Interview with Kim Byung-woo, CEO of Elegant Youth
Leveraging Strengths of Last Mile Service
Diapers ran out. Forgetting to purchase them in advance means even if ordered now, they will arrive tomorrow, and it’s not easy to go out shopping while carrying a nursing baby. These days, moms turn on delivery apps in such situations. It’s not just food that can be ordered. When diapers are ordered, nearby urban logistics centers start bustling. After going through the 'Pick & Packing' process of selecting and packing products, they hand them over to riders who perform the delivery. The time it takes for a rider to deliver diapers to the consumer is about 30 minutes after the order. To achieve this, the metropolitan logistics center must predict demand and send products in advance to urban logistics centers to store them in optimal locations.
Woowa Brothers is the company responsible for such Baedal Minjok (hereafter Baemin) logistics services. They have rapidly grown by successfully operating the Baemin1 and Baemin B Mart logistics systems, surpassing 1 trillion won in sales last year. This year, they have begun a full-fledged move toward becoming a logistics innovation company. We met CEO Kim Byung-woo to hear more details.
CEO Kim said, "We operate two central logistics centers in Incheon and Chilgok, and over 60 urban logistics centers (MFCs) nationwide," adding, "The system that connects from logistics centers to last-mile services delivering goods directly to consumers is optimized to provide consumers with a definitive experience." The 'definitive experience' encapsulates the competitive edge emphasized by Woowa Brothers. For example, when purchasing items from an online mall and receiving them by courier, the arrival time is only vaguely known. In contrast, Woowa Brothers builds logistics based on food that must be delivered on time, providing a stable experience where customers can receive products within that time frame. What Woowa Brothers delivers is not just products but the experience of 'quick commerce' where customers can safely receive any product within an hour.
To this end, Baemin B Mart prepares products at a level similar to large discount marts, ranging from food to daily necessities and electronics. They also place logistics centers throughout urban areas with high delivery demand to quickly deliver to consumers. Here, CEO Kim points to the last stage of delivery to consumers, the 'last mile,' as a differentiated competitive advantage. As a former developer, CEO Kim led service advancement in the last mile while serving as the Chief Operating Officer (COO) of Baedal Minjok at Woowa Brothers. CEO Kim explained, "While working in the last mile field, we expanded the scope to overall logistics through system advancement and optimization. Our approach differs from other competitors who enter the last mile after doing logistics."
Riders are responsible for this last mile. Although they are not directly employed, CEO Kim always emphasizes that riders are 'partners.' Woowa Brothers opened and operates the offline two-wheeler training facility 'Baemin Rider School' in 2021, and this year invested 4.7 billion won in capital for the delivery service mutual aid association established jointly by the Ministry of Land, Infrastructure and Transport and the delivery industry. The association will launch a mutual aid product for paid transportation with at least a 15% discount on existing insurance premiums in the second half of this year. CEO Kim said, "We are preparing a lot for what roles we will play for riders in the second half of the year," emphasizing, "We are thinking about the safety of not only riders working with Baemin but all riders, and we believe such considerations are necessary to sustain this industry."
Woowa Brothers achieved a significant milestone last year by surpassing 1 trillion won in sales. With sales of 1.1296 trillion won, they grew more than 56% compared to the previous year. Rapid growth began with the launch of Baemin1 service, and the activation of Baemin B Mart due to the pandemic also contributed. The important thing is the future. Although currently inseparable from Baemin, Woowa Brothers aims to establish itself as a comprehensive logistics company. CEO Kim said, "Right now, we are in the process of building business well with Woowa Brothers," adding, "If we steadily develop our last-mile strengths, we may be able to create other businesses as well."
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