by Jeong Ilwoong
Published 19 Apr.2022 07:45(KST)
[Asia Economy (Daejeon) Reporter Jeong Il-woong] Daejeon City plans to maintain the Ontong Daejeon cashback policy to enhance the sustainability of local currency. In particular, with additional cashback payments next month and the Ontong Sale, the city intends to support citizens' daily recovery in line with the lifting of social distancing measures.
The city announced on the 19th that since the sales increase effect on local small businesses through cashback was proven in the performance analysis after the launch of Ontong Daejeon, it plans to maintain a certain level of cashback benefits going forward.
Ontong Daejeon is a local currency of Daejeon launched on May 14, 2020, which has grown into a representative local brand by playing a supporting role in the local economy amid the spread of COVID-19.
Currently, there are about 990,000 Ontong Daejeon users, accounting for 7 out of 10 citizens. The number of issued cards has exceeded 1.2 million, and as of this month, the cumulative issuance amount reaches 3.3 trillion won. The annual issuance amount ranks first in population ratio among metropolitan cities nationwide.
Above all, Ontong Daejeon is estimated to have brought effects such as an increase of 940 billion won in net local consumption, a sales transfer effect of 1.02 trillion won for small businesses, and a 540 billion won conversion of consumption within the region.
Based on this, the city analyzes that Ontong Daejeon stimulates consumption, increases sales of local small businesses, and prevents the outflow of local capital outside the region.
Ontong Daejeon also achieved the dual honors of the Ministry of Trade, Industry and Energy’s ‘Korea Brand Awards’ and the Ministry of the Interior and Safety’s ‘Best Local Currency Evaluation Award’ at the end of last year.
Additionally, it ranked first in the major achievements of the 7th local government administration and was selected as number one in Daejeon city’s top 10 news for two consecutive years, showing high preference among citizens.
However, despite the clear achievements and citizen response to Ontong Daejeon, the city foresees that government support for local currency issuance may be reduced or suspended due to the new government’s national policy direction.
Furthermore, if support is reduced or suspended, there is a possibility that the cashback rate may be lowered in consideration of local fiscal conditions.
Nonetheless, the city plans to fundamentally maintain cashback benefits to continue the visible effects such as increased sales for local small businesses confirmed through the launch of Ontong Daejeon. This means enhancing the sustainability of Ontong Daejeon regardless of external factors such as government support.
In line with this, to celebrate the 2nd anniversary of Ontong Daejeon next month, the city will increase the Ontong Daejeon cashback from the current 10% to 15%, and conduct the Ontong Sale with discount and prize events at traditional markets, shopping districts, and the online Ontong Daejeon mall.
In particular, the city plans to strengthen the role and function of Ontong Daejeon by focusing on activating Ontong Daejeon Plus discount stores and expanding policy issuance projects for Ontong Daejeon.
Plus discount stores refer to merchants that offer an additional 1% to 5% discount on top of the cashback to Ontong Daejeon users. Currently, about 1,400 such stores are operating, and the city aims to increase the number of affiliated stores to around 10,000 within this year.
The city will also improve user convenience for Ontong Daejeon. A representative example is addressing the limitation that Ontong Daejeon payments are mainly made at offline stores by enabling free payment at online malls operated by local businesses.
Mayor Heo Tae-jeong of Daejeon said, “Ontong Daejeon is recognized as the most successful local currency model nationwide and is becoming closely integrated into the daily lives of local citizens. The city will strive to enhance the sustainability of Ontong Daejeon so that it can continue to grow together with the citizens.”
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