Why are small-business groups opposing a bill meant to protect them?

Some small-business associations have come out against a bill that would shorten the deadline for large retailers such as Coupang Inc to pay suppliers — cutting the window from 60 days to 35 days. The opposition has struck many observers as puzzling, given that faster payment has long been one of suppliers' most persistent demands. Inside and outside the National Assembly, speculation is growing that entrenched power dynamics between large retailers and their suppliers — what Koreans call a "gapul" relationship — may be driving the resistance, with reports that Coupang Inc and other retailers informally lobbied against the bill during the legislative process.

The National Assembly's Political Affairs Committee passed the amendment to the Large-Scale Retail Business Act on Thursday, voting to cut the payment deadline for direct-purchase transactions from 60 days to 35 days after the date goods are received. Deadlines for special consignment, commission-based and store-lease transactions would also be shortened, from 40 days to 20 days. The bill is designed to prevent payment failures like those seen in the Tmon and WeMakePrice settlement crisis and to improve cash flow for small and midsize suppliers. It now awaits passage by the Legislation and Judiciary Committee and the full Assembly floor.

In practice, some large retailers already pay close to the current 60-day legal limit. A survey on payment practices at large retailers published by the Korea Fair Trade Commission last December found that the average payment period for direct-purchase transactions was 27.8 days overall — but among nine companies with longer timelines, the average was 53.2 days. Yeongpung Bookstore topped the list at 65.1 days, followed by Daiso at 59.1 days, Kurly at 54.6 days, Coupang Inc at 52.3 days and Homeplus at 46.2 days.

Against that backdrop, the opposition from some small-business groups has raised eyebrows. The Korea Startup Forum, the Korea Platform Merchant Association and the Korea Small and Medium Business Association each issued statements against the bill on Wednesday. The Korea Online Shopping Association called for a review of the amendment the same day.

The Korea Small and Medium Business Association said in a statement Wednesday that Chinese platforms such as AliExpress and Temu were likely to sidestep the bill's requirements, and called on lawmakers to withdraw and reconsider the legislation. The Korea Online Shopping Association said tightening regulations while ignoring industry realities "would pour cold water on recovery efforts and could trigger further instability."

The Korea Platform Merchant Association said that for small businesses, securing stable order volumes mattered more than receiving payment a few days earlier. The Korea Startup Forum said the bill could strain retailers' working capital and purchasing capacity, warning that it would narrow market-entry opportunities for emerging brands and startup products.

Suppliers on the ground, however, told a different story. The head of a small supplier that does business with Coupang Inc said that if a product sells well, the retailer profits too, making it unlikely that a shorter payment deadline alone would prompt a cut in orders. Another supplier representative said companies "put everything on the line" to land contracts with major retailers, adding: "Frankly, we don't want to needlessly upset our business partners."

Given the bargaining power large retailers hold over their suppliers, some industry observers suggest that those trading relationships may have shaped the opposition groups' stance. One small-business industry official said the claim that shorter payment deadlines would immediately lead to reduced orders "seems like quite a leap," adding that the groups may have been motivated by a desire to avoid friction with large retailers.

The Korea Federation of SMEs and Micro Enterprises said the deadline should be cut further — to within 15 days. The federation issued a statement Thursday afternoon welcoming the committee's vote, calling the shorter deadline "an essential measure to improve fairness in transactions and enhance liquidity for small business owners." The statement appeared intended to correct any impression that all small-business groups opposed the change.

A staff member in the office of a ruling party lawmaker involved in drafting the bill said it was hard to understand why suppliers would express concern about large retailers' financial position. The aide added that Coupang Inc and other retailers had informally conveyed their reservations about the bill on multiple occasions during the legislative process, saying it was difficult to rule out the possibility that small suppliers had been influenced — or pressured — by their trading relationships with large retailers.

Ties between the opposing groups and major retailers were also identified. Coupang Inc and Kurly are among the key members of the Korea Online Shopping Association, which called for a review of the amendment. Kurly Chief Executive Officer Kim Seul-ah serves on the board of the Korea Startup Forum, which called for revisions to the bill.

The Korea Online Shopping Association pushed back on that characterization, saying in a phone interview that its position did not reflect the interests of any particular member company and that it was concerned about the broader impact on the retail industry. The Korea Startup Forum similarly said it had not been acting on behalf of any specific retailer, describing its stance as a measure to protect both small distributors and emerging suppliers.