"A Foundation for Non-Face-to-Face Support System for Small and Medium Distribution Companies Must Be Established"

Amid the rapid increase in contactless consumption due to the spread of the novel coronavirus infection (COVID-19), a pile of parcels is stacked at a courier logistics center in Seoul on the morning of the 17th. Photo by Yonhap News

[Asia Economy Reporter Moon Hyewon] Kim Gi-moon, president of the Korea Federation of SMEs, said on the 27th, “The distribution industry is an industry where the most advanced and the most backward sectors coexist,” adding, “Legal and institutional foundations must be promptly established so that small and medium distribution businesses can adapt to and grow in the platform era according to the changing environment and create new jobs.”

On the afternoon of the same day, President Kim hosted a “Policy Forum for Innovation and Promotion of Small and Medium Distribution Enterprises” together with Jeong Tae-ho, a member of the Democratic Party of Korea, at the National Assembly Members’ Office Building, and made these remarks in his congratulatory speech.

The forum was organized to discuss policy directions to enhance the competitiveness of small and medium distribution enterprises and support innovation. In particular, the discussion mainly focused on policies related to the shift of the distribution market’s center from offline to online due to the spread of non-face-to-face transactions caused by the novel coronavirus disease (COVID-19).

Han Jeong-mi, head of the Innovation Legislation Division at the Korea Legislation Research Institute, addressed institutional improvement measures to support the adaptation and growth of small and medium distribution enterprises in the transition to the non-face-to-face era in her keynote presentation.

Han said, “E-commerce has already become routine for both companies and consumers, but small and medium distribution enterprises, lacking capacity and capital, find it difficult to respond to environmental changes on their own. Although irregular distribution businesses have continuously emerged to avoid regulatory blind spots and new business types have appeared, the current Distribution Industry Development Act lacks clear grounds to distinguish large distribution companies, resulting in a mismatch between law enforcement and reality.”

She then proposed creating separate legislation to actively support small and medium distribution enterprises and empower them to compete with large distribution companies. Specifically, she suggested reviewing areas such as support for online transactions and digitalization, establishment of smart logistics systems, support for overseas market entry, and support for O2O and O4O connected to offline stores.

Meanwhile, Representative Jeong, who hosted the forum, said, “The changes caused by COVID-19 are transforming not only individuals’ lives but also the culture and economic paradigms of our society,” adding, “Since effective policy support is needed to ensure the sustainable growth of small and medium distribution businesses, I will do my best to listen to experts and voices from the field to prepare institutional improvement measures.”