After some users began showing signs of leaving Coupang following the personal data leak at the end of last year, Korea's e-commerce companies are accelerating upgrades to their delivery services from the start of the year. They are competitively moving to improve the user experience by subdividing delivery time windows more than before and strengthening arrival-guarantee features.
Until now, the dominant view in the e-commerce industry was that it would be difficult to overturn Coupang's solo lead, given the massive logistics investments and nationwide delivery infrastructure. However, with recent changes in market conditions, a mood is forming in which competitors are again actively moving to bolster delivery competitiveness and expand logistics investment.
According to the retail industry on the 9th, Gmarket and Auction recently selected Wekeep as the official fulfillment partner for their arrival-guarantee service Star Delivery, moving to strengthen delivery competitiveness. Wekeep is a corporations that operates fulfillment centers at major hubs nationwide, including Incheon, Icheon, Hwaseong, and Busan, through its in-house developed artificial intelligence (AI).
Gmarket and Auction's Star Delivery is a seven-day-a-week service that guarantees next-day delivery if an order is placed by 11 p.m. on weekdays and 10 p.m. on weekends, with same-day dispatch. By securing Wekeep as a partner in addition to existing partners CJ The Fulfil and Poomgo, Gmarket and Auction expect to reduce sellers' logistics burdens while increasing the stability of their arrival-guarantee service.
SSG.com has expanded the service area for its fast-delivery service BaroQuick to differentiate itself from Coupang. BaroQuick delivers items from E-MART stores to residences within a 3-kilometer radius of the store in about one hour. As of the end of last year, SSG.com operated BaroQuick only at 60 E-MART stores nationwide, but it plans to expand this to 90 locations by the first half of this year.
SSG.com is also upgrading its SSG Delivery service, which allows customers to receive items on their preferred date and time. Using the logistics facilities of about 100 E-MART stores nationwide, it will increase daytime delivery volume and subdivide customer pickup time windows by region into up to five slots.
Kurly introduced Midnight Dawn Delivery last month, establishing a twice-daily delivery system. The service delivers items ordered from 11 p.m. the previous day to 3 p.m. the same day between 9 p.m. and midnight that day. Kurly currently offers Midnight Dawn Delivery in most areas of the Seoul metropolitan region, including Seoul, Incheon, and Gyeonggi, and plans to expand the service area going forward.
11Street last month introduced free returns and exchanges and late-arrival compensation for items under its fast-delivery service Shooting Delivery. For unopened items returned or exchanged due to a simple change of mind, 11Street covers the shipping cost, a benefit similar to what Coupang offers Wow membership subscribers.
If delivery is delayed beyond the estimated arrival date provided at checkout, the company pays 1,000 points in 11Pay points usable on 11Street. It is a compensation system similar to Coupang's issuance of Coupang Cash for delivery delays.
Analysts say that changes in the market environment surrounding Coupang are behind e-commerce companies' moves to strengthen delivery service competitiveness. Coupang had effectively established a solo lead in the e-commerce market based on massive logistics investments and a nationwide delivery network. In the industry, the prevailing assessment was that competitors would find it difficult to catch up in the short term.
However, as some users began to show signs of leaving after last year's personal data leak, competitors appear to have viewed this as an opportunity to shift the market landscape and moved to respond aggressively.
Actual data also show signs of change. According to the app and retail analytics service Wiseapp Retail, Coupang's monthly active users (MAU) last month were 33,123,043, down 0.2% from the previous month. The MAU, which was 34,398,407 in Nov. last year, fell by about 1.28 million in roughly three months after the personal data leak.
An industry official said, "The current situation, in which Coupang is faltering, is an opportunity for e-commerce companies," adding, "Depending on how many users who left Coupang they can absorb, the market structure will change going forward."