"If the top 100 global start-ups make a foray into Korea, 70% of them will not be able to do business as they will violate regulations."
Kim Bong-jin, CEO of Woowa Brothers and Sisters, a representative start-up in Korea that runs “The Nation of Delivery Food,” criticized regulations preventing Korean start-ups from growing. Kim also expressed concern that the Korean digital economy could become a colony of overseas services due to reverse discriminatory regulations.
"In July, we analyzed business models of the top 100 global start-up companies," said CEO Kim in a keynote speech in the Korea Start-Up Forum in honor of the forum’s first anniversary on September 26. “If they do business in Korea, 40 percent will be illegal and 30 percent partially illegal."
"Uber and Didi Chuxing will not be allowed in violation of the Transportation Business Act and the Korean Lodging Act will disable Air B&B from doing business in Korea,” CEO Kim said. “Under these circumstances, such foreign start-up cannot do business in Korea and Korean start-ups are pursuing innovation.”
Actually, Korean regulations considered Uber illegal in March 2015. On the other hand, Didi Chuxing, a Chinese version of Uber is growing rapidly, causing a sensation in the Chinese call tax industry. Didi Chuxing is expanding to the Southeast Asia market among others.
CEO Kim reproved Korean regulations through a case he himself experienced. "I recently booked accommodation at Air B&B, but I heard that Yanolja Application could not offer a reservation service for the facility," CEO Kim said. “I asked Lee Su-jin, CEO of Yanolja why. CEO Lee said that Korean regulations did not allow Yanolja to offer such a service." It is a good example that shows that foreign companies such as Air B&B are encroaching on the Korean market while regulations are hindering Korean companies.
"Now we are not competing on a level playing ground," CEO Kim said. "Overseas companies are bent on innovating products, but many Korean companies are busy dealing with legal regulations."
CEO Kim did not forget to mention the problem of reverse discrimination against Korean companies compared with foreign companies. "It is not Naver but YouTube or Facebook that our company pays much money to for the advertisement of The Nation of Delivery Food," CEO Kim said. "But Korean taxmen do not know how much they make in Korea. They are not paying taxes in Korea, either."