Regulations Coming Down... Ku, Bae, and Ya Rush Forward with Win-Win Plans

Proactive Win-Win Proposals Presented One After Another Before and After the National Audit

Around this year's National Assembly audit, platform companies representing each sector?e-commerce, delivery, and accommodation?such as Coupang, Woowa Brothers, and Yanolja, are racking their brains to devise win-win plans. This is because the recognition is spreading that coexistence with small business owners, the key participants in platform business, is an essential condition for sustainable growth. Amid rising calls from the government and political circles for platform regulation, there is also concern that if conflicts with small business owners arise, innocent parties might get caught in the crossfire. Coupled with the criticisms directed at platform companies during this audit, it appears there is a plan to proactively propose alternatives before regulations are strengthened through related legislation.

According to the related industry on the 14th, Coupang is reviewing a win-win plan that takes into account small business owners and the local economy. Coupang’s win-win plan is expected to be promoted as an extension of its existing efforts to expand digital sales channels for small business owners. Coupang has been promoting the sales of small business products by continuously operating initiatives such as the ‘Cheer Up! Republic of Korea’ campaign, which supports sales expansion and advertising and promotional activities for small business owners located in seven local governments nationwide, as well as the ‘Small Business Product Exclusive Section’ and the ‘Regional Agricultural and Marine Products Specialty Section.’ This year, through a win-win agreement signed with the Fair Trade Commission, the distribution industry, and small suppliers, Coupang has also been helping small business owners and agricultural, fishery, and livestock producers pioneer digital sales channels. To this end, it has raised 400 billion KRW in support funds this year alone.

◆ Platforms Struggling to Devise Win-Win Plans = Woowa Brothers, which operates Baedal Minjok (Baemin), is also continuously introducing policies for coexistence with small business owners. Since last year’s COVID-19 crisis, support measures have been expanded not only for small business owners but also for local children, medical staff, and riders. As of July, the support funds used to overcome the COVID crisis amounted to 81.3 billion KRW, including a 50% refund on advertising costs for small business owners, interest support for small business policy loans, and exemption from service brokerage fees.

The cumulative number of participants in free business training conducted since 2014 to support restaurant owners has surpassed 100,000. The ‘Woowa Rider Care Fund,’ established in 2019 with personal funds from Kim Bong-jin, chairman of Woowa Brothers, provides emergency medical and living expenses to riders and restaurant owners. As of August, approximately 387 million KRW has been provided to 67 people. A Woowa Brothers official stated, "We have been preparing and implementing various support measures even before the recent issues regarding coexistence between online platform companies and small business owners emerged."

Yanolja has also recently introduced a series of win-win plans. Last month, it reduced commissions by up to 50% for all newly contracted small and medium-sized hotels for two months and refunded the entire search advertising cost as coupons to all affiliated partners using search ads. To promote regional coexistence, it recently established a customer center in Daejeon following Chuncheon. It has also formed a fund to nurture tourism venture companies.

◆ Platform Companies’ Precarious Situation = The reason these companies are putting effort into devising win-win plans is that the situation surrounding online platforms is not easy. Coupang has faced criticism from small business owners for systems like ‘Item Winner,’ which are said to fuel competition. Prioritizing the exposure of private brand (PB) products in searches has been pointed out as an abuse of the platform’s monopoly position. Baemin has also faced issues such as controversies over B Mart’s infringement on neighborhood markets, brokerage fees, and delivery riders’ safety. Accommodation platforms like Yanolja have had conflicts with existing lodging businesses.

However, there are concerns that excessive regulation of platform companies that are independently making efforts to devise win-win plans could hinder the growth of the industry ecosystem. Kim Young-gyu, head of policy at the Korea Startup Forum, pointed out, "If problems arise, they can be resolved by market principles, and if corporate tyranny occurs, regulations should be imposed then. Preemptive regulation restricts growth." He added, "Startups need an ecosystem environment where they can perform well while competing with global companies."

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