Digital Economy Forum: "E-commerce Platforms Should Prioritize Ecosystem Assessment Over Uniform Regulation"

[Asia Economy Reporter Seungjin Lee] The Digital Economy Forum diagnosed at the seminar on ‘Policy Directions for Coexistence and Development of the E-commerce Platform Ecosystem’ that an accurate understanding of the ecosystem environment must precede for the platform ecosystem to grow.

At the seminar held on the 1st in Gwanghwamun, Seoul, the Digital Economy Forum stated, “Since the government’s policy stance related to the Online Platform Fairness Act is ‘promoting innovative growth through platform self-regulation,’ digital economy policies should be considered in a way that allows the platform ecosystem to grow further,” adding, “A pinpoint approach to issues is needed rather than a uniform approach.”

In this regard, Professor Daehong Lee of Sungkyunkwan University explained, “Online platforms have no restrictions of time and space, allowing 80% of products that were previously marginalized to gain sales opportunities with customers. Businesses not located in prime areas are also being well discovered by potential customers, and the ecosystem has grown by overcoming the limitations of online trust through various review data.”

He continued, “Recent Online Platform Three Acts impose various obligations on online platform operators and strengthen legal responsibilities. However, mandatory algorithm disclosure and regulations on personalized advertising provide more opportunities for abuse and increase access costs to target customers, causing negative effects on general consumers and small business owners, which may reduce overall social welfare.”

There were continued remarks on the need for overall diagnosis and pinpoint regulation rather than uniform regulation of e-commerce platforms. Professor Kyutae Kwak of Soonchunhyang University said, “Within e-commerce platforms, there are various types such as decentralized and centralized platforms depending on openness. Since it is not easy to judge and implement policies for platforms with such diverse characteristics by a single standard, academic efforts to increase the resolution of platforms are necessary.”

Meanwhile, according to the ‘2021 E-commerce Ecosystem Report’ published by the Digital Economy Forum, e-commerce platforms help new businesses start easily as they can reach the break-even point relatively quickly with lower initial capital and shorter preparation periods compared to offline.

E-commerce sellers invest an average of 12.5 million KRW to enter shopping malls and take 4.4 months to prepare for startup, with an average of 5 months to reach the break-even point. In contrast, offline businesses invest an average of 90 million KRW and require 9.7 months of preparation.

Also, for e-commerce sellers, online advertising is an important marketing tool for sales, and in a market environment where small capital startups are significant, highly efficient online personalized advertising was found to be the most preferred.

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