South Korea advances bill to shorten retail payment deadlines

A legislative subcommittee of the South Korean National Assembly has approved an amendment to the Act on Fair Transactions in Large-Scale Retail Business. The amendment aims to shorten the legal deadline for large retailers to pay suppliers for goods.

Under the proposed changes, the payment period for direct purchases will be reduced from a maximum of 60 days to 35 days. For special purchase and consignment transactions, the deadline will be cut from 40 days to 20 days. The move follows recent financial instability in the sector, such as the unpaid settlement crisis involving Tmon and WeMakePrice, and is intended to improve cash flow for small and medium-sized suppliers.

The amendment has met with mixed reactions. While the Korea Federation of Micro Enterprise welcomed the move, calling for even shorter 15-day deadlines, several other groups—including the Korea Startup Forum and the Korea Online Shopping Association—have expressed opposition. These groups argue that the regulation could increase the working capital burden on distributors, potentially leading to reduced order volumes for new brands and startups. Some critics also noted that the law might not effectively reach large Chinese-based platforms like AliExpress or Temu.