Inside the Lotte Mart Gwanggyo branch. Photo Lotte Mart
Kim Ji-eun, a 41-year-old worker living in Junggye-dong, Seoul, began to shop online at Lotte Mart’s mobile app about an hour before work at work in Gwanghwamun and eat dinner with ingredients arriving at the door after work. Recently, Lotte Mart launched an online service called’Direct Delivery’ that delivers within two hours of order. Mr. Kim said, “I have rarely delivered same-day delivery at a large mart, but a fast delivery service is available for me,” he said. “It is convenient because the time to stop by the supermarket to buy dinner food on the way home from work is reduced.
The distribution industry is reinforcing online delivery services by prolonging the novel coronavirus infection (Corona 19). In particular, hypermarkets that have entered the delivery competition belatedly compared to Coupang and Market Curly are working hard to catch customers by launching services that deliver same-day delivery as well as an hour faster.
Online delivery service from 3 hypermarkets. Graphic = Reporter Kim Young-ok [email protected]
Lotte Mart started the’Direct Delivery’ service in April of last year, and then increased the number of stores providing the service to 15 locations in the metropolitan area until last month. Seoul is available at Junggye, Cheongnyangni, Gangbyeon, and Jamsil. Immediately after the delivery service, online order sales at 15 stores from May to December last year increased by 2-3 times compared to the same period in 2019. Lotte Mart recently started a delivery service at Suwan Branch in Gwangju, the first of its local stores. Immediate delivery is delivered within 2 hours of online order, which is 1 hour faster than E-Mart (SSG.com)’s shortest delivery time (delivered after 3 hours after ordering). Lotte’s integrated online mall’Lotte On’ launched early morning delivery service to all areas of Busan in December of last year. If you order fresh food by 11pm, it will be delivered by early morning the next day.
It is not an exaggeration to say that Homeplus has put its life and death on online delivery this year. The number of online shipments per day is greatly increased from 33,000 to 120,000. To this end, the number of pickers (pickers, grocery specialists), currently 1,400, will be increased to 4,000, and delivery vehicles will be increased from 1,000 to 3,000. All of this is to expand the’same day delivery’ service, where orders are placed by 2:30 pm and delivered within that day. An official of Homeplus said, “Homeplus was previously the highest in the industry with same-day delivery rate of 80%, but it plans to increase it further.” .
E-Mart is also accelerating online delivery by securing logistics space in stores. In the case of E-Mart, if you place an order through SSG.com, the product will be delivered at the time set by the customer after 3 hours. SSG.com plans to increase the number of online orders from 50,000 in early last year to 60,000 this year. In addition, when the early morning delivery and weekly delivery in some parts of Seoul and Gyeonggi-do are combined, it handles 140,000 online orders a day.
Major commerce app users. Graphic = Reporter Park Kyung-min [email protected]
In fact, in hypermarkets, the home-cooking culture became established with Corona 19, and offline sales increased significantly last year. E-Mart surpassed 15 trillion in annual sales for the first time in history last year.
Nevertheless, the reason hypermarkets are taking the lead in online delivery is that the scale of online consumption is increasing as much as offline. Corona 19 last year accelerated this. E-Mart’s online shipping sales grew more than 50% compared to 2019. Homeplus also expanded sales on the same day by more than 100% compared to the previous year.
Another factor is the emergence of emerging rivals in the fresh food market, which was the strength of hypermarkets. Coupang (Rocket Fresh) and Market Kurly, who put’delivery in the morning’, have emerged as rivals for hypermarkets. In accordance with the Distribution Industry Development Act, hypermarkets do not ship online when they are not open from 10 pm to 9 am the next day. Market Curly has grown rapidly by targeting this time zone, and recently, Coupang has also added.
Lotte Mart’s logistics team leader Kim Gun-sik said, “Before Corona 19, the online market has been growing and we are preparing, but Corona has shortened the consumption pattern that would take five years to one year.” Not only hypermarkets, but also department stores and supermarkets are rapidly increasing delivery services. Hyundai Department Store opened a food online mall’Two Home’ in July of last year, and started delivery services to nearby areas within an hour. Recently, it launched a service that regularly delivers high-quality ingredients such as Korean beef, side dishes, and fruits.
GS Fresh Mall is increasing the number of delivery vehicles in some areas of Seoul and Gyeonggi Province as users of the’delivery within 3 hours after ordering’ service increase. CJ Olive Young, a health and beauty specialty store, is expanding its delivery service by holding a giveaway event at an online mall as the number of orders for’Today Dream’ (delivery within 3 hours) last year increased 13 times from the previous year.
Reporter Baek Minjeong [email protected]