Research Reports
A Study on Changing Structure and Functions of Periodic Markets in Korea

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AuthorLee, Yongsun
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Publication Date2007.12.01
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Original
The purpose of the study is to find out the nationwide status of periodic markets through a nationwide survey on the structure and functions of periodic markets and analyze the structural and functional changes of periodic markets since the 1970s, types of changes, and factors causing the changes. In order to understand the distribution and operating status of periodic markets, representatives of nationwide periodic markets or local government officials responsible for managing periodic markets were surveyed through one-on-one interviews or phone calls. One hundred twenty seven merchants of 18 markets across the country were interviewed to find out the market coverage and features of transactions. To find out market functions and user behaviors, 700 visitors in 19 markets across the country were interviewed.
The major findings of the study are as follows: As of the end of 2006, a total of 562 periodic markets were in operation across the country. This represents a 41% drop compared to 952 markets as of 1976. Periodic markets showed a trend of reduction nationwide and the trend was most significant in Chungcheong, South Gyeongsang and Jeju Provinces. By administrative area, the districts called Dong and Eup (small town) saw the number of periodic markets increasing, while the districts called Myeon (sub-division of county) saw the number dropping. This trend is attributable to the redrawing of administrative areas as well as the sizable reduction of periodic market size in Myeon.
The average number of visitors to a periodic market is 1,029, which is 7.4% lower than 1,111 people in 1976. The average number of stores in a periodic market is 173, up 5.4% compared with 30 years ago. The average revenue of a periodic market per opening is 16.70 million won, which is 52.8% lower than before. The average size of periodic markets currently in operation is smaller than the 1970s. Meanwhile, the number of stores in Dong increased, but the number of stores in Eup and Myeon severely fell, indicating market size being differentiated between urban and rural areas.
The functions of the periodic market have changed a lot. In the past, farm households were the main periodic market users, and they were sellers and buyers as well. These days in periodic markets, their role as sellers has been weakened. In other words, the periodic market's function of selling, collecting and releasing produce has been significantly weakened, and their retail distribution function for consumers has been relatively strengthened. The rural credit financing is mainly served by the National Federation of Agricultural Cooperatives and, as a result, the private credit financing role of periodic market is significantly weak.
On top of economic functions, periodic market's non-economic functions have changed to a large extent. Socialization, information exchange, and other social functions, as well as the cultural and entertainment function of periodic markets, are not active as much as before. Amidst the overall weakness of periodic market functions, some functions are maintained as before or rather strengthened. Today, periodic markets provide opportunities for quality of life amenities to urban citizens, such as ‘time away from routine life’, ‘vitality’, and ‘reminiscence’, and function as the place for spending leisure time for rural elderly people and the place for socialization for small-size store merchants.
Periodic markets are mainly used by full-time housewives (49%) and farmers (31%). The periodic markets are mostly used by the low-income class whose monthly household income is 1.87 million won. For urban users, their ages are evenly distributed, but rural users tend to get older. Tourist visitors have the monthly average income of 2.73 million won, up 46% of the regular periodic market users. Their average purchase amount is 67,740 won, up 54.1% compared with the regular market users. The regular market users go to periodic markets due to price, variety of items, freshness, and proximity (in that order). To the contrary, tourist visitors pointed out confidence in quality, freshness, price, and local specialty (in that order) for the reasons of visiting periodic markets. For the areas of improvement, restroom and parking facilities were pointed out. In the meantime, most farmers who sell produce at periodic markets run small-size farms, and 79% of them are women aged 60 or above. They mainly sell vegetables (71%) and grains (11%) at the markets.
Due to the population reduction, the number of periodic markets per city and Gun (or county) dropped to 3.7 from 5.9 in 1976. The reduction in the number of periodic markets has caused merchants who are used to move around 3-4 periodic markets in turn to expand their travel miles. The travel distance of merchants was 8-12km in the 1970s, but it increased to 30-50km. A regression analysis was conducted against the factors determining market size, and it was found that the market size tends to grow when population and population density are high and that the market size tends to be smaller when the number of periodic markets is high within the same city and county. The markets opening on every seconds and sevenths of a month are larger than the markets held on other days, and the difference among Dong, Eup, and Myeon are found to be statistically significant. The analysis based on the market features above indicates that market size plays an important role, and periodic markets are divided into three types: market for broad area, market for city and county, and market for smaller areas such as Eup and Myeon. The market for broad area has 751 or above stores (merchants) and accounts for 3.3% of the total periodic markets. The market for city and county has 290 to 750 stores (merchants) and accounts for 12.7% of the total periodic markets. The market for smaller areas (Eup and Myeon) has less than 290 stores (merchants) and accounts for 84% of the total periodic markets.
Going forward, periodic markets are predicted to dwindle away. While the speed of decline will slow down, some periodic markets will see more vitality facilitating the gap between periodic markets. To enhance the vitality of periodic markets, restroom and parking facilities should be improved. Accessibility needs to be improved to attract more tourist visitors. Holding cultural activities and events or running experience programs based on local resources could trigger more interest among tourists. Providing space for local farmers for their active engagement would lead to making periodic markets more lively. The central and local government's support to vitalize periodic markets would breathe more life into local economy and create harmony among local communities.
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