Attention is focused on whether discussions to amend the Distribution Industry Development Act to ease business restrictions on big-box retailers will regain momentum after the June 3 local elections. The amendment would shift mandatory closure days for big-box retailers to weekdays and allow online dawn delivery.
According to the industry on the 31st, the National Assembly's Trade. Industry Energy. SMEs. and Startups Committee recently introduced an amendment to the Distribution Industry Development Act containing these provisions and referred it to a subcommittee.
The key is to exclude business activities for e-commerce from the operating-hour restrictions that apply to big-box retailers and quasi-large stores. If the bill passes, big-box retailers nationwide will be able to offer dawn delivery at all stores without separate local government action.
In the retail sector, the view is that the current regulations are instead weakening the competitiveness of big-box retailers. Big-box retailers face constraints in running dawn delivery because store operations are restricted after midnight, while online-based e-commerce firms are not regulated, creating an uneven competitive environment.
Debate continues over the effect of the regulations. The Distribution Industry Development Act was introduced in 2012 to protect traditional markets and neighborhood business districts, but recently there have been critiques that its effectiveness has waned with changing consumption patterns. As online shopping has become routine, the regulations on big-box retailers have been assessed as creating an environment more favorable to the growth of e-commerce than to traditional markets.
In fact, the Korea Development Institute (KDI) also released an analysis finding no clear evidence that shifting mandatory closure days for big-box retailers from weekends to weekdays reduced sales at traditional markets and surrounding commercial districts.
However, the bill is expected to face continued friction before passage. Supermarket workers argue that mandatory closures and operating-hour limits are the minimum measures to ensure the right to rest. Small-business groups are also pushing back, saying that easing regulations on large retailers could hurt local commercial districts.
The Korean Confederation of Trade Unions (KCTU) supermarket union recently said in a statement that "the government and ruling party's expansion of dawn delivery destroys the retail ecosystem and encourages workers' death from overwork," calling it "a pro-chaebol policy for retail conglomerates."