Quick Commerce Heating Up, Emerging as New Battleground for Delivery Platforms

Delivery App No. 2 'Yogiyo' New Owner GS Retail
Latecomers Enter Quick Commerce Market Dominated by 'B Mart'
Investment, M&A... Vroong, Barogo, etc. Begin Full-Scale MFC Business

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Competition to dominate the quick commerce market, which offers fast delivery services after ordering, is heating up more and more. Small delivery agency platforms are also seeking breakthroughs through investment attraction and strategic partnerships to compete against Baedal Minjok and Coupang Eats. Alliances and mergers among companies are becoming full-scale, aiming for synergy effects by partnering with the distribution industry.

According to the industry on the 15th, the new owner of Delivery Hero Korea (DHK), which operates 'Yogiyo,' the second-largest food delivery application, is GS Retail. DHK is set to be acquired by a consortium consisting of Affinity Equity Partners, GS Retail, and Permira at a corporate value of 800 billion KRW.

Following the conditional approval by the Korea Fair Trade Commission for the acquisition of Baedal Minjok (operated by Woowa Brothers) by the German delivery platform Delivery Hero (DH), DH had to sell 100% of DHK's shares within six months. The original sale deadline was June 2 but was extended by five months. GS Retail is expected to actively enter the quick commerce business by linking Yogiyo's riders and delivery infrastructure with its convenience stores, supermarkets, and online grocery shopping malls.

Quick commerce, which delivers fresh, processed foods, and daily necessities within an hour of ordering, has emerged as a new battleground for delivery platforms. Quick commerce was pioneered by Baedal Minjok's 'B Mart.' Coupang Eats added a 'Mart' section to its app last month and started delivering daily necessities and fresh foods.

Mesh Korea, which operates the IT-based logistics platform 'Vroong,' has established a joint venture called 'V Corporation' with Oasis Market, a fresh food dawn delivery company, to operate a business-to-consumer (B2C) platform combining quick commerce and dawn delivery services.

The two companies aim to become the next-generation quick commerce platform through real-time distribution logistics operation capabilities based on big data and AI, nationwide online and offline logistics infrastructure, and product sourcing competitiveness.

A Mesh Korea official said, "On the newly launched quick commerce platform, consumers will be able to quickly receive not only real-time food and beverage orders and fresh food grocery shopping but also various essential daily items such as clothing, books, and pet products."

On the 4th, when the measure prohibiting private gatherings of five or more people was expanded nationwide, a food delivery worker was busy moving through the quiet Myeongdong street in Jung-gu, Seoul during lunchtime due to the impact of the novel coronavirus infection (COVID-19).
Photo by Moon Honam munonam@

Barogo plans to expand its urban logistics center (MFC) business following a Series C investment of 80 billion KRW involving 11st Street and CJ. They plan to open a total of 25 MFCs mainly in the Seoul metropolitan area, focusing on regions with concentrated delivery demand such as Gangnam, Seocho, and Songpa.

Shinhan Financial Group has decided to invest 45 billion KRW in Inseong Data, the parent company of Logiol, which operates the delivery agency platform 'Saenggakdaero.' Shinhan Bank plans to launch a food delivery app within the year, becoming the first financial company to do so in partnership with Saenggakdaero.

Currently, Saenggakdaero provides real-time SIM card delivery services in partnership with KT. When ordering a SIM card from KT's MVNO operator's online mall, customers can receive the SIM card within an hour at their company, home, or desired location via a nearby Saenggakdaero rider. This SIM delivery service is being used as a pilot test for the MFC business.

Manna Corporation is expected to expand its business areas such as quick commerce through a recent 35 billion KRW investment from Danal, a specialized integrated payment business company. First, through this investment, delivery agency brands that shared calls such as Gongyuda, Jetcall, Run, and Roadpilot will be integrated into 'Manna Plus.'

A Manna Corporation official stated, "We will absorb and merge 'Dodo Plex,' which operates same-day delivery services, enter the same-day and one-day parcel market, and leap forward as a comprehensive last-mile logistics company, aiming to go public (IPO) within three years."

Meanwhile, Manna Corporation is currently operating the quick commerce brand 'Mart Shop' service centered on Nonghyup Hanaro Mart, based in Jeju Island. Mart Shop provides a one-stop service from order app construction to delivery.