FTC criticized for failing to detect Market Kurly's unfair trade practices
Market Kurly Founder Sophie Kim, left, holds up a business agreement with CJ Logistics CEO Kang Sin-ho, on cooperation in the online grocer's delivery service, at CJ Logistics headquarters in Seoul, on April 27. Courtesy of CJ Logistics
By Kim Jae-heun
The Fair Trade Commission (FTC) is facing criticism for remaining silent amid allegations that fresh food delivery platform Market Kurly forced suppliers to offer discounts on their products.
The antitrust watchdog investigated Market Kurly's alleged abuses of power last December. However, the FTC was unable to prove the allegations leveled against the e-commerce firm and also remained silent about the issue.
The FTC said the investigation is still in progress, while the results have not come out yet.
“We've been receiving other accusations and proving a case takes time,” an FTC official said.
Industry insiders, however, accused the antitrust watchdog of favoritism.
“The FTC has been a fair trade commission for big companies and unfair trade commission for small- and medium-sized businesses,” an industry source said.
Whistleblowers claim the antitrust watchdog is pulling its punches against Market Kurly.
“Even yesterday, I received a call from Market Kurly's merchandiser asking if we could provide our products at a 35 percent discount on May 1. The staffer asked me to give him an answer in 30 minutes,” a CEO of one supplier said during an interview with local media, Monday. “Market Kurly's bullying is well-known among its suppliers.”
Meanwhile, when FTC Chairperson Joh Sung-wook visited one of Market Kurly's logistics centers in Seoul last year, she said the online grocer is making efforts to seek mutual growth with suppliers by viewing them as business partners and not targets of profit.
Market Kurly, which was founded in 2014 by Sophie Kim, reached annual sales of nearly 1 trillion won last year.
The fresh food delivery platform hired top actors Jun Ji-hyun and Park Seo-joon as advertising spokesmodels to promote its “buy everything for 100 won at first purchase” event. This caused Market Kurly to suffer a loss of 116.2 billion won in 2020, increasing by 15 billion won compared to the previous year.
In addition, rivals like SSG.com and Hello Nature joined the overnight fresh food delivery race this month and competition is likely to heat up.
Customers are worried that such conditions will encourage Market Kurly to lean even harder on its suppliers to slash prices.
“Market Kurly has such a good reputation and I've always wondered how it can come up with products at such cheap prices. Now, I am disappointed that this may be a result of sacrificing small- and medium-sized companies,” a 33-year-old customer surnamed Park said. “Maybe I need to think about using another online grocer.”