An Analysis of E-Commerce by Local Governments in Korea

Local governments in Korea are involved in three types of online shopping sites : 'direct operation', 'outsourced operation', and 'sales agency.' They are different in terms of the site operator and the charging mechanism among a local government, the site operator, and local producers. This study analyzes their differences in site traffic, local producers' participation, promotion, and partnership. The results from the investigation of 72 shopping sites are the following. First, shopping sites of the 'direct operation' type and the 'outsourced operation' type show significantly higher participation of local producers. Second, the 'marketing agency' type has significantly higher number of promotional activities than the 'oursourced type' which has significantly higher number than the 'direct operation' type. Third, the number of partnerships in the 'marketing agency' type is the highest. The 'direct operation' type is the second and significantly higher than the 'outsourced type.' On the basis of the analysis results, this paper suggests an incubation ecosystem model as a better way of involvement by local governments in online shopping sites.