[Weekend Money] Which Stocks Will Benefit If Early-Morning Delivery by Large Discount Stores Is Allowed?

Fresh Food Delivery from Large Discount Stores Nationwide
CJ Logistics, in Charge of Emart Deliveries, in the Spotlight

The government's ongoing discussions on whether to allow early-morning delivery by large discount stores are expected to serve as a momentum for share price increases of related companies.

The Democratic Party of Korea, the government, and the presidential office recently held a working-level council meeting to discuss ways to revise the Distribution Industry Development Act. At this meeting, they reportedly reviewed a plan to add an exception clause to the provision that restricts business hours for designated large-scale stores. Under the Distribution Industry Development Act, which was introduced in 2012, large-scale stores are subject to mandatory closure twice a month and business hour restrictions from midnight to 10 a.m.

The party, the government, and the presidential office are said to have discussed introducing an exception clause under which such regulations would not apply to e-commerce. If the amendment bill passes the National Assembly, large discount stores will also be able to offer early-morning delivery.

Analysts say that if early-morning delivery by large discount stores is allowed, it will create opportunities for large discount stores and CJ Logistics. Joo Younghoon, a researcher at NH Investment & Securities, said, "The main category that large discount stores focus on in the online channel is fresh food, and given the nature of these products, demand for early-morning delivery is high. However, for large discount stores whose profitability has deteriorated due to a prolonged slump, it has been difficult to expand the business because of the investment burden. If direct delivery via offline stores is allowed, it will be positive in that early-morning delivery can be expanded nationwide by utilizing existing infrastructure without additional facility investment, and it will enable them to increase their market share in the online fresh food market."

In particular, in a situation where users have been leaving Coupang after its personal information leakage incident, the introduction of early-morning delivery by large discount stores is expected to have a positive impact on the share prices of related companies. Researcher Joo said, "Following the Coupang personal information leakage incident, SSG.com’s daily active users rebounded by 19% and 26% year-on-year in December and January, respectively, showing a rare positive trend. Against this backdrop, the potential to strengthen competitiveness in early-morning delivery will be more than sufficient to serve as a momentum for share price increases of related companies."

Parcel delivery volume is expected to increase, centering on CJ Logistics. Jung Yeonseung, a researcher at NH Investment & Securities, said, "If early-morning delivery by large discount stores becomes possible, CJ Logistics will be able to launch the service first through its partnership with Emart," adding, "For competitors, low operating margins and the cost burden stemming from partial implementation of seven-day-a-week delivery services limit the scope for aggressive service expansion." He continued, "In terms of CJ Logistics’ operating profit, the increase in volume from seven-day-a-week delivery in 2025, combined with additional volume from early-morning delivery, will further strengthen the profit leverage effect from higher shipment volume."