Dawn Delivery Three-Way Battle Expands from Seoul Metropolitan Area to Chungcheong Region

[Asia Economy Reporter Kim Yuri] The "dawn delivery war" that began in the Seoul metropolitan area is spreading to the Chungcheong region. Following Market Kurly and Oasis Market launching dawn delivery services in Chungcheong last May, SSG.com joined the competition this month. They plan to expand the dawn delivery stage nationwide as soon as their logistics networks are established.

◇SSG.com Also Launches 'Chungcheong Dawn Delivery'

SSG.com, the integrated online mall of Shinsegae Group, officially started dawn delivery services on the 12th in major cities of the Chungcheong region, including Daejeon, Cheongju, Cheonan, Sejong, and Asan. This marks an expansion to the Chungcheong area two years after entering the dawn delivery market. Dawn delivery has seen a surge in users since the COVID-19 pandemic, as customers can receive products ordered online the previous night by the next morning.

To support dawn delivery in Chungcheong, SSG.com established a separate cold chain logistics center in Cheongju. Products are moved from the Gimpo online-only logistics center "NE.O" according to customer orders, then sorted at the Cheongju logistics center before being delivered to customers in Chungcheong. To increase the customer base in Chungcheong, a promotion is underway offering a "Starbucks umbrella" to 2,000 customers who purchase over a certain amount (100,000 KRW). An SSG.com representative said, "Products loaded at Gimpo ‘NE.O’ can reach Chungcheong within three hours," adding, "We will also consider gradual expansion of service areas in the future."

◇Considering Characteristics of High-Income and Dual-Income Households

Chungcheong is not only geographically close to the Seoul metropolitan area but also has a high proportion of high-income and dual-income households, making it a region with strong demand for dawn delivery. This is why dawn delivery companies choose Chungcheong as their next expansion area after the metropolitan region. According to Statistics Korea, the proportion of dual-income couples in Sejong City reached 50.6% in the second half of last year, while Daejeon stood at about 46.7%. Sejong City also boasts the highest household income nationwide.

For these reasons, dawn delivery companies Market Kurly and Oasis Market also stepped into Chungcheong last May. Market Kurly, in partnership with CJ Logistics, offers "Saetbyeol Delivery (dawn delivery)" services in major Chungcheong cities such as Daejeon, Sejong, Cheonan, Asan, and Cheongju. Market Kurly stated, "Orders in Chungcheong doubled within two months of launching the service," and added, "We plan to expand service areas to the southern region in the second half of this year."

Oasis Market is also providing dawn delivery services in Chungcheong cities including Asan, Cheonan, and Cheongju. Recently, the number of deliveries in Chungcheong has tripled compared to the first week of service introduction. They plan to start services in Sejong and Daejeon within this year. Recently, they have also been pushing to build new logistics centers in Ulsan, Gyeongnam, and the Jeolla region, aiming to provide services in major cities nationwide except Jeju by next year.

The industry expects competition over market share and expansion of dawn delivery areas to intensify further. The domestic dawn delivery market grew rapidly from 800 billion KRW in 2019 to about 2.5 trillion KRW last year. This year, it is expected to reach around 4 trillion KRW. A retail industry official said, "The trend of online grocery shopping accelerated by COVID-19 will continue for the time being," adding, "The movement to expand service areas by dawn delivery companies will also accelerate."