Innovation of Distribution Industry
The Ministry of Trade, Industry & Energy of South Korea held a meeting with local distributors on February 1 and discussed how to innovate the distribution industry in step with the fourth industrial revolution.
The participants of the meeting agreed on the establishment in the first half of this year of an alliance of manufacturers and high-tech firms in the distribution, logistics and ICT sectors so that they can work better with each other for international standardization, joint R&D, business model development and personnel cooperation. The South Korean government is going to raise a fund of 300 billion won to that end in the second half of this year.
Virtual reality (VR) stores are to be opened as well. Specifically, some distributors and street malls are to be provided in the form of VR stores at the Korea Sale Festa scheduled for October this year so consumers can buy what they need there. Data is planned to be collected during the period for research on various shopping patterns. In addition, a total of 15 billion won is invested from 2018 to 2022 in technology demonstration and commercial technology development projects regarding the fourth industrial revolution, such as the establishment of big data networks that can be shared by manufacturers and distributors.
The participants are also going to boost e-commerce by dealing with obstacles related to each stage ranging from payment to delivery by means of solutions in compliance with WTO rules. 20 billion won is to be invested in exporters utilizing e-commerce and five billion won is to be earmarked in the interest of small and medium-sized enterprises’ business on global online platforms like Amazon. The purpose of these plans is to increase South Korea’s annual exports based on e-commerce from two trillion won to at least three trillion won between last year and this year.
The government is going to ask for more tariff concessions in retail and wholesale services and the like next month during its negotiations with India for the Korea-India Comprehensive Economic Partnership Agreement (CEPA) so that more South Korea distributors can do business in India. Next month, the South Korean government designates certain distributors doing business abroad as professional trading companies, which will be provided with loans that have a maturity of up to 30 years and are equivalent to 80% to 100% of their overseas investment and working capital.