SME and Startups Minister Han Seong-sook visited the Donghaeng Festival and stressed the need to boost spending at small businesses. The co-marketing sales event linking major retailers with small merchants is a meaningful attempt. Policies that energize struggling neighborhood commercial districts and encourage consumer participation are needed in the current economic climate. The question is whether the effort stops there. The success of the policy will hinge on whether it moves beyond a one-off spending push and builds a structure in which small merchants can survive on their own.
For years, policy for small merchants has largely stayed in “support” mode: when sales fall, try to spur consumption; when hardship grows, inject public funds. That approach is not a fundamental solution. Consumption is an outcome, not a cause. Without product competitiveness and workable distribution channels, any consumption-boosting campaign will be temporary. The Donghaeng Festival can be a starting point, but it will not become a solution without structural change.
First, policymakers need to distinguish among the people they are trying to help. Treating all small merchants as one group has clear limits. Subsistence self-employed operators and small businesses with growth potential require different approaches. The former need stability and protection; the latter need expanded sales channels and stronger competitiveness. Past policy has leaned toward uniform support without that distinction, leaving both protection and growth unclear. Han’s task is to design this two-track structure more clearly.
Sales-channel policy also needs a reset. Ties with major retailers are necessary, but forcing or allocating shelf space is not desirable because it can distort competition. Instead, policy should lower barriers to entry. Major retailers and platforms should be able to test small-merchant products for a set period, with decisions on placement made naturally based on consumer response. Government should focus on supporting logistics, data and marketing in that process. The goal is not to hand out sales channels, but to create conditions that allow small merchants to enter them.
Approaches to “industrializing” small merchants should also differ. It is unrealistic to assume every small business can adopt digital transformation and data-driven management. Still, some growth-oriented merchants can. Policy should identify them and concentrate support. Businesses with online sales capability, brand-building capacity and potential for overseas expansion should receive bold investment. At the same time, stability measures should continue for subsistence operators without imposing excessive burdens.
The role of event-driven policies like the Donghaeng Festival should be defined as well. Such events may be necessary, but they are not sufficient. They can stimulate short-term spending, but they do not create a sustainable revenue structure. Events should be treated as a supporting tool, while structural reform should be the core policy. The strategy should pair consumer exposure through the festival with improvements in distribution systems and product competitiveness so demand can continue.
Government’s role should be equally clear. The answer lies in the market, but the market needs rules and design to function properly. Government should not replace the market; it should build a framework for fair competition. That includes preventing unfair trade, improving access to platforms, and building data and logistics infrastructure. Competition should then be left to the market.
Han’s message is meaningful as a starting point. The intent to revive consumption and help small merchants is clear. But policy is not completed by intent. It is completed by structure.
The Donghaeng Festival is now being tested: whether it ends as an event or becomes the start of structural reform. Han’s task is to move beyond policies that merely spark spending and build a market structure in which small merchants can grow on their own. That is the lasting solution.
* This article has been translated by AI.
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