Reducing Distribution Costs through Digital Transformation of Agricultural Product Distribution
Online Wholesale Market to Open Within the Year
The number of agricultural products available for online auction will significantly increase in the future. Activating online auctions is expected to reduce distribution costs incurred in wholesale market transactions and enable stable market expansion for farmers.
Korea Agro-Fisheries & Food Trade Corporation (aT) announced the "Agricultural Product Distribution Digital Transformation Promotion Plan" containing these details on the 28th.
Due to the impact of COVID-19, the online agricultural product trading market is rapidly growing. According to Statistics Korea, the online shopping transaction amount for agricultural and livestock products in 2021 was 7.1 trillion KRW, a 22% increase from 5.8 trillion KRW the previous year, and a 92% growth compared to 3.7 trillion KRW in 2019, just before the pandemic.
In line with this paradigm shift in distribution, last year aT focused its efforts on supporting the Ministry of Agriculture, Food and Rural Affairs' policies for "digital transformation of agricultural product distribution from production areas to consumption areas," including the standard model for online wholesale markets and smart Agricultural Product Distribution Centers (APCs), and digitalization of wholesale distribution information.
Additionally, to promote digital transformation among distribution entities, aT actively supported online auctions by production area organizations and wholesale corporations, achieving a transaction amount of 65 billion KRW in 2022, approximately a 95% increase from the previous year. In the food ingredient procurement sector, expanding the Public Meal Integrated Platform's user base to schools, military units, and social welfare facilities opened the era of a 34 trillion KRW transaction scale.
To accelerate the digital transformation of agricultural product distribution, aT plans to first establish a smart APC information support system to lay the foundation for digitalizing internal APC operations and agricultural product transactions. The number of online auction items from production areas will be increased from 32 to 45 to improve distribution structure efficiency and expand farmers' income.
Furthermore, to open the online agricultural product wholesale market within the year, aT will form an internal task force (TF team) to promote integrated platform construction, attract users, and review operational regulations. Efforts will also be intensified to build a wholesale market electronic delivery note linkage system to expand the nationwide adoption of electronic delivery notes, which are scheduled for pilot introduction at Garak Market this year.
The digital transformation of public meal services will be promoted centered on the Public Meal Integrated Platform, a procurement platform for public meal ingredients such as schools. The newly opened integrated platform in September last year will be actively promoted, and customized functions for each user institution will be introduced to continuously expand new users, aiming to realize digitalization of ingredient distribution across all public meal sectors in the long term.
Strengthening the digital capabilities of distribution entities will also be fully initiated. aT will operate regional smart studios to support the production of various promotional content and secure marketing channels, and the Agro-Fisheries & Food Distribution Education Institute will run diverse educational programs to enhance the digital capabilities of agricultural and food distribution workers.
Kim Chun-jin, President of aT, stated, "The digital transformation of agricultural product distribution is effective in streamlining the complex multi-tiered distribution structure, strengthening the competitiveness of production area organizations, and increasing farmers' income. We will concentrate all of the corporation's capabilities on the digital transformation of agricultural product distribution to ensure that government policies proceed without any setbacks."
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