Korea's Onnuri overhaul pays shoppers up to 10% at traditional markets on a smaller budget

Divide the budget by the issuance target and next year's program costs almost exactly what this year's does per won. This year's 457.958 billion won against 5.5 trillion won of vouchers is 8.33 won of budget per 100 won issued, and next year's 382.88 billion won against 4.6 trillion won is 8.32 ^[1]. Both numbers fall by about 16.4% ^[2]. The government is dropping its recent practice of raising issuance and the discount rate year after year ^[19].

Inside that smaller budget, the Ministry of SMEs and Startups has repriced the voucher by location. Against today's flat 7% digital discount ^[4], a won spent at a traditional market gains three points and a won spent at a Seoul-area neighborhood shop loses two, leaving five points between them ^[4]. The ministry's description attaches the capital-region condition to neighborhood districts and does not state one for traditional markets ^[5][6]. Paper stays out of the rebate because the ministry says it cannot verify where paper is spent ^[8]. The plan also lets credit card points and public-institution welfare points convert into digital certificates ^[16].

Most voucher spending already happens where the rebate is largest. Of the 3.95 trillion won redeemed last year, 2.6 trillion won, or 65%, was spent at traditional markets, and 57% was spent outside the capital region ^[13]. If digital holders keep that pattern, the blended benefit is at least 8.25% of face value, with 65% of spending at 10% and the other 35% at 5% ^[3]. It reaches 9.3% if all of that 35% lands in provincial districts, against 7% now ^[3]. Last year's split mixes paper and digital, so the digital figure is an estimate. If shoppers change nothing, the state pays more per won spent, and the saving comes from selling 900 billion won fewer vouchers ^[9].

The plan can go three ways. Shoppers at Seoul-area neighborhood shops could move their vouchers to markets for five extra points, the result the government expects ^[18]. Alternatively those shoppers, and paper buyers, simply buy fewer vouchers; a ministry official said next year's issuance is likely to fall below this year's level ^[12]. A third path is a sales shortfall that brings extra budget through the National Assembly, an option the ministry says it is considering ^[12].

I think the second path is the likeliest for the Seoul-area slice, and that most of the new rebate will be paid on market spending that was already happening. The counter-case is the size of the new gap. The discount has not varied by venue since the program began in 2009 ^[1][2], so five points is the first price difference between venues that voucher holders have faced. Digital holders who live near both a market and a neighborhood strip now have a reason to move. The view is wrong if next year's redemptions put the market share well above 65% and the provincial share well above 57% ^[13].

"We will work to make the Onnuri gift certificate a reliable catalyst for growing sales for traditional market merchants and provincial merchants," said Lee So-young, Minister of SMEs and Startups ^[17].