The government is pushing to allow early morning deliveries for large supermarkets. This initiative aims to address the competitive disadvantage against e-commerce and enhance the competitiveness of the retail industry. As consumer lifestyles have shifted to a 24-hour online focus, it is deemed inequitable to keep offline retailers bound by outdated regulations. Although this change comes late, it is a step in the right direction. Beyond permitting early morning deliveries, it is time to gradually revise the mandatory closure regulations for large supermarkets to align with current market conditions.
The mandatory closure system for large supermarkets was introduced in 2012 to protect traditional markets and local businesses. At that time, large supermarkets dominated the offline retail market, and there was a social consensus on the need for regulations to protect local economies. However, over a decade later, the market environment has changed dramatically. Consumers can order products anytime via smartphones, and online platforms now offer late-night and early morning deliveries. The focus of the retail market has long since shifted online.
Yet, large supermarkets are still required to close their doors monthly and face restrictions on operating hours, which is anachronistic. The same regulations do not apply to online platforms. This creates a structure where regulations are concentrated solely on offline retailers, which contradicts the principles of fair competition and limits consumer choice.
The situation with Homeplus highlights the limitations of these regulations. While the company's financial difficulties cannot be attributed solely to the mandatory closure rules, factors such as excessive acquisition financing, lack of investment, and failure to adapt to rapidly changing market conditions are fundamental causes. However, it is undeniable that the mandatory closure and operating hour restrictions have hindered its competitiveness. Offline retailers are essentially entering the competition with one hand tied behind their backs.
Moreover, the crisis at Homeplus is not an isolated issue. If large supermarkets fail, numerous partner companies, suppliers, and small businesses will face cascading difficulties. Local employment will also be significantly affected. The retail industry operates as an ecosystem, and the weakening of a specific company's competitiveness reverberates through to partners and consumers.
Allowing early morning deliveries could be the first step in correcting this imbalance. However, this alone is not sufficient. The mandatory closure regulations must also be gradually improved, taking into account consumer benefits and market realities. Local governments should be allowed to adjust closure days based on regional conditions, and converting mandatory closures on public holidays to weekdays or expanding options based on locality should be considered. The key is not uniform regulations but a flexible system that aligns with the changed market.
Of course, the goal of protecting traditional markets and local businesses remains important. However, the approach to protection should not be limited to regulation. The focus should shift to policies that enhance competitiveness, such as supporting digital transformation, modernizing facilities, establishing shared logistics, and expanding online sales channels. Policies that empower the market to compete are more sustainable than those that artificially restrict it.
Regulation is a means, not an end. As times change, regulations must also evolve. In an era where the boundaries between online and offline have blurred, clinging to outdated standards will not yield benefits for business competitiveness, consumer welfare, or the revitalization of local economies. The Homeplus situation serves as a warning of how far policy has lagged behind structural changes in the retail industry. If the government uses the opportunity of allowing early morning deliveries to redesign the mandatory closure regulations to fit current realities, it could enhance the competitiveness of the retail industry and benefit consumers, partners, and the local economy.
* This article has been translated by AI.
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