Online retailers gripe about fees

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Online retailers gripe about fees

Small businesses using online commercial platforms and delivery apps to sell their goods want the government to step in to lower what they perceive as high fees, a comprehensive survey found.

Last Thursday, the Korea Federation of SMEs published results of a survey it conducted of 917 small retailers that utilize online commercial platforms such as e-commerce sites and food delivery apps.

The survey found that while the number of respondents who said they were being unfairly treated by the platform operators nearly halved compared with surveys from 2014 and 2016, the majority said they wanted the government to intervene and lower commission rates charged by operators.

The biggest complaint retailers had against open market platforms was high costs. More than 35.7 percent of the 308 open market users who responded said that the platforms charged excessive commission and service rates.

Only 8.5 percent of the 306 retailers using social commerce platforms named high service charges as the biggest problem. Their most popular complaint, chosen by 12.4 percent of respondents, was with the way that operators calculated and transferred earnings from sales made on the platforms.

The survey categorized Gmarket, 11street, Coupang and Interpark as open markets that provide platforms to connect sellers with buyers. It categorized TMON and WeMakePrice as social commerce platforms that are more selective about the sellers they host but charge them lower commission rates.

Retailers using open market and social commerce platforms pay a variety of service fees, including advertising fees, payment processing fees, delivery fees and sometimes cost per click fees, which occurs when a visitor clicks an advertisement on the platforms. Restaurants that use food delivery apps expressed similar concerns.

Out of the 303 food businesses surveyed, 37 percent said they found advertising fees too expensive.

Restaurant businesses are also very dependent on shopping platforms. Around 3.66 million consumers use the Baedal Minjok app every month to order food, according to research firm Nielsen Korea.

“Small businesses that sell products through online platforms want the government to step in and resolve common issues like high advertising fees and service charges,” said Kim Kyung-man, head of the federation’s trade and industry division.

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