This study was promoted to establish a reasonable remodeling plan so that the Eomgung Agricultural Product Wholesale Market can develop as a pivotal wholesale distribution organization in the east-southern region of Korea including Busan in the process of rapidly changing distribution environment and global urbanization.
The distribution environment for agricultural products is rapidly changing in terms of various aspects, e.g., production and supply factors, the local distribution environment for consumption, integration of the IT industry with distribution, consumers’ needs, etc. In particular, large distributors competing with wholesale markets are rapidly expanding market power through franchising and extension. As compared to this, the agricultural product wholesale markets don't properly cope with the rapidly changing distribution environment because of simple functions and backward facilities to gradually lose competitive power. However, it is predicted the wholesale markets will continue to function and play their role for a given period of time, considering the agricultural production structure of Korea and the characteristics of agricultural product distribution structure.
Therefore, this is the time when it is necessary to re-establish the functions and role of the conventional wholesale markets and to promote a facility modernization project appropriate for them in order to ensure competitive power equal to competitive distribution organizations and to efficiently cope with the rapidly changing distribution environment.
The Eomgung Agricultural Product Wholesale Market has played its role as a pivotal wholesale organization for agricultural products in the Busan region after its opening. However, the limited functions and backward and short facilities hamper proper adaptation to the rapidly changing distribution environment and the market is losing its power. Problems of transactions and market revitalization of the Eomgung Agricultural Product Wholesale Market faces include 1) inadequate and limited capability rapidly to cope with changes in the distribution condition, 2) lowered recognition as a wholesale market and continued decrease in the volume of transactions and the number of customers visiting the market, 3) problems of product collection and decentralization and 4) small scale and low productivity of the wholesale market operator. Problems of facilities include 1) absolute shortage of logistics facilities in the market, 2) shortage of low temperature storage facilities, 3) shortage of packaging and processing facilities, 4) inefficiency of intermediate wholesale shops and the auction market, 5) shortage of convenience facilities and visitor-friendly facilities.
The vision of the Eomgung Agricultural Product Wholesale Market modernization project is to cope with the age of globalization and openness to be an advanced general wholesale market globally competitive, and to be a collaborative wholesale distribution organization where producers, consumers and visitors like to visit, not a conventional inefficient market. The basic concept of the modernized Eomgung Agricultural Product Wholesale Market was set to a customer-centered wholesale market, a comprehensive wholesale market, a hygienic and safe wholesale market, and an environment-friendly and visitor-friendly wholesale market. The type of the Eomgung Agricultural Product Wholesale Market modernization project was established to be ‘remodeling of existing facilities and expansion of facilities’ by analyzing the type of various modernization project promotion and collecting opinions of distribution participants. Through this project, the modernized Eomgung Agricultural Product Wholesale Market will be able to play the role of 1) transactions, 2) complex logistics, 3) functions to respond to digital distribution, 4) import and export logistics and an information center, 5) public profits.
Various facilities should be expanded so that the Eomgung Agricultural Product Wholesale Market can carry out new functions, and the cost for the modernization project was divided into a draft and an amended plan to estimate project costs in each stage. The economy was analyzed for the modernization project to analyze benefits, and an efficient modernization project scheme was found on the basis of the analysis.
A smooth collaboration system has to be established among market distributors in the project process so that the Eomgung Agricultural Product Wholesale Market can cope with the changing distribution environment through the modernization project. Another thing required is to observe the modernization project from a long-term point of view to smoothly promote the modernization project gradually step by step.

Researchers: Jeon Chang-gon, Kim Dong-hoon, Ha Hong-geun
E-mail: cgjeon@krei.re.kr