Evolving 'Yakult Ajumma'... hy Strengthens Delivery Service Business

hy, Focused Development of Predit Delivery Service
11,000 'Yakult Ajumma' as the Biggest Asset
Partnerships with Over 70 Regular Delivery Service Companies Under Review
New Logistics Center in Nonsan Also Being Built... Completion Scheduled for Next Year

The Fresh Manager of hy is delivering the Predit delivery service product to a customer. Photo by hy

[Asia Economy Reporter Song Seung-yoon] hy is aiming to leap beyond the food and beverage sector, where it was known for its fermented milk product Yakult, to become a specialized distribution and logistics company. The plan is to diversify revenue streams by fostering delivery services as a new growth engine, utilizing the industry's only proprietary distribution network.

According to hy on the 13th, the company is reviewing partnerships with over 70 companies, including fresh food, cosmetics, and credit card firms, related to the ‘Predit Delivery Service’ launched in July last year. Some companies are reportedly in the contract negotiation stage. The Predit Delivery Service uses 11,000 delivery staff called Fresh Managers, formerly known as ‘Yakult Ajumma,’ to provide delivery services on behalf of companies without their own delivery capabilities.

hy started this partnership delivery business based on the judgment that the fermented milk market, its core business, has overall stagnated. With the prolonged COVID-19 pandemic boosting the online market, securing a foothold in the logistics and distribution market became crucial, and hy believed it could stably capture the market by leveraging its existing Fresh Manager channel.

This service has the advantage of being able to deliver precisely on the date and time customers want, unlike parcel delivery, because the managers who regularly deliver hy products reside in their respective areas. This is why companies offering regular delivery services are the main target. The number of products they can handle daily reaches 5 million. Since items are delivered in an electric cart called ‘Coco,’ products only need to fit inside the cart. As the cart itself functions as a refrigerator, packaging materials such as styrofoam or boxes can be minimized for fresh food. Coco carts have been distributed nationwide with 11,111 units matching the number of Fresh Managers. Currently, two companies use the Predit Delivery Service: ‘Cheongdam Eun,’ an eco-friendly baby food manufacturer, and ‘Wiseley Company,’ which provides regular delivery of razors. Wiseley started test deliveries last month, and as of this month, the cumulative number of deliveries exceeded 4,000. After formal contracting, daily deliveries are expected to exceed 40,000.

A bird's-eye view of Nonsan Logistics Center under construction by hy in Dongsan General Industrial Complex, Chungnam./Photo by hy

To strengthen delivery capabilities, hy established a dedicated delivery business team for the Predit Delivery Service earlier this year and organized it as a regular department. Its main tasks include securing, selecting, and contracting partners, designing business models for each partner, and managing post-contract operations. Additionally, related departments collaborate across the company to focus capabilities on this business, including sales to client companies, logistics process design, IT infrastructure development, and exclusive delivery package design. A new logistics center is also under construction to handle increased cargo volume. hy plans to invest 117 billion KRW by 2024 to build new logistics and production infrastructure covering 24,793㎡ (approximately 7,500 pyeong) in the Dongsan General Industrial Complex in Nonsan City, Chungnam Province.

An hy official said, "The distribution landscape has changed due to COVID-19, opening opportunities for companies with logistics infrastructure, and hy has entered the delivery service business leveraging its greatest strength, the Fresh Managers. In the short term, we are focusing on digital transformation of the logistics system, and in the long term, we are committed to achieving the vision of becoming the ‘leading company in fresh last-mile services,’ while offering customers a variety of products and services."