposed on large discount stores are lifted, distribution companies with regional hubs in each area could expand dawn delivery and immediate delivery services throughout the region," adding, "This would greatly enhance convenience for residents of small and medium-sized cities and reduce regional disparities through the expansion of contactless services."

According to the National Assembly Legislative Information System, on June 6, Assemblyman Ko Yong-jin of the Democratic Party of Korea (DPK) introduced a bill to amend the Distribution Industry Development Act. The core of this bill is to exclude large discount stores and quasi-large-scale stores from mandatory closure and operating hour restrictions when conducting telecommunication sales under the Act on Consumer Protection in Electronic Commerce, etc. Assemblyman Lee Jong-bae of the People Power Party also proposed a bill to exempt large discount stores and quasi-large-scale stores from mandatory closure day restrictions when conducting online shopping operations.

Under current law, large discount stores cannot process online orders from midnight (12 a.m.) to 10 a.m. due to twice-monthly mandatory closure days and a ban on operating after midnight. While companies offering dawn delivery have rapidly grown, large discount stores remain hampered by distribution regulations. Assemblyman Ko pointed out, "Restricting online operations, which have already become common in retail, on mandatory closure days for large discount stores constitutes reverse discrimination that hinders fair competition and needs improvement."

◆Ruling and Opposition Parties Clash Over Complex Shopping Mall Regulations = The Democratic Party holds the position that all aspects of the Distribution Industry Development Act should be discussed comprehensively. A Democratic Party official said in a phone interview that day, "We need to look at the entire distribution industry, including online sectors and complex shopping mall regulations," adding, "Discussions are expected in November after the national audit. There are so many contentious issues that it is uncertain whether it can be resolved quickly." Currently, the likelihood of passing a bill solely to ease online operation regulations is low. Ultimately, with significant disagreements between the ruling and opposition parties over complex shopping mall regulations, it remains uncertain whether the bill will pass.

The government and ruling party have been pushing for the Distribution Industry Development Act since early this year but have postponed discussions due to negative public opinion and industry opposition. The Democratic Party’s representative bill, proposed by Assemblyman Hong Ik-pyo, mandates local governments to restrict operating hours and enforce mandatory closure for complex shopping malls such as Starfield and Lotte Mall. The bill expands the current restrictions on late-night operations and twice-monthly mandatory closure days, which apply to large discount stores and corporate supermarkets (SSMs), to include complex shopping malls. Assemblyman Lee Dong-joo of the Democratic Party also introduced a bill to include complex shopping malls, department stores, duty-free shops, and specialty stores under operating regulations.

◆Consumers Also Call for "Regulation Easing" = Not only large discount stores but also consumers in small and medium-sized cities in the provinces are raising their voices for easing regulations rather than tightening them. If the bill to ease online operation regulations passes, nationwide stores could be utilized as logistics hubs. A large discount store official said, "Until now, due to distribution regulations, the playing field has been tilted against the e-commerce industry," predicting, "If regulations are lifted this time, dawn delivery and weekend delivery will become possible even in the provinces." Currently, E-Mart operates about 110 PP centers, which are in-store online order processing spaces. Lotte Mart has established smart stores and semi-dark stores for online delivery, and Homeplus has 107 stores functioning as logistics centers.

Consumers’ calls for easing regulations are also growing louder. About half of the MZ generation (Millennials + Generation Z) oppose operating restrictions on large discount stores. On the 13th, the Federation of Korean Industries announced that a survey commissioned to market research firm Monoresearch, targeting 1,000 people in their 20s and 30s, showed that support for easing operating restrictions on large discount stores (48.0%) was more than four times higher than opposition (11.6%). Office worker Kim said, "Nowadays, service areas have become more important, but distribution regulations block proper use of contactless services," adding, "Regulation relief is absolutely necessary even from the perspective of balanced regional development."

This content was produced with the assistance of AI translation services.