As same-day delivery wars has heated up in South Korea, traditional big-box retailers are rushing to join hands with the country’s No. 1 food delivery platform Baedal Minjok – Baemin for short.
Korea’s hypermarket chain operator Homeplus announced on Tuesday that it will start on-demand delivery services through Baemin’s so-called quick commerce service.
In November, the country’s retail giant E-Mart Inc. became the first Korean hypermarket operator to join the German-based Delivery Hero-backed food delivery platform for the on-demand and same-day delivery of its products.
Smaller supermarket chain operators such as E-Mart Everyday, GS Retail Co.’s GS The Fresh and Homeplus Express already joined Baemin’s non-food delivery services this summer.
Korean brick-and-mortar retailers’ rush to join the country’s No. 1 food delivery app operator is largely driven by burgeoning demand for fast delivery in the country.
Korea’s so-called quick commerce market, covering on-demand and same-day deliveries, especially delivery in one hour after purchases, is forecast to jump to more than 5 trillion won ($3.6 billion) in 2025 from 1.2 trillion won 2021.
The country’s same-day delivery market’s growth has been largely driven by the success of Coupang, Korea’s largest e-commerce platform player, and the country’s dawn delivery pioneer of fresh produce Kurly Inc., which are credited for drastic changes in the country’s retail landscape.
However, building a nationwide network for on-demand delivery requires massive investment beforehand so offline-focused supermarket and hypermarket chain operators have decided to join hands with Baemin.
The same-day delivery has revolutionized the logistics and retail industries, offering unprecedented convenience to consumers by ensuring the delivery of products within the day of purchase. It caters to the growing demand for immediate gratification.
BAEMIN’S NEW GROWTH ENGINES
The country’s No. 1 food delivery platform operates the B Mart service, which delivers daily necessities ordered on the Baemin app in 30 minutes, and Baemin Store, where other vendors can sell their products.
The delivery app operator pins high hopes for the two non-food delivery services as its new growth drivers.
Its partnership with traditional retailers is also expected to enable Baemin to foray into other e-commerce realms covering fresh produce, digital devices and home appliances, which could increase Baemin users.
The traditional retailers using Baemin’s platform are also expected to attract new customers by leveraging Baemin’s about 22 million monthly active users.
Korean retailers are grappling with losses after losing many customers to e-commerce platforms, especially Coupang, which delivers orders on the same day or the very next day.
By Ji-Yoon Yang
yang@hankyung.com
Sookyung Seo edited this article.
