Lawmaker Calls for More Steps for Small Retailers
By Kang Hyun-kyung
Staff Reporter
A lawmaker has submitted a revision bill to the National Assembly calling for the protection of small shop owners and the self-employed from business losses caused by the presence of large retailers in their business areas, Sunday.
Rep. Lee Jung-hee of the minor opposition Democratic Labor Party (DLP) proposed that the Small and Medium Business Administration (SMBA) be able to order large retailers to suspend their business if they attempt to franchise their stores in areas currently dominated by small businesses.
The measures came after certain large retailers, which were ordered to suspended business after setting up in areas where there were conflicts of interest, announced that they would franchise their stores to circumvent the current law.
Under the law, the SMBA is authorized to order large businesses to suspend business temporarily if they set up in areas dominated by small businesses.
The respite is to allow negotiations between large and small stores to take place.
Franchising a business is not subject to the regulation.
Lee also called for regulating business hours and products that large retailers can stock in their stores in order to better protect small retailers.
This has added more fuel to the ongoing battle between large and small retailers, with the former invading the market previously dominated by the latter since the 1990s.
Since E-Mart, Korea's version of Wal-Mart, first opened its store in Chang-dong, Seoul, in 1993, large retailers have seen rapid growth in revenue.
The success of E-Mart has prompted an increasing number of large Korean and foreign retailers to open chain stores in Korea. By mid-2009, a total of 395 large retailers had opened for business. E-Mart has 119 stores, followed by Homeplus with 112 and Lotte Mart with 64.
Chances for the revision to be passed in the National Assembly remains uncertain as the ruling and opposition parties differ over the regulation.