SEOUL, December 08 (AJP) - South Korea’s largest hypermarket chains are steadily losing ground as long-standing regulatory constraints undermine their competitiveness while e-commerce and less-regulated rivals expand, industry data show.
The total number of outlets operated by major chains — including E-Mart, Lotte Mart and Homeplus — fell 7.5 percent to 392 this year from 424 in 2017. E-Mart reduced its store count from 159 to 157, Lotte Mart from 123 to 112, and Homeplus from 142 to 123.
The contraction has been accompanied by declining revenues.
Combined annual sales at the three chains fell below 30 trillion won last year, down about 3.3 trillion won from a decade earlier, according to industry estimates.
Industry officials attribute much of the pressure to the industry regulatory framework, introduced in 2012 to protect traditional markets and small merchants.
The law mandates two monthly shutdown days, bans operations between midnight and 10 a.m., and restricts new store openings within a one-kilometer radius of traditional markets. It also prohibits online deliveries by large retailers during restricted hours, effectively excluding them from the rapidly expanding early-morning delivery market.
By contrast, e-commerce platforms such as Coupang have expanded rapidly, while brick-and-mortar formats exempt from the rules have gained market share.
Last month, the National Assembly extended the law’s sunset clause to Nov. 23, 2029, effectively locking in the current regulatory framework.
Policy experts and industry groups say the rules no longer serve their original purpose. A report by the Korea Institute for Industrial Economics and Trade found little evidence that mandatory holiday closures revive traditional markets and said the law is rooted in an outdated, offline-centric view of retail that fails to match current consumer behavior.
“Applying rigid, decades-old rules only to hypermarkets is increasingly disconnected from market realities where online and offline channels have converged,” an industry official said. “The framework for coexistence with traditional markets needs to be redesigned to restore competitiveness.”
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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