From sofas to soft drinks, rapid delivery expands across retail

Fast delivery is no longer just an e-commerce battleground. From home shopping networks and fashion platforms to furniture retailers and beverage companies, businesses across Korea are racing to get products to customers' doorsteps faster.

Home shopping operators are leading the charge, having wasted no time in joining the delivery-speed race.

Shinsegae Live Shopping recently launched a quick-delivery service, allowing customers in Seoul to receive products within one to five hours after a broadcast ends. The company stores anticipated inventory in logistics centers and uses courier companies' rapid delivery networks to fulfill orders.

Hyundai Home Shopping has introduced automated equipment, such as robotic arms capable of picking multiple products at once, at its logistics center in Hwaseong, Gyeonggi, in early June. The upgrades have reportedly reduced shipping preparation time, a key factor in speeding up deliveries, by up to 20 percent.

CJ OnStyle plans to extend the order cutoff time for its same-day delivery service, from noon to 3 p.m.

The race for faster delivery is also spreading to other industries.

Online fashion commerce platform Ably recently launched a service that allows orders placed by midnight on weekdays, or by 10 p.m. on weekends and public holidays, to be delivered the next day.

The move is also aimed at attracting more sellers to the platform.

"Even small businesses will be able to improve their competitiveness regardless of their own logistics capabilities [through the quick delivery service]," an Ably representative said.

Other platforms have already seen tangible results from faster delivery services.

Online fashion platform Zigzag expanded its next-day delivery service to operate seven days a week. It was previously only available during weekdays. The move helped boost weekend transaction volume by 30 percent in the January to May period compared with a year earlier.

Hite Jinro Beverage, the non-alcoholic subsidiary of liquor company Hitejinro, launched a next-day delivery service on June 18 through its online store. Orders placed by 11:59 p.m. on weekdays or by 9:59 p.m. on weekends arrive the following day.

IKEA Korea has also been operating its quick delivery service since April. Customers who order furniture weighing less than 25 kilograms (55 pounds) from its online mall by 2 p.m. can receive their purchases the next day.

It’s not just online retailers, however. Competition in quick commerce is intensifying among offline retailers as well.

Convenience store chains GS25 and CU recently partnered with food delivery service Coupang Eats to establish 24-hour quick-commerce services. Daiso also expanded its quick-delivery coverage to all 25 districts of Seoul.

SSG.com is expanding its service that delivers products ordered through the platform directly from nearby Emart stores.

Vendors are continuing to adjust to rapid growth in the sector. Korea's quick-commerce market expanded from 350 billion won ($226 million) in 2020 to approximately 4.4 trillion won last year, nearly a 13-fold increase in just five years, according to market research firm Statista. The market is projected to reach about 6 trillion won by 2030.

Some experts, however, warn that the industry’s race for speed could come at the expense of weakened profitability.

"Building a stable logistics infrastructure and developing a sustainable business model that reduces cost burdens will be crucial if the fast-delivery market is to continue growing,” said Lee Hong-joo, a professor in the Department of Consumer Economics at Sookmyung Women’s University.

BY LIM SUN-YOUNG [[email protected]]