E-commerce companies that have focused on shortening delivery times are now accelerating service upgrades, including strengthening membership benefits, easing free-shipping thresholds, and introducing artificial intelligence (AI). As delivery competitiveness has evened out across the industry, analysts say the axis of competition is shifting toward benefits consumers can feel and enhanced shopping convenience.
According to the industry on the 2nd, Gmarket will launch a new accrual-type membership, "Kkok," on the 23rd. Members will earn up to 5% of their cumulative purchase amount as "Smile Cash," an on-platform currency. The plan also includes a benefit that pays the difference in Smile Cash the following month if the monthly accrual is less than the monthly fee. The monthly membership fee is set at 2,900 won.
SSG.com also launched a grocery-focused membership, "Sseuk Seven Club," early this year. For a monthly fee of 2,900 won, members earn a fixed 7% back on Sseuk Delivery purchases and receive discount coupons (up to 7%) usable at Shinsegae Department Store Mall and Shinsegae Mall as key benefits. SSG.com last month expanded its membership by adding a bundled option that allows access to TVING for an extra 1,000 won per month on top of the existing membership.
Moves to lower free-shipping thresholds to make grocery shopping more accessible are continuing. Oasis Market is offering free delivery on direct-shipped products within its dawn delivery zones for purchases of just 9,900 won or more starting this month. The aim is to ease the burden of grocery shopping amid high inflation and improve access for small-basket shoppers in one- to two-person households.
Kurly likewise ran a promotion in Feb. offering unlimited free shipping to paid members on purchases of 20,000 won or more. Given that the previous free-shipping threshold was 40,000 won, the move is seen as a strategy to reduce cart burden and increase purchase frequency.
Attempts to improve the delivery experience are also increasing. 11Street recently introduced free return and exchange services and compensation for delayed arrival for products 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 to Wow membership members.
If delivery is delayed beyond the estimated arrival date shown at checkout, 11Street also provides 1,000 points in "11Pay Points," which can be used on 11Street. The compensation framework is similar to Coupang's, which offers Coupang Cash for delivery delays.
There is also continued momentum to enhance shopping convenience using AI. Lotte On this month added a conversational search service, "Fashion AI," to its platform. Unlike traditional keyword searches, it recommends products by factoring in style, use case, and even emotional expression.
Naver also recently rolled out a beta "Shopping AI Agent" on the Naver Plus Store app, bolstering product information summaries, comparisons, and review analysis. Musinsa likewise introduced a "fashion-focused AI review summary" service trained on about 21 million reviews accumulated over two years.
The fast delivery market in Korea has largely been seen as led by Coupang with its Rocket Delivery. According to a paid e-commerce membership survey released by the Korea Consumer Agency (KCA) in Mar. last year, Coupang users most frequently cited free shipping (99.6%) and fast delivery (89.8%) as the benefits they use. Satisfaction was also high, with scores of 4.41 for free shipping and 4.27 for fast delivery.
However, as major e-commerce companies have successively strengthened services such as dawn delivery, guaranteed arrival, and fulfillment systems, observers say delivery competitiveness across the industry has evened out. Naver reorganized its delivery services as "N Delivery" last year and divided them into today delivery, tomorrow delivery, Sunday delivery, and requested-date delivery. SSG.com leveraged logistics facilities at about 100 E-MART stores nationwide to enhance "Sseuk Delivery," which lets customers receive products on their desired date and time. Kurly also introduced "midnight Morning Star delivery" early this year, establishing a twice-daily delivery system.
Growth in the online retail market is continuing. According to the Ministry of Trade, Industry and Resources, sales at major online retailers last year rose 11.8% from the previous year. The share of online in overall retail also climbed to 59%, up 2.6 percentage points (p) from a year earlier.
An industry official said, "Fast delivery itself is no longer a differentiator but a basic service," adding, "In the end, how easily customers can place orders without burden, find products, and return items without issues is emerging as the factor that determines repeat purchases."