Neighborhood Supermarkets Also Accept Online Orders, Enabling '5-Minute Delivery'

Government Announces 'Digital Distribution Competitiveness Enhancement Plan'
'Distribution Data Dam' Containing 3 Million Standard Product Data, 'Fulfillment' System for Small and Medium Distributors Established

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government will establish an 'Integrated Logistics Center (Fulfillment Center) linked to small and medium-sized stores' that provides integrated support from product storage to delivery, enabling small and medium-sized distributors such as neighborhood supermarkets and traditional markets to offer fast delivery services based on online platforms like Amazon and Coupang. To this end, a 'Distribution Data Dam' containing standard data for more than 3 million product information items will be created. The government plans to invest more than 300 billion KRW over three years to create over 20,000 new jobs in data, delivery logistics, and other areas.

On the 4th, the government announced the 'Digital Distribution Competitiveness Enhancement Plan' at the National Policy Issue Inspection and Coordination Meeting chaired by Prime Minister Chung Sye-kyun. This aims to strengthen the competitiveness of small and medium-sized distributors such as supermarkets and markets, which have been excluded from online transactions, by promoting their digital transformation as the domestic online distribution market grew more than sixfold from 21.7 trillion KRW in 2010 to 131.3 trillion KRW in 2020 over ten years.

First, fulfillment services that allow supermarkets and markets to receive online orders and quickly deliver products to local consumers will be expanded. Fulfillment is an integrated logistics service that handles product receipt, online orders, product selection and packaging, product shipment, and delivery all at once. For this, real-time product demand forecasting based on big data such as product and transaction information must be possible. The government will support building a system that enables multi-item small-quantity transactions and fast delivery through big data integration of product, transaction, and weather information and regional demand forecasting via fulfillment centers jointly used by small and medium-sized distributors. Among the 39 nationwide small and medium-sized distribution joint wholesale logistics centers, two will be selected to conduct a pilot project for fulfillment centers.

An official from the Ministry of Trade, Industry and Energy said, "Currently, small and medium-sized distribution joint logistics centers serve as simple warehouses, but in the future, a system connecting manufacturers, joint logistics centers, distributors, and consumers will be established to enable offline small and medium-sized distributors to enter online markets." He explained, "The goal is to build a mid- to long-term system that leverages the regional advantages of neighborhood supermarkets and markets to enable 5-minute and 10-minute deliveries faster than daily or dawn deliveries."

To this end, the government will expand the standard product information data that anyone such as manufacturers, distributors, and logistics companies can use from the current 1 million items to more than 3 million by next year. The standard data will include 50 common pieces of information such as distribution standard codes (barcodes), product names, origins, manufacturers, brand companies, product images, capacity, and packaging. Additionally, a product information registration center (tentative name) will be opened within the year to promote system linkage with online distributors. Utilizing this information will facilitate inventory management and enable the development of various services such as providing allergy-causing ingredient information, food nutrition information, and personalized supplement recommendations.

The government also plans to create a distribution data utilization platform that collects transaction information, weather information, and other data using this product information, allowing small and medium-sized distributors to utilize it.

Furthermore, by 2022, the government will promote early commercialization of contactless advanced delivery, including 1,000 drone delivery demonstrations and the distribution of 4,000 logistics robots. It will also support overseas joint logistics centers and smart joint logistics centers expansion, and the 'One Trade Center, One Overseas Distribution Network System' to assist domestic distribution platforms and small and medium-sized enterprises in entering overseas markets together. More than 1,200 digital distribution specialists will be trained.

This content was produced with the assistance of AI translation services.