“Paldogam” is a fresh produce e-commerce platform that directly connects producers from across the eight provinces of Korea with consumers. By bringing the traditionally slow-developing direct-from-farm transactions onto a digital platform, it has garnered a significant response from consumers. In an era of an overwhelming supply of fresh food e-commerce, Rapport Table narrowed its focus in two main areas. Aligned with the approach of its parent company, it identified the 4050 demographic as its target audience. Additionally, it concentrated on seasonal foods and specialty products shipped directly from the producers at the source. After setting this business direction, the company quickly experimented with various hypotheses to uncover the detailed characteristics of its customers. Through rigorous reflections on numerous successes and failures, it accumulated data and maintained a data-driven decision-making approach that does not rely on intuition. By employing a consignment-based business structure with low input costs and expanding private-label products that enable a win-win for producers, it has also managed to secure profitability.
Skipping miscellaneous middle distribution processes, the “direct-from-farm” delivery, where fresh seasonal foods are shipped directly from the production site, actually has a long history. A typical example of direct-from-farm sales is when a farmer loads watermelons they harvested onto a truck and sells them while driving around. Another form is “ordering based on business cards.” It involves receiving a business card with the producer’s contact information and bank account details, placing an order over the phone, and getting the product delivered. Various fresh foods, from beef, tangerines, and apples to kimchi reflecting local characteristics, are traded in this way. Nowadays, with the rise of social network services (SNS), direct-from-farm transactions are also conducted through open chat rooms or SNS channels. In an era that speaks of the Fourth Industrial Revolution, the direct interaction between primary industry producers and end consumers might seem unconventional. However, many people, unsatisfied with foods purchased from nearby markets, large supermarkets, or online shopping malls, reach out directly to producers and use direct-fromfarm services. The main goal is often to enjoy seasonal foods or regional specialties at locallevel taste and prices.
The problem is that these transactions remain unstructured, relying on a rudimentary, person-to-person basis. Direct-from-farm transactions have been notably slow to develop. This is because producers are scattered by product type and region, and many producers involved in direct-from-farm transactions operate on a small scale. It is also challenging to achieve the advantages of economies of scale or quality stability that are realized through middle distribution processes. Therefore, once production scale exceeds a certain level, producers connect with large supermarkets or intermediaries, leaving the direct-from-farm market. There is a structural reason why this market inevitably remains small-scale.
This content was translated into English by AI (using DeepL) from an article that was originally written in Korean in the DBR (Donga Business Review). Therefore, please understand that there may be some awkward expressions.
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