Same-day delivery war raging on

By Park Si-soo

Retailers in Korea have taken it for granted that they will deliver ordered products door-to-door for free. It could take hours to get ordered goods, mostly light-weight ones, delivered to close locations, and days for heavy goods to remote addresses.

They now face increasing pressure to shorten the delivery time to less than 24 hours ― regardless of weight, order volume and even distance.

E-commerce giant Amazon ignited a boom in same-day delivery services several years ago. It recently spilled over into the domestic market here due to online shopping’s explosive growth.

It has forced local retailers to race to build up a vast network of distribution centers across the country.

Korea’s online shopping transactions reached 12.37 trillion won in the first quarter of this year, up from 10.48 trillion won year-on-year, according to Statistics Korea.

Experts say more retailers, especially online-based entities, will join the race because while product availability is losing luster as a competitive edge, fast delivery has become one of the key factors people take into account in deciding where to shop.

CJ O Shopping appears to be reacting to the trend most aggressively. The home shopping affiliate of CJ Group launched a same-day delivery service for six major cities on Monday, the first service of its kind in the TV home shopping industry here. The cities are Seoul, Busan, Gwangju, Daegu, Daejeon and Ulsan.

“Currently it’s applied to products ordered before 9:30 a.m.,” said a CJ official familiar with the issue. “We will extend the available time so that more customers will benefit from the same-day delivery services.”

The company launched the service for Seoul and its surrounding areas in May last year. Rising sales in non-Seoul areas inspired the company to expand.

CJ plans to add Cheonan and Jeonju this month and Cheongju and Changwon next month.

“We will make the service available in 80 percent of the country by 2020,” said Jeon Hyun-nam, a CJ spokesman.

Hyundai Homeshopping, which introduced same-day delivery for Seoul and the surrounding area in 2012, will make it available across the country within this year.

Lotte Mart and Home plus launched a “half-day” delivery service in April by taking advantage of their established nationwide delivery networks, under which ordered products through their websites before 4 p.m. are supposed to be delivered at night.

Online shopping mall GS Shop opened a sizable warehouse in April in Gunpo, Gyeonggi Province, through which products ordered before 6 p.m. on weekdays are delivered the next day.

Another online retailer Coupang has made a massive investment in logistics to launch the same-day delivery services early this year.

Coupang currently operates seven warehouses across the nation, with some 5,500 employees, including 1,000 delivery people, fully committed to logistics. The company plans to set up two or three more warehouses by 2016, with the largest under construction on a 99,173 square-meter site in Incheon.

Ticket Monster and 11th Street and many other online retailers seem committed to following in the footstep.