Korea Fair Trade Commission Probes Olive Young, Daiso Over Supplier Dealings

 
South Korea’s Fair Trade Commission has sent investigators to the headquarters of CJ Olive Young and Asung Daiso, which operates Daiso, to secure transaction records with suppliers. The on-site inspection is aimed at determining whether the companies violated the law governing large retailers. While the probe appears to be separate checks on two firms, it also reflects a broader effort to set clearer rules for fast-growing retail powerhouses. Familiar consumer brands should not be exempt from scrutiny.
 
Olive Young and Daiso have moved beyond being simple storefronts. Olive Young has become a leading distribution channel for the K-beauty industry, and Daiso has emerged as a key sales network in the household goods market. For small manufacturers and suppliers, whether their products are carried can directly affect sales and growth. In an environment where placement on a retailer’s shelves can influence production, hiring and follow-on investment, fair dealing becomes more important as retailers’ influence expands.
 
According to an FTC fact-finding survey, Olive Young’s effective commission rate was 23.52% for its online business and 27.0% for its offline specialty stores. At Daiso, the average payment period for direct-purchase transactions was 59.1 days, close to the legal limit of 60 days. These figures alone do not establish illegality, given factors such as industry practices, contract structures and inventory turnover. But if suppliers have little practical ability to refuse terms, the impact changes: higher commissions can squeeze small firms’ margins, and slower settlements can strain companies with weak cash flow.
 
For companies with significant market power, meeting only the minimum legal standard does not end their responsibility. Fair trade depends not just on formal legality but on whether bargaining power is balanced in practice. A signed contract does not necessarily mean negotiations were equal. If one side accepts terms without real alternatives, the market is already tilted.
 
If such conditions persist, the broader industry can lose momentum. Small manufacturers may devote more resources to meeting listing costs and conditions than to product innovation. When money that should go to research, development and quality improvements is diverted to commissions and promotional burdens, competitiveness can erode. Consumers may benefit from low prices in the short term, but over time could face less product variety and higher prices.
 
The FTC’s investigation should be calm and precise. It should avoid both showy punishment because the companies are well-known and leniency because they are popular brands. Authorities should closely examine the facts — including contract terms, return responsibilities, how promotional costs are shared, settlement timing and other demands on suppliers — and decide based on law and principle. What the market needs is not emotional retribution but predictable rules.
 
Companies, too, need to adjust their approach. As they grow, their responsibilities grow with them. Without building supply chains that grow alongside suppliers, today’s success may not last. Consumers’ choices are not determined by price alone; trust that a company trades fairly can strengthen brand value.
Olive Young and Daiso are widely seen as success stories that reshaped Korea’s retail market. The remaining question is not how much bigger they become, but how fairly they grow. A retail leader’s real strength lies not only in sales, but in building trading practices that all market participants can accept.