This undated file photo, provided by SSG.COM, shows the high-tech logistics center of the online shopping unit of retail conglomerate Shinsegae.
SEOUL, Feb. 22 (Korea Bizwire) — Competition is heating up among South Korea’s major online shopping site operators to speed up their delivery services.
A substantial number of online shopping malls are looking for ways to provide same day delivery to their customers, as well as next day delivery like Coupang’s Rocket Delivery service.
South Korea’s top internet portal operator Naver Corp. formed a strategic partnership with logistics giant CJ Logistics Co. to diversify its delivery services, including ‘designated date delivery’ and ‘today arrival service.’
The company’s new same-day delivery service enables customers to take delivery by the afternoon of the same day the order is placed if they place the order by 10 a.m.
If they place the order by 2 p.m., they can take delivery by the evening of the same day the order is placed.
The two parties also formulated a strategy to speed up delivery using a two-wheel vehicle delivery network.
They also plan to maximize the processing volume using an artificial intelligence (AI)-based prediction method for customer demand and inventories.
Workers at a logistics center affiliated with Korea Post in eastern Seoul sort deliveries on Jan. 14, 2020, ahead of the Lunar New Year holiday. (Yonhap)
SSG.COM, the online shopping unit of retail conglomerate Shinsegae, is looking for sites to establish additional logistics centers while leveraging the network it currently has in place for E-mart Inc., South Korea’s largest hypermarket chain.
In 110 out of 141 E-Mart outlets across the country, there are Picking & Packing Centers called ‘PP Centers.’
PP Centers, located within each E-Mart store, are places where employees called ‘pickers’ search the store to find the items ordered online by customers.
After putting the items in a shopping basket, they package them and send them directly to customers in the neighborhood, thereby contributing to reducing delivery time.
SSG.COM plans to expand or set up new PP Centers in renovated E-Mart stores, with a goal of boosting the share of PP Centers in overall processing volume from the current 40 percent.
Another leading online marketplace 11st teamed up with the state postal service Korea Post to launch a same-day delivery service.
The Daejeon Post Logistics Center, operated by Korea Post, will provide a fulfillment service ranging from warehousing to storage, delivery and inventory management.
J. S. Shin (js_shin@koreabizwire.com)
