[Exclusive] Early-Morning Delivery by Big-Box Stores Near Reality? "Small-Business Protection Measures Already Under Review"

As the ruling party, the government, and the presidential office have recently begun legislative moves to lift restrictions on early-morning delivery by large discount stores, the government has started working on supplementary measures for small business owners and traditional market merchants, who are expected to suffer direct damage. While it agrees on the need to ease regulations in line with the changed retail ecosystem, its stated policy is to focus on establishing safeguards to minimize harm to small business owners.

A ramen display at a large supermarket in Seoul.

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According to related industries and the government on the 6th, the Ministry of SMEs and Startups is reviewing supplementary measures to minimize damage to small business owners and traditional market merchants, based on an assessment of how the currently promoted revision of the Distribution Industry Development Act (Distribution Act), led by the National Assembly and the government, will affect them. If early-morning delivery by large discount stores becomes a reality, order volumes are expected to increase significantly compared to now, so one alternative under discussion is to expand and guarantee opportunities for small businesses to supply goods to large discount stores. The ministry plans to collect opinions from organizations such as the Korea Federation of Micro Enterprise and the Korea Merchant Association, and then flesh out related measures.

Vendors are steaming corn and waiting for customers at Jungang Market in Wansan-gu, Jeonju, North Jeolla Province. Yonhap News

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An official at the Ministry of SMEs and Startups said, "If early-morning delivery by large discount stores begins, we are considering win-win measures focused on sectors where business areas are highly likely to shrink, and looking at what benefits we can provide," adding, "We are continuing to meet with small business organizations to listen to their difficulties and opinions."

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On the 4th, the Democratic Party of Korea and the government discussed a reform agenda centered on resolving regulations on early-morning delivery by large discount stores at a working-level meeting held at the Export-Import Bank of Korea in Yeongdeungpo-gu, Seoul. The current Distribution Act includes a provision restricting the business hours of large discount stores from 12:00 a.m. to 10:00 a.m. The idea is to add an exception clause stating that "this shall not apply to business activities for electronic commerce," thereby allowing early-morning delivery. The restriction on the business hours of large discount stores was introduced in 2013 to protect neighborhood commercial districts and small business owners, and its sunset clause has since been extended twice. In September last year, a bill led by the Democratic Party to extend the regulation’s sunset period until November 2029 also passed.

However, as a result, it appears that only e-commerce companies, which exploited loopholes in the law, have been able to scale up, leading to a perceived need to revise the relevant legislation. Observers also say that the recent personal data leak incident at Coupang, which put the issue of platform market monopolies in the spotlight, had an impact. A Democratic Party lawmaker who attended the working-level meeting explained, "Recently, the gap between online and offline markets has been widening continuously, and out of the sense that this situation cannot be left as it is, there were discussions about the distribution industry as a whole."

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Meanwhile, organizations such as the Korea Merchant Association are expected to clash with the government going forward, as they maintain the position that they will block the legislation itself regardless of any additional government measures. The Korea Merchant Association is reportedly planning to visit the National Assembly to meet Democratic Party lawmakers and convey its position. Lee Chung-hwan, head of the merchants’ association, said, "Regardless of the government’s supplementary measures, our stance is that the legislation itself must not proceed. This is not a concept of giving and receiving and trading something like in a market," adding, "Allowing early-morning delivery by large discount stores is like killing all 700,000 traditional market merchants just to rein in Coupang. If the legislative push becomes full-fledged, we will not hesitate to take collective action."

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