Enhancing Delivery Competitiveness to Expand Direct Mall Attraction
Reducing Dependence on Large Retailers to Improve Profitability
Demand for Fast Delivery of Fresh Food Expected to Continue
"We deliver even suddenly dropped ingredients within the same day."
Food companies primarily dealing with fresh products are focusing on strengthening their delivery competitiveness and expanding factors that attract customers to their own online malls. Observing the ongoing power struggle over pricing authority between the food industry giant CJ CheilJedang and the distribution giant Coupang since last year, they have learned firsthand that securing a solid proprietary distribution channel is no longer a choice but an essential element for survival and prosperity.
According to the industry on the 10th, Chorokmaeul, an eco-friendly organic specialty brand, is planning to expand and revamp its fresh food same-day delivery service within this month. Chorokmaeul’s same-day delivery is a service that delivers ordered products from the store closest to the delivery location. Through the dawn delivery service introduced in February and the upcoming expansion of same-day store delivery, Chorokmaeul is aiming to increase the proportion of online sales. Although Chorokmaeul’s offline channels are central, generating 95% of total sales from about 380 stores nationwide, the company believes that expanding sales through online channels is essential for external growth.
This service enhancement focuses on expanding the previously somewhat limited purchase items and improving some inconveniences in usability that reduced purchase convenience, thereby increasing customer convenience. Specifically, the system has been revamped so that the fastest delivery method based on the address is automatically applied when placing an online order, and customers can check at the order stage whether they can receive same-day delivery, dawn delivery, or parcel delivery. A Chorokmaeul representative explained, "This is to expand accessibility to online orders and strengthen same-day delivery based on offline stores nationwide, aiming to advance integrated online and offline services."
Pulmuone is also focusing on attracting customers by providing daily delivery and store delivery services on its online mall ‘#(Shop)Pulmuone’. Daily delivery is a service where ‘Morning Step’ delivers products such as green juice or salads directly to customers’ homes, and store delivery is a service that delivers ordered products from the nearest ‘Orga Whole Foods’ store. Notably, since introducing dawn delivery in 2019, if orders are placed before 7 p.m., delivery is made before 7 a.m. the next day. By strengthening delivery competitiveness, as of May, the number of customers purchasing from Shop Pulmuone increased by 187% compared to the same period last year, and sales also rose by 59% during the same period.
hy, the pioneer of home delivery, continues to strengthen delivery competitiveness based on more than 520 nationwide business bases equipped with large refrigeration systems and 11,000 ‘Fresh Managers’. hy emphasizes securing customer-close channels as a differentiated strength.
An hy representative said, "In terms of scale, Fresh Managers are comparable to the 2nd or 3rd largest courier companies. When customers request product refunds or exchanges, on-site responses are possible, and same-day delivery time changes and product modifications are also available. If customers have a large stock of products and do not want to receive them, they can postpone the receipt timing through ‘skip’."
The strengthening of delivery competitiveness by food companies ultimately aims to increase visits to their own online malls and secure a certain level of independence from large distribution channels. If sales are concentrated in specific distribution channels, it becomes difficult to gain an advantage in future price negotiations, and ultimately, securing the desired level of margin may be challenging. Many believe that observing the conflict between CJ CheilJedang and Coupang has made the need for diversifying sales channels more apparent.
An industry insider said, "Improving product quality should be the top priority, but to maintain and strengthen price negotiation power with distribution channels, it is necessary to enhance the competitiveness of proprietary channels. When the number of customers on the company’s own mall increases, it is possible not only to secure loyal customers and increase profits but also to improve efficiency in inventory management based on production and sales data."
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