Social Criticism
A parliamentary inspection of the Ministry of Trade, Industry & Energy took place on Sept. 14. There, ruling Saenuri Party lawmaker Kim Dong-wan pointed out that the three biggest social commerce firms in Korea were engaged in cut-throat competition, significantly affecting their financial conditions and forcing those doing business with them to cut prices down to an unacceptable level. This is in light of the importance of social commerce being on the rise in the domestic market, with the amount of transactions reaching no less than 4.7 trillion won (US$4.0 billion) in total last year.
“It has been found that Coupang provides free delivery. But the burden is taken by no one but sellers, and the company has forced its partners not to do business with any other social commerce firm,” he said, adding, “Besides, the high-handedness of Coupang merchandisers has hindered margin estimation.”
With regard to Ticket Monster, he criticized a settlement and refund system that is prone to errors and allows a refund only when a seller proves an error. According to the lawmaker, Ticket Monster has imposed excessive penalties on sellers as well, even when delivery is delayed for reasons having nothing to do with the sellers. “WeMakePrice, in the meantime, was far from punctual in making payments to sellers, and has demanded additional payments when launching marketing events,” he explained.
The lawmaker said, “Monitoring measures should be implemented right away so that consumers and businesses can be protected from further damage.”