Benefit Analysis of Online Korea Agri-Food Exchange

Abstract

This study analyzed the benefits of the B2B online agricultural exchange, which is promoted by the government for digital transformation in the distribution sector as the Fourth Industrial Revolution technology is introduced and the agricultural distribution environment is changing rapidly owing to COVID-19. Currently, the Korean government is conducting the national B2B online agricultural exchange, where sellers, including producer organizations and agricultural corporations, can make direct transactions and buyers, including public market wholesale corporations, intermediaries, and trade participants, can purchase agricultural products through the online platform, regardless of time and location. Against this backdrop, we analyzed the potential benefits of the online agricultural exchange, divided into those from the reduction in distribution stages and from the increase in user convenience. For the analysis, benefits from the reduction in distribution stages are divided into logistics cost saving, shrinkage loss reduction, and commission reduction. Benefits from the increase in user convenience are divided into shipper’s saving of search cost and buyer’s saving of transaction cost. Assuming that the online agricultural exchange is worth KRW 500 billion, the expected economic benefit was analyzed to be about KRW 38.3 billion per year.