#1. As Homeplus Co. said it would keep suspending store operations and began reviewing the sale of some locations, the union started speaking up again. Regardless of court approval, it is pushing ahead with an unprecedented, large-scale shutdown, effectively moving to dismantle Homeplus Co. Homeplus Co. on the 14th cited worsening finances and decided to additionally suspend operations at seven stores. The newly announced stores for suspension that day were Munhwa, Busan Gamman, Ulsan Nam-gu, Jeonju Wansan, Hwaseong Dongtan, Cheonan and Jochiwon.
#2. E-commerce company Coupang is under fire that its compensation plan for a massive personal data leak is effectively a sales-promotion scheme. The backlash grew after it was confirmed that the consumer coupons provided as compensation come with numerous usage restrictions. The retail industry criticized it as a "brazen compensation plan," saying there is no clear substitute for Coupang among e-commerce firms.
The controversy surrounding Homeplus Co. and Coupang continues into the new year. The retail industry points to the Distribution Industry Development Act as the reason Homeplus Co., once the No. 2 hypermarket operator, has reached a stage where liquidation is being discussed, and as the backdrop for Coupang's brazen response to the data leak scandal. They say the law, wrongly made by Korea's National Assembly, hobbled the once-thriving Homeplus Co. and allowed Coupang to grow into a de facto monopolist.
According to the industry on the 15th, the Distribution Industry Development Act has been in force since 2012 with the goal of the efficient development of the retail sector and mutual growth. The core provisions require hypermarkets and super supermarkets (SSM) to close twice a month and ban late-night business from midnight to 10 a.m. It was created in response to calls to protect traditional markets and neighborhood businesses.
The problem is that more than 13 years after the system was introduced, it has failed to protect traditional markets and neighborhood businesses. In an era when online shopping has taken hold, it has had the effect of only boosting e-commerce companies like Coupang, while depriving hypermarkets of the chance to adapt to changing times.
According to the Ministry of Trade, Industry and Energy, the share of hypermarkets in total retail sales fell to 11.9% last year, while online surged to 50.6%. Specifically, starting in 2023, Coupang began to surpass the combined sales of the three major hypermarkets—E-MART, Homeplus Co. and Lotte Mart. Coupang's revenue climbed steeply from 13.33 trillion won in 2020 to 41.2901 trillion won in 2024. In contrast, over the same period, the combined annual sales of the three hypermarket operators stayed in the 27 trillion won to 28 trillion won range. It is effectively stagnant. In the case of Homeplus Co., which filed for court receivership, the company estimates that the mandatory twice-a-month closures cut about 1 trillion won from annual sales.
Restrictions on business hours are also a problem. Hypermarkets could not even attempt "dawn delivery," a core service of e-commerce firms. A hypermarket official said, "If only the business hour restrictions were lifted, we could compete on the same footing with e-commerce companies like Coupang and make dawn delivery possible," and added, "More choice would benefit consumers, so we don't understand why this is banned."
Another hypermarket official said, "You need the capability to bring sellers and consumers onto a shopping platform and a logistics system, but Naver has no logistics centers," adding, "Hypermarkets own stores, and these can serve as logistics hubs, but due to regulations we can't do anything."
The retail industry sees a lack of parliamentary efforts to revive Homeplus Co. It also believes there is virtually no attempt to neutralize Coupang's brazen response after it leaked personal data on a massive scale and launched its own internal review.
A retail industry official said, "No matter how much you scold them at a joint hearing, it won't work. We're in a position of begging for a moral apology or compensation," and added, "To resolve Coupang's monopolistic status, the Distribution Industry Development Act should be repealed to create meaningful competition in e-commerce. This is a time for precise industrial policy." Despite such calls from the retail industry, the act was extended for four years on Nov. 23 last year ahead of its expiration. As a result, unless the law is revised again, this regulation will end up lasting nearly 20 years.
Academia also argues that an anachronistic law whose policy effect has not been verified should be changed. Lee Jong-woo, a professor of business administration at Ajou University, said, "Since 2010, the e-commerce market has established itself rapidly, but laws and systems have been created out of step with the times," adding, "The problem is that the laws and systems are being maintained without keeping up with these changes."