As the Distribution Industry Development Act marks 14 years since it took effect on the 17th, voices in the retail industry are growing that the law needs to be revised because it has failed to serve its original purpose.
According to the retail industry on the 11th, the Distribution Industry Development Act took effect in Jan. 2012 under the banner of protecting neighborhood commercial districts, including traditional markets. The law mandates two shutdown days a month for hypermarkets and super supermarkets (SSM) and restricts operations from midnight to 10 a.m. Ahead of its expiration on Nov. 23 last year, a revision bill to extend the sunset clause by four years to Nov. 23, 2029 passed the National Assembly's plenary session. If the law is not revised again, the regulation will continue for nearly 20 years.
Within the retail industry, there is criticism that the regulations have distorted the retail market by failing to uphold their original intent and not reflecting rapid industry changes.
In practice, hypermarkets are barred at night from taking products off shelves in stores for packing and shipping. Using stores as urban logistics hubs is also not allowed under current law. As a result, offline retailers such as hypermarkets are unable to compete in the dawn delivery market.
In fact, Coupang's annual sales have outstripped the combined sales of the three major hypermarket chains—Emart, Homeplus Co., and Lotte Mart—since 2023. While Coupang's sales rose from 13.3 trillion won in 2020 to 41.2901 trillion won in 2024, the combined sales of the three hypermarkets stayed in the 27 trillion won to 28 trillion won range over the same period, showing stagnation.
The gap is also clear in consumer indicators. According to the Korean Statistical Information Service (KOSIS), the retail sales index for hypermarkets in Nov. last year was 83.0, down 14.1% from the previous month. This is the third-largest drop on record since statistics began.
According to the Ministry of Data and Statistics (MODS) Korean Statistical Information Service (KOSIS) on the 4th, the retail sales index for hypermarkets in Nov. last year was 83.0, was found to have fallen 14.1% from the previous month. This is the third-largest drop on record since statistics began.
Industry players are calling for easing regulations such as limits on operating hours. When the law was enacted, it regulated 24-hour operations by hypermarkets and also restricted delivery times. Compared with online corporations that can offer dawn delivery, hypermarkets are being unfairly disadvantaged.
In 2024, a bill to revise the Distribution Industry Development Act was introduced to allow online operations during regulated hours for hypermarkets so that dawn delivery would be possible, but it remains pending in the National Assembly.