Seocho-gu Opens Door to Large Mart Dawn Delivery... Industry in 'Cautious Mode'

Seocho-gu Announces Administrative Notice to Shorten Large Mart Operating Hours
Large Marts "Immediate Dawn Delivery Difficult" Weighing Profit and Loss

As Seocho-gu District in Seoul pushes for regulatory relaxation to allow early morning delivery by large supermarkets, the retail industry is responding lukewarmly. While the three major supermarket chains say they "welcome" the move, they remain cautious about immediately starting early morning delivery services due to cost concerns.

According to the retail industry on the 27th, Seocho-gu announced an administrative notice to change the operating restriction hours for large supermarkets and semi-large stores (SSM) from the existing midnight to 8 a.m. (8 hours) to 2 a.m. to 3 a.m. (1 hour). This effectively lifts the regulations that had previously blocked early morning delivery by large supermarkets. As a result, four large supermarkets in Seocho-gu (E-Mart Yangjae Branch, Lotte Mart Seocho Branch, Kim's Club Gangnam Branch, Costco Yangjae Branch) and 33 semi-large stores (Lotte Super, Homeplus) will be able to offer early morning delivery.

This move by Seocho-gu is based on an ordinance amended last month by the Seoul Metropolitan Council. The ordinance, proposed by City Councilor Kim Ji-hyang, revised the existing regulation from "operating hours from midnight to 10 a.m." to "operating hour restrictions within the range of midnight to 10 a.m." The implementation of operating hour restrictions is left to the discretion of the district mayor.

However, the large supermarket industry believes it will not be easy to immediately launch early morning delivery. The biggest issue is cost. According to the industry, early morning delivery requires delivering more than 40 items per delivery vehicle to break even. But since existing e-commerce platforms like Coupang and Market Kurly have already dominated the early morning delivery market, if additional demand does not follow, profitability cannot be guaranteed.

Moreover, since early morning delivery by large supermarkets has been completely banned until now, introducing new services requires enormous costs such as logistics systems. Over the past few years, the three major supermarkets, having lost consumers to the e-commerce market, have recorded losses and are undergoing restructuring and cost-cutting, making investment difficult. A representative from a major supermarket said, "It is welcome that Seocho-gu has opened the door in terms of regulatory relaxation, but it seems difficult to immediately implement early morning delivery targeting only the Seocho-gu area."

Meanwhile, Lotte Group’s e-commerce platform Lotte On withdrew from the early morning delivery market in 2022. However, Lotte On introduced next-day delivery service "Naeil Onda" starting January this year. E-Mart’s SSG.com operates early morning delivery services only in limited areas such as Seoul and Incheon in the metropolitan area. Seocho-gu is one of the areas where SSG.com’s early morning delivery is available. Homeplus is conducting same-day delivery through Homeplus Express. Kim's Club is providing early morning delivery in the Gangnam branch area through Oasis Mall.

Recently, local governments have been moving to relax operating restrictions on large supermarkets, but progress is slow. In Seoul, along with Seocho-gu, Dongdaemun-gu changed mandatory closure days for large supermarkets to weekdays. However, Seocho-gu has maintained the nighttime operating hour restrictions that allow early morning delivery. A Dongdaemun-gu official said, "There has been no internal discussion yet about adjusting large supermarket operating hours."

For this reason, the large supermarket industry agrees that amendments to the Distribution Industry Development Act, which contains operating restriction regulations, are necessary. Another major supermarket representative said, "To secure the economic feasibility of early morning delivery, regulatory relaxation should be implemented for an entire region such as 'Seoul, Gyeonggi, and Incheon' as a whole," adding, "Ultimately, the most important thing is the repeal of regulations through amendments to the distribution law."

This content was produced with the assistance of AI translation services.