Around 2 p.m. on the 20th, I visited the CJ Olive Young micro fulfillment center (MFC) located near Songpa-daero in Songpa-gu, Seoul. Upon entering through the entrance, I saw paper bags with a sticker saying 'today's delivery' neatly arranged on the sorting table. Delivery drivers were bustling in and out of here, taking items and loading them onto their two-wheeled vehicles to head to their destinations.

The Olive Young MFC in Songpa is a logistics center dedicated to the 'today's delivery' service for Gangnam's three districts (Gangnam-gu, Seocho-gu, Songpa-gu), some parts of Yongsan-gu, and Hanam in the southern Gyeonggi Province. It has an area of 300 pyeong (approximately 990 square meters) and handles over 19,000 products. Today's delivery is a quick commerce service that delivers products ordered from Olive Young's online mall on the same day. For orders made by 8 p.m., delivery is guaranteed within three hours.

On the 20th, products classified by the number of orders are being moved in a basket at the Olive Young MFC Songpa store. /Courtesy of Jeong Jae-hwon.

The Songpa MFC has automated most of its logistics processes, maintaining a workforce of about 13 people. In fact, on this day, all complex or labor-intensive tasks in the main processes inside the Songpa location were being performed by machines.

For example, the process of receiving products is designed so that when a barcode is scanned, the area corresponding to the product classification lights up, and the employee only needs to place products in that area. For sorting based on customer orders, after fetching the products, if the employee inserts them randomly, the machine divides and places each item in baskets.

On the 20th, an employee is inserting products into an automatic sorting facility at the Olive Young MFC Songpa store. Products inserted randomly are automatically sorted and placed in baskets according to incoming orders. /Courtesy of Jeong Jae-hwon.

The process of packaging the sorted products has also been automated. The employee only needs to place the already sorted products into packaging bags, and the machine handles the sealing and placing into baskets. Jang Min-hyung, head of the logistics infrastructure team at Olive Young, noted that "the Songpa MFC has automated 70% of the delivery processes from receiving to storage, sorting, and packaging" and "it can handle about 600 orders per hour."

Olive Young launched its quick commerce service in 2018, the first in the health and beauty (H&B) industry. This was to create an omnichannel shopping environment that organically connects online and offline channels.

Initially, products were delivered using the nationwide offline store network, but to support the surge in demand that occurred after the COVID-19 pandemic, the company decided to sequentially introduce MFCs beginning in 2021. This is to enhance delivery speed and efficiency by establishing small logistics centers in urban areas.

On the 20th, the automation equipment sorts and collects items according to customer order details at the Olive Young MFC Songpa store. /Courtesy of Jeong Jae-hwon.

Currently, Olive Young operates 18 MFCs, including those in the capital region and places like Busan, Gwangju, Gyeongju, and Jeonju across the country. Among the nationwide MFCs, there are currently 6 locations with levels of equipment automation similar to that of the Songpa location. It is also planned to gradually increase this in line with customer demand.

Olive Young's today's delivery service has three main types: 'Fast Delivery', '3-4 Delivery', and 'Midnight Delivery.' Fast Delivery guarantees delivery within three hours if ordered by 8 p.m. According to Olive Young, the average delivery time for the Fast Delivery service last year was reported at 55 minutes.

On the 20th, the internal packaging automation equipment at Olive Young MFC Songpa is shown. As employees only need to place items into plastic packaging, the machine automatically performs the sealing and moving processes. /Courtesy of Jeong Jae-hwon.

The 3-4 Delivery guarantees arrival between 3 and 4 p.m. if ordered by 1 p.m. Midnight Delivery is a service that ensures arrival between 10 and 12 p.m. if ordered by 8 p.m. Delivery is free for orders over 30,000 won, while orders under that amount have a delivery fee of 5,000 won for Fast Delivery and 2,500 won for the others.

The usage rate of Olive Young's today's delivery service has been rising, reaching 34.5% in 2022, 41.3% in 2023, and 48% in 2024. The annual order volume has also increased from 5.98 million orders in 2022 to 9.94 million in 2023, and projected to reach 14.99 million in 2024.

On the 20th, the interior product storage space at Olive Young MFC Songpa is shown. /Courtesy of Jeong Jae-hwon.

With these achievements, Olive Young recorded its highest revenue ever at 4.79 trillion won last year. The revenue for the first half of this year also amounted to 2.6961 trillion won, marking a 17.9% increase compared to the previous year and setting a record for the highest performance in a semi-annual basis.

Olive Young plans to establish additional MFCs in Daejeon, Seocho, Cheongju, and Jongno in the second half of this year, increasing the total to 22 by the end of the year. An Olive Young official stated, "We will continue to enhance our online and offline infrastructure and develop various customer-centric services to lead the industry as a pioneering omnichannel company."

※ This article has been translated by AI. Share your feedback here.