[Public Voices] Early Morning Delivery Restrictions Are a Minimum Social Safety Net

Kihong Bang, President of the Korea Federation of Small and Medium Business Owners and Self-Employed

Recently, following the Homeplus crisis, there has been a growing demand for abolishing restrictions on operating hours (early morning delivery) for large discount stores. The argument is that struggling hypermarkets should be allowed to offer early morning delivery so they can compete on equal footing against online shopping giants such as Coupang. Proponents, citing consumer convenience, even claim that these rules are outdated and call them “old-fashioned regulations.”

However, most arguments for abolishing restrictions on operating hours (early morning delivery) cleverly distort the essential purpose of necessary regulations. Operating hour limits for large discount stores were introduced as a basic safety net to protect local small businesses, grounded in social consensus.

In reality, hypermarkets can enter the early morning delivery market at any time by establishing separate logistics centers. For example, Shinsegae (SSG.COM) entered the early morning delivery market using dedicated online logistics centers (NEO) in locations such as Gimpo and Yongin. Consumers seeking early morning delivery already have options through Coupang, Kurly, SSG, Naver Shopping, Oasis Market, and Baemin's B Mart. Competition is already intense in the early morning delivery segment. Even large players such as Lotte ON, GS Fresh, and HelloNature have exited the market due to the cost of building logistics centers, maintaining cold chains, and the burden of night-time labor costs.

"The notion that 'protecting small businesses equals undermining consumer benefits' is a frame shift and a stigmatization"

Despite this, large retail companies continue to cling to their brick-and-mortar store-centric models and only demand deregulation. This is largely an attempt to frame existing small business protection policies as useless obstacles that undermine consumer welfare.

It is akin to a heavyweight competitor (hypermarket, weighing over 100kg) complaining after being outperformed by a heavyweight champion (Coupang), and suddenly demanding the rules be changed so that they can fight with flyweight contenders (local small business owners, weighing only 40kg). If hypermarkets genuinely want to build competitiveness, they should strengthen their online offerings, not demand that the protective gear be removed from lighter competitors.

Advanced countries also maintain strong and intricate regulations tailored to their own circumstances, in order to diversify domestic retail ecosystems and protect small business owners. For example, France recognizes that uncontrolled expansion of large retail chains destroys local commerce, and through the “Loi Raffarin,” requires strict municipal approval for opening large stores beyond a certain size. Although the approval threshold was relaxed from 300m² to 1,000m², this remains a prime example of simultaneously protecting local business owners’ right to operate by managing the commercial landscape.

"We should take reference from overseas examples that protect small business owners' right to survive"

In Germany’s Bavaria province, for instance, the “Ladenschlussgesetz” (Shop Closing Law) traditionally prohibits store operations on Sundays and holidays, and also imposes operating hour restrictions on weekdays. This ensures not only rest rights for workers but also prevents large capital from monopolizing the market 24 hours a day, thereby protecting local commerce from being wiped out.

If a forest only contains pine trees, a single fire or pest outbreak could wipe out the entire ecosystem. It’s the presence of a diversity of grasses and wildflowers that sustains a healthy forest. The same applies to the retail market. When giant retail chains prioritize convenience and completely take over local commercial districts, it may initially appear to benefit consumers. However, once neighborhood mom-and-pop stores, vegetable shops, and side-dish stores have disappeared, the large companies can quietly raise prices or reduce services, leaving consumers with no recourse. In the end, a market with no diversity will inevitably boomerang back on consumers in the form of higher prices and reduced choices.

The crisis facing hypermarkets is not due to regulations protecting local commerce, but rather stems from delays in adapting to the rapidly changing e-commerce environment and failed business strategies. It is unacceptable to shift responsibility for fundamental business difficulties onto regulations designed to protect small businesses, or to undermine the lifelines of society’s most vulnerable. Hypermarket operating restrictions are not “outdated regulations” but “the minimum brake” needed to maintain a healthy retail ecosystem in our society. Now is the time for large retailers to focus on constructing innovative, mutually beneficial business models that can develop together with existing neighborhood commerce, thereby promoting true coexistence and fair competition.

Kihong Bang, President of the Korea Federation of Small and Medium Business Owners and Self-Employed

*Columns contributed by outside writers may not reflect the editorial direction of The Asia Business Daily.

This content was produced with the assistance of AI translation services.