Peru explores Korea’s inclusive digital transformation strategies to empower MSMEs and traditional markets

December 12, 2024

The UNDP Seoul Policy Centre hosted a study mission from Peru to the Republic of Korea (ROK) from 9 to 11 December 2024, as part of its SDG Partnership programme with Peru on “Supporting Micro-, Small and Medium-sized Enterprises (MSMEs) through Inclusive Digital Transformation”. The Peruvian delegation, led by Minister González Guerrero of the Ministry of Production, consisted of government officials from Peru’s Presidency of the Council of Ministers (PCM), the Ministry of Production, the Municipality of Chachapoyas Province, and the Municipality of San Luis District in Lima, along with representatives from the UNDP Peru Country Office. The mission provided a platform for mutual learning on the topic of modernizing traditional markets and leveraging public-private partnerships to drive inclusive economic growth.

In Peru, MSMEs form the backbone of the economy, comprising 99.4% of businesses and employing millions nationwide. However, the digital divide poses significant challenges, particularly for women-led businesses in traditional markets. To address this, the Innova Tu Mercado (Innovate Your Market) initiative, supported by UNDP Peru, aims to support digital transformation of traditional markets and enhance the competitiveness of MSMEs. Since its inception in 2021, the project has supported over 60 markets and 2,000 vendors. The study mission was designed to help Peru adapt and implement scalable digital transformation models by learning from the ROK’s experience in developing innovative strategies and fostering collaboration between public and private sectors.

a group of people sitting at a bus stop
a group of people standing in front of a building

The Peruvian delegates visited two of Korea’s flagship digital traditional markets, Amsa and Mangwon. These markets demonstrated the integration of digital tools such as live commerce platforms, digital payment solutions and infrastructure for online shopping and delivery. These innovations have improved market visibility and preserved the potential of digital tools to empower local businesses and create sustainable economic opportunities.

The visits also highlighted the critical role of partnerships among the government, the private sector, and market associations. In the cases of Amsa and Mangwon markets, the Korean Ministry of SMEs and Startups, the Small Enterprise and Market Service (SEMAS), ICT companies like Kakao Corp. and Naver, along with the respective market associations, work together to drive inclusive digital transformation of traditional markets.

Meetings with SEMAS and Kakao Corp. focused on Korea’s innovative strategies for supporting digital transformation in traditional markets and building the capacities of small businesses. Kakao’s Dangol Market initiative, implemented through its KakaoTalk platform, enables merchants to enhance customer engagement and visibility through digital maps, promotional messaging, and online mini homepages. SEMAS emphasized its role in facilitating partnerships and providing tailored digital infrastructure to support small businesses. Discussions highlighted the importance of strong merchant associations, trust-building through face-to-face engagement, and leveraging digital tools to sustain offline sales while expanding into online marketplaces.

a group of people standing in a room

The delegation also explored the advanced manufacturing sector of the ROK, gaining insights into the Korea Smart Manufacturing Office (KOSMO)’s innovation programme and examining Shinsung E&G’s Smart Factory as a successful smart manufacturing example. These exchanges highlighted the transformative power of integrating ICT and AI into production systems to boost productivity and sustainability.

a group of people sitting at a table
a group of people posing for a photo

To address the issue of digital inclusion, the delegation visited the Digital Competency Centre run by Korea’s National Information Society Agency (NIA), where they learned about the ROK’s policies and strategies for driving inclusive digital transformation, such as the establishment of the Digital Bill of Rights and initiatives to build digital capacities. These initiatives aim to close the digital divide by providing tailored training for vulnerable groups, offering lessons for Peru. Discussions also explored opportunities for collaboration, including localized education programmes and tools for evaluating the economic impacts of digital inclusion.

a group of people sitting at a table in front of a window
a group of people looking at a screen

The mission provided actionable lessons for Peru to align its policies and strategies with successful digital transformation frameworks. Insights from the ROK emphasized the importance of effective policymaking, public-private partnerships, and capacity-building programmes. The Peruvian delegation identified localized approaches as essential to overcoming barriers such as technological distrust and limited digital literacy, alongside strong policy and legal frameworks, leadership, and stakeholder collaboration to ensure scalability and sustainability.

One of the mission’s outcomes was laying the groundwork for future partnerships with Korean institutions to foster innovation, strengthen MSME competitiveness, and promote inclusive growth in Peru. Mechanisms inspired by the ROK’s approach, such as long-term planning and fostering public trust in technology, were identified as critical for empowering marginalized groups, including women and the elderly.

Looking ahead, Peru plans to scale its Innova Tu Mercado initiative, drawing on lessons from the ROK to develop actionable frameworks and training modules tailored to local needs. Building trust through inclusive policies and strategic partnerships will remain a priority. By bridging the digital divide, empowering women-led businesses, and enhancing MSME competitiveness, Peru seeks to foster sustainable and inclusive economic growth.

a group of people posing for a photo
a group of people sitting at a table