South Korea is pushing to revise a longstanding retail law that bars major supermarket chains from offering overnight delivery, a change that could reshape competition between brick-and-mortar retailers and more nimble online platforms.
At a policy meeting in Seoul on Sunday, government officials and Democratic Party of Korea lawmakers agreed to revise the Distribution Industry Development Act to allow large supermarket chains to offer early-morning deliveries, which are now restricted between midnight and 10 a.m.
Introduced in 2012 to protect traditional markets and neighborhood stores, the law aimed to curb large supermarket chains but is now seen as favoring online platforms that have since become a dominant force in retail.
"Rapid changes in the retail environment, including the expansion of online commerce, make it necessary to improve the current offline-centered regulatory framework," Democratic Party senior spokesperson Park Soo-hyun said Sunday, adding that officials agreed to pursue revisions to the law.
"We agreed that the regulatory imbalance between online and offline players should be resolved to create fair competition," he explained.
Long viewed by large retailers as outdated, the debate gained urgency after a major data breach at e-commerce giant Coupang renewed scrutiny of the company's rapid expansion and the regulatory blind spots helping it thrive.
Deregulation would allow chains to quickly launch overnight delivery services through their nationwide store networks, allowing more flexible responses to regional demand using existing infrastructure.
Industry estimates show the three largest operators — E-mart, Lotte Mart and Homeplus — run about 670 stores nationwide, with roughly 460 already serving as logistics hubs, nearly double Coupang's 246 registered logistics centers.
"Allowing supermarkets into overnight delivery would widen consumer choice and finally put them on equal footing with online retailers," an industry official said.
Still, lawmakers face a balancing act between modernizing retail regulation and preserving protections for small businesses and workers in a rapidly changing sector, even as government officials pledge measures to support traditional markets, along with safeguards to protect delivery workers' health and safety.
Labor groups argue that expanded overnight operations would intensify already demanding conditions in the retail and delivery sectors, subjecting understaffed workplaces to heavier workloads, while service unions warn the move risks entrenching harsh labor practices associated with online delivery services.
Small business groups likewise contend the proposal runs counter to policies designed to protect neighborhood commercial districts.
"By removing restrictions on large supermarket chains, the government would push small business owners already squeezed by an economic slowdown into cutthroat competition with major corporations," said an official at a Seoul-based small-business federation.
The official added that the Coupang controversy reflects authorities' failure to curb monopoly power among online platforms, not restrictions on large supermarkets.
minmin@heraldcorp.com
