North Korea’s Online Shopping Secrets: How Do They Purchase Goods from Afar?

In North Korea, parcel delivery differs from the advanced distribution networks in other countries. Instead of online transactions with features like exchanges and refunds, the country relies on what are called “service cars” and “porters” for its distribution network, which is relatively basic.

North Korea lacks a comprehensive system for online e-commerce, from purchasing long-distance products to home delivery. While there are online shopping malls in the country, they primarily handle local deliveries, especially for food orders, and their usage is limited due to the low internet penetration rate.

Delivery Process with “Service Cars” and “Porters”

So, how do North Koreans purchase long-distance products? They typically use “transfer operators” for such transactions. When merchants receive orders, they place requests with merchants in other regions and ask for deliveries to their area. Transfer operators manage the relay and delivery process between these merchants in different regions.

Transfer operators employ two primary methods: direct delivery from store to store and transporting parcels to regional parcel collection centers.

When parcels arrive in the area of the person who placed the order, they are safely delivered to homes using “service cars” and “porters.” Service cars transport people and goods, often used when individuals load their ordered goods directly onto the vehicle. Porters, on the other hand, exclusively carry goods.

Orders may sometimes visit the store or collection center and use a ‘service car’ to transport their goods home. Alternatively, they might ask a ‘porter’ to receive the goods at the collection center or store and arrange delivery to their residence.

Due to the complex process and the fact that transactions occur privately between individuals, it’s nearly impossible to return or exchange parcels in North Korea. A formal trading order is required for returns or exchanges, but the Jangmadang market, which operates to evade state surveillance, lacks such a structure. Additionally, it’s challenging to prove purchase history without receipts, making exchanges or returns difficult.

Obstacles to Advancing Electronic Payments

Experts predict that it will take a significant amount of time for North Korea to develop a convenient distribution network like other countries. Building infrastructure, including electronic payment systems, is essential.

Eun Mi Jung, a research fellow at the Unification Research Institute, explained, “To achieve this, suppliers, sellers, and consumers must converge on a single online platform, which requires substantial infrastructure.” She added, “North Korea’s official financial system must be fully functional for this to happen. However, most North Korean residents don’t use banks; they prefer yuan and dollars over the won.”

She also noted, “The intra-distribution rate among North Korean residents is less than 10%, and mobile payments are only feasible when the electronic payment system is well-established,” concluding that it’s currently “completely unattainable.”

Jung further mentioned, “The North Korean government has recently emphasized electronic payments and is attempting to move in that direction. Currently, the currency circulation in the market is unregulated, but with electronic payments and an active distribution system, it could be controlled and understood considerably.” However, she cautioned that substantial institutional reforms are necessary, and such progress is still distant.