Competition in Tangible Benefits Beyond Free Delivery Heats Up
Lock-in Strategies Driving Up Basket Size and Repurchase Rates
Race to Secure Loyal Customers by Combining Rewards and Content
The e-commerce industry has entered a full-fledged "membership war." Competition has moved beyond the first generation, which centered on free delivery, and the key criterion for consumer choice has now become the real, tangible benefits they feel in relation to the subscription fee. Each company is betting heavily on locking in loyal customers by raising reward rates and combining competitiveness in content, delivery, and grocery (food) services.
According to the industry on the 25th, an analysis by SSG.com of grocery shopping purchase data for its "Sseuksebeun Keulleob" membership showed that from January 7 to February 19, 93% of membership members ordered grocery products such as fresh and processed foods. During the same period, the average basket size for grocery shopping by membership members was about twice that of regular members. Compared with the period before joining the membership, spending on processed foods and fresh foods increased by 23% and 21% respectively, and the repurchase rate was 27 percentage points higher than that of regular members. This means the membership actually led to an expansion in consumption.
An SSG.com representative explained, "Grocery shopping demand has expanded as the intuitive 7% reward benefit has been combined with product competitiveness based on Emart's sourcing and operational know-how, as well as the convenience of Sseuk Delivery, which allows customers to receive orders at their preferred time."
Sseuksebeun Keulleob is structured so that, for a monthly fee of 2,900 won, 7% of the payment amount for Sseuk Delivery (daytime, dawn, and Traders) products is credited as SSG Money at a fixed rate. It also provides coupons of up to 7% every month that can be used on the Shinsegae Department Store Mall and Shinsegae Mall. On March 5, SSG.com plans to expand the scope of its membership by launching a 3,900 won per month product that combines grocery reward benefits with OTT "TVING" content.
Other companies are also accelerating the expansion of their memberships. As the Coupang-centered consumption pattern shows signs of cracking, the number of so-called "Talpangjok" consumers, who compare prices and benefits and move from one platform to another, is increasing. Companies have concluded that free delivery alone is no longer enough to maintain loyalty. An industry insider explained, "Consumers have started to calculate 'subscription efficiency' more and more," adding, "They are no longer just checking whether delivery is fast; the structure has changed so that they also calculate how much they get back relative to their total monthly spending."
Naver Plus Membership (4,900 won per month) has the advantage of offering up to 5% Naver Pay rewards when paying through Naver Shopping. Along with free delivery coupons, members can choose one content benefit from OTT, music, games, or webtoons. Its platform strategy is characterized by bundling search, payment, and content into a single ecosystem.
Kurly's "Kurly Members" has the lowest subscription fee at 1,900 won per month. However, its reward structure is tiered by spending level. There are no rewards for monthly purchases under 300,000 won; 3% is rewarded for 300,000 to 500,000 won, 5% for 500,000 to 1 million won, and 7% for amounts over 1 million won. The monthly reward cap is high at 100,000 won. It is designed to target "heavy users" who consistently spend above a certain level. In fact, as of December last year, the cumulative number of Kurly Members subscribers had increased by 94% year-on-year.
By contrast, Coupang's Wow Membership is the most expensive at 7,890 won per month, but instead of rewards or cashback, it emphasizes the absolute benefit of "unlimited delivery and returns." Its core benefits include free Rocket Delivery and Rocket Fresh delivery, and free return services.
Gmarket also plans to launch a new reward-based membership, "Kkok Membership," within the first quarter of this year. This is its first overhaul of an independent membership in nine years, following the "Smile Club," the industry's first paid membership introduced in 2017. Since its incorporation into the Shinsegae Group, the key question is whether Gmarket can present a differentiated reward structure as it redefines its role in relation to SSG.com.
The industry analyzes membership programs as the most direct means of increasing customer lifetime value (LTV). This is because they secure fixed revenue in the form of monthly subscription fees while simultaneously raising both average basket size and repurchase rates after customers join. In particular, the grocery category, which has a high frequency of repeat purchases, is cited as the area where membership effects are maximized. If OTT and other digital content are combined with this, the model can be expanded into a subscription that covers the consumer's entire daily life.
However, if competition overheats, the possibility of deteriorating profitability cannot be ruled out. Reward-based memberships boost sales, but because they effectively function as an upfront payment of marketing costs, an increase in transaction volume may not directly translate into improved profits. Sophisticated profit-and-loss management is required, taking into account the actual reward rate, coupon usage rate, and content partnership costs.
Another industry insider said, "Memberships are not just benefit products, but mechanisms for accumulating customer data over the long term," adding, "From the platform's perspective, they can dramatically improve marketing efficiency because they make it possible to precisely analyze the purchase cycles of subscribed customers and the paths by which they expand into new categories."
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