The number of North Koreans buying food, clothes and other items via the country’s nationwide intranet is increasing. While online shopping is still limited to the elite living in the major cities, sources in the country have reported that the online trend is growing.
As an intense heatwave reaching up to 35 degrees Celsius continues in Pyongyang and Pyongsong, food orders through the delivery app Okryu have increased significantly. The app provides greater convenience in ordering food compared to visiting the stores in person.
Food orders can only take place on smartphones and computers connected to North Korea’s intranet and consumers can only use SIM cards on their devices linked to bank accounts to pay for their online orders.
“In Pyongsong, lots of people order noodle soup sold by the Okryukwan Restaurant, while in Pyongyang people can order the roasted seafood dish made at the Haedangwha Service Complex,” a source in Pyongsong told Daily NK.
“There are more and more people ordering food online than by calling on the phone because it’s just more convenient.”
According to the source, the People’s Service General Bureau operates a logistics office to better deal with the delivery of items that have been ordered through Okryu. The office coordinates deliveries of items to customers by motorbikes or vans, depending on the distance and size of the order.
Okryu provides a wide range of choices (some 600 items other than food) that can be ordered online through partnerships with factories in North Korea that produce quality goods. Such partner relationships include the Pyongyang Sock Factory, Sonhung Food Factory, the Ryuwon Shoe Factory, other factories and information and technology exchange partners in Pyongyang, electronic transmission devices through the Yangmokran Video Store, and cosmetics from factories in Sinuiju.
Another online shopping platform called Manmulsang (“store of 10,000 items,” or “many items”) exists, but Okryu retains the largest client base. Okryu launched its services in 2015 and users were limited to Pyongyang until its recent expansion into Pyongsong and Nampo in South Pyongan Province, and Sariwon in North Hwanghae Province, among others.
North Korea’s recent investments in fintech (financial technology) have arisen after considerable preparation, experts say. North Korea’s People’s Service General Bureau began pre-marketing for Okryu from the end of 2014 under the banners of “placing the convenience of the people as our first priority” and “providing the country’s best products,” before the service began operations in 2015.
By the 2000s, North Korean leaders believed there was a need to improve the financial system to reinvigorate the economy. Significant efforts have since been made to enact changes in the system. High-ranking officials involved in the nation’s financial infrastructure were sent abroad to Canada, China, Germany and other countries to learn about financial system reform after 2001.
These efforts led to the passing of the Central Bank Law in 2004 and the Commercial Bank Law in 2006, which created the institutional foundation for the development of commercial banks that could support companies and consumers.
In December 2010, the Central Bank of the DPRK issued an electronic payment card called Narae that was linked to bank accounts and required those involved in foreign-currency earning operations to use the card to pay for products and services. The users of the Narae card were limited, which restricted its widespread use, but those living in major cities like Pyongyang and Pyongsong, along with Ministry of Foreign Affairs officials and foreigners (including Chinese-Koreans), are still using the card to this day.
The head of the Central Bank of the DPRK, Kim Chong Kyon, said in a February 2015 interview with the Choson Sinbo, “We are improving the way we conduct financial business to ensure the establishment of our own style of economic management, and establishing financial measures that are contributing to the leading and emergent activities of our economic institutions and enterprises.”
Sources in North Korea surmise that some of their fellow countrymen must have a great deal of income in order to conduct payments through banks and order food online.
“People have to be saving a certain amount of money at a commercial bank in order to use the electronic payment systems,” said a separate source in South Pyongan Province. “The only people who could save money in a bank and buy expensive food and get it delivered are local elites in the government and business worlds.”
Essentially, it is very difficult for ordinary North Koreans, who survive day-by-day, to use such a system.
Moreover, ordering items other than food online is not easy. Individuals can order items from Okryu, but there are delivery fees involved and small-scale orders are almost impossible to place given the country’s poor logistics infrastructure. Most people consider Okryu a place for companies and business people to make wholesale orders.
“The country’s poor state of infrastructure makes a delivery to a distance more than 50 kilometers very expensive. Only orders that allow for the factory to still make a profit, like places near factories in Pyongyang or Pyongsong, are possible,” another source in South Pyongan Province explained.
The delivery of food is generally made by those in the wealthy elite. There are many in the elite who receive daily deliveries of milk and cheese, and regularly order expensive food. The cost of online food is generally three or four times that of the price of a simple bowl of noodles at the local market. Ordinary North Koreans cannot afford such luxuries.
“I think it’s a significant step in the right direction that North Korea has introduced an electronic payment system using the latest technology,” Kim Jong Tae (alias), a defector who used to work in a trading enterprise near Pyongsong, told Daily NK.
“Most people are surviving on corn and rice and it’s imperative that North Korea now quickly moves to implement reforms and opening to raise the quality of life of everyone.”
Kim emphasized that fundamental reforms in the country’s economic system were needed and that “North Korea should denuclearize quickly so that energy can be spent on reinvigorating the markets and trade.”
“Once trust in the financial system is established among the people, Okryu and other similar services could see significant growth (more than 100%) in just a year,” he concluded.
