Ministry of SMEs and Startups, Pilot Construction of Local Circulation Economy Platform 'Neighborhood-Level Online and Offline Distribution Network'

Experiment on Distribution Structure Connecting Local Producers and Consumers Through Neighborhood Stores Without Wholesale Stage

Minister Kwon Chil-seung of the Ministry of SMEs and Startups is demonstrating the purchase of products using the local currency "Siru" as a resident of Siheung City at "Wolgotsiktak" located in Wolgot Port, Siheung, Gyeonggi Province on the 22nd.
[Photo by Ministry of SMEs and Startups]

[Asia Economy Reporter Kim Jonghwa] The Ministry of SMEs and Startups and Siheung City held an event on the 22nd to establish a "Neighborhood-Level Local Distribution Network" under the slogan "Small Business Products in Our Neighborhood" at 'Wolgotsiktak' and 'Wolgotdongchaek Hansongi,' located in Wolgot Port, which was selected as the pilot site for neighborhood-level local distribution channels.

The neighborhood-level local distribution network is a hyperlocal (community-based) distribution and logistics system that integrates the sourcing, distribution, and sales structure of local products by connecting 'local producers - neighborhood stores (distribution startups) - consumers.'

The goal is to build an online and offline distribution network within a neighborhood-level radius (within 20 km) involving 'producers - neighborhood stores - consumers,' targeting small business owners with promising local products or neighborhood stores that can grow into key distribution channels. Through this, producers can secure sales channels via neighborhood stores and focus on production, neighborhood stores can attract customers without inventory burdens, and consumers can purchase fresh and distinctive products at affordable prices.

At 'Wolgotsiktak,' an experiential market combining food and beverage stores and shared kitchens, a neighborhood-level local distribution network experience event connecting local small business products with consumers both online and offline was held. Minister Kwon Chil-seung of the Ministry of SMEs and Startups demonstrated the process of purchasing grapes registered by a producer on an online platform using the local currency Siru as a Siheung resident and picking them up at the neighborhood store Wolgotsiktak.

At 'Wolgotdongchaek Hansongi,' a talk concert was held with participation from Yonsei University Professor Mo Jong-rin, small business owners, regional regeneration accelerators, and startups, discussing the development direction of distribution logistics centered on small business owners and ways to revitalize neighborhood commercial districts after COVID-19. Wolgotdongchaek Hansongi is a cafe reborn from a closed shellfish grill restaurant into a complex space combining a bookstore and a flower shop through collaboration between local small business owners and accelerators.

A local resident attending the meeting expressed expectations, saying, "It has become easier to purchase good products from local small business owners," and a representative from Hoonhoon Fisheries, a local producer, said, "We had difficulties securing sales channels due to COVID-19 and large distribution companies, so we are grateful that the Ministry of SMEs and Startups planned such an innovative project."

Minister Kwon said, "A distribution network optimized for small business owners, differentiated from large corporate distribution networks, is necessary," adding, "If the logistics network of the already established Small and Medium Distribution Joint Wholesale Logistics Center is connected with the neighborhood-level distribution network, it will provide new opportunities for small business owners." The Ministry of SMEs and Startups plans to analyze the results of this pilot project and expand the project starting next year.

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