[Exclusive] "Step Aside Coupang"... Naver and CJ to Introduce 'Digital Twin' Following AI in Logistics Centers

Applied to Gunpo Fulfillment Center by the End of This Year... Core Technology for Logistics Automation
Global Logistics Industry 'Mega Trend'... Adopted by Global Companies like DHL
Advanced Logistics Demand Forecasting... Enables Cost Reduction and Accident Prevention
New Technology Challenges Competitors... Coupang in Early Review Stage

A CJ Logistics worker is performing logistics tasks at the Gunpo Fulfillment Center.
[Photo by CJ Logistics]

[Asia Economy Reporters Junhyung Lee and Baeri Boo] The alliance of Naver and CJ Logistics is introducing digital twin technology to the Gunpo Fulfillment Center, a smart logistics center. Digital twin technology creates a virtual "twin" of reality in cyberspace and applies various data obtained through simulations to the real world. It is considered an essential technology to achieve the ultimate goal of logistics companies: "automation of logistics centers." This is the first time digital twin technology has been introduced in a logistics center in South Korea. Naver is intensifying its competition against rivals such as Coupang by continuously adopting the latest technologies in logistics centers.

Applying ‘Digital Twin’... Accelerating Automation

According to industry sources on the 12th, Naver and CJ Logistics plan to apply digital twin technology as early as next month at the fulfillment center located in Gunpo, Gyeonggi Province. A CJ Logistics official stated, "We are reviewing the application of digital twin technology at the Gunpo Fulfillment Center." Digital twin is regarded as a "mega trend" in the global logistics industry. Global companies such as DHL are also introducing digital twin technology in their logistics centers.

The digital twin technology introduced by Naver and CJ Logistics maximizes the efficiency of logistics processing. It allows various simulations to be run without constraints of space or time. Through numerous simulations, big data on various variables can be rapidly acquired. Utilizing this big data enables precise logistics demand forecasting. Furthermore, it can enhance artificial intelligence (AI), which is the core of "complete automation." An industry insider said, "Digital twin technology is essential to automate logistics centers. Even if automation is not implemented immediately, it can reduce costs by adjusting necessary manpower through accurate logistics forecasting."

It can also improve workplace safety. Digital twin technology allows simulations assuming various disaster scenarios. It enables disaster prediction and preparation of optimal response methods in advance in case of accidents. With the Serious Accident Punishment Act coming into effect in January next year, increasing the burden on logistics companies, digital twin technology is seen as a potential solution. The heightened interest in logistics center safety following the Coupang Deokpyeong Logistics Center fire incident also contributed to this trend.

CJ Logistics TES Logistics Technology Research Institute's Integrated Control Center.
[Photo by CJ Logistics]

Using ‘New Technology’ to Challenge Coupang

While Coupang operates its own logistics centers and expands the market with fast delivery (Rocket Delivery), Naver and CJ Logistics are enhancing logistics competitiveness by adopting new technologies. The Gunpo Fulfillment Center, a testbed for Naver’s "logistics experiments" including AI, logistics robots, and eco-friendly packaging, has now proactively applied digital twin technology. It is reported that Coupang is still in the early review stage regarding the introduction of digital twin technology.

The Gunpo Fulfillment Center is Naver’s logistics innovation base applying advanced technologies such as AI. It has a total floor area of 38,400 square meters (approximately 11,616 pyeong), equivalent to five soccer fields combined. Naver has already applied its self-developed logistics demand forecasting AI model, "Clova Forecast." Clova Forecast predicts Naver Shopping order volumes a day in advance and allocates appropriate manpower to the logistics center accordingly. To strengthen its leadership in the e-commerce market, Naver also launched the logistics platform "Naver Fulfillment Alliance (NFA)" in July.

The digital twin market also has high growth potential. According to market research firm MarketsandMarkets, the global digital twin market size is expected to increase from 3.6 trillion KRW last year to 55.4 trillion KRW by 2026, with an average annual growth rate of about 58%.

Experts foresee that the application of digital twin technology will enable "logistics innovation." Professor Youngjae Jang of KAIST’s Department of Industrial and Systems Engineering explained, "The core of digital twin is building big data. Combining data obtained through vast scenarios beyond human imagination with AI can improve decision-making systems."