Major Korean delivery application operators are breaking new ground with “quick commerce” services promising delivery within 30 minutes to an hour as the delivery market stagnates.

According to the retail industry on Thursday, delivery platform Yogiyo reported a substantial 260 percent growth in its corner-store quick-commerce service sales since its launch in January 2023. Its supermarket quick-commerce service, introduced in May 2022, saw a cumulative 58 percent growth in sales.

Yogiyo’s quick commerce offerings allow customers to select products from GS Retail Co.’s GS25 and GS The Fresh lines that range from fresh food to household essentials and small home appliances, delivered promptly to their doorstep.

By leveraging its delivery expertise and GS Retail’s network, Yogiyo’s quick commerce services are seeing significant growth despite a recent decline in monthly active users.

Yogiyo has also been facing competition from Coupang Eats, which threatens its position as the second-largest delivery app in the market. According to mobile market tracker Mobile Index Insight, Yogiyo’s market share in the delivery app market decreased to 24 percent in January 2024 from 29 percent the year before, while Coupang Eats narrowed the gap by increasing its market share to 21 percent from 14 percent.

Against this backdrop, Yogiyo reduced the subscription fee for its membership service to 4,900 won per month in 2023, allowing customers to enjoy free food delivery. The company also plans to expand free delivery benefits, including its quick commerce services, for paid subscribers.

“Quick commerce accompanies significant costs such as logistics center rent, operating expenses, and labor costs, but we have been able to reduce costs by leveraging GS Retail’s network,” a Yogiyo official said.

Woowa Brothers Corp.’s delivery app, Baedal Minjok, commonly referred to as Baemin, is also increasing the number of partner stores as well as broadening product categories from food and necessities, previously offered through its B Mart, to fashion, beauty, and digital products. B Mart, which saw an annual growth rate averaging 280 percent from 2020 to 2022, operates over 70 micro fulfillment centers (MFCs) nationwide as of 2023.

“The demand for our quick commerce service is continuously increasing among early adopters who want to try new electronic products such as game consoles and smartphones quickly,” a Baemin official explained.

The company also managed to achieve cost efficiency thanks to the integrated management of its key logistics centers to quickly access supplies and its own logistics bases for large storage spaces.

The transaction volume of Baemin Store, an open market with over 300 individual sellers, tripled in the first half of 2023. Local small business owners in particular, who mainly operated offline stores previously, are using Baemin Store as a sales channel and thus contributing to mutual growth.

The quick commerce service market, expected to exceed 5 trillion won by 2025, is attracting online and offline retailers alongside delivery platform operators. Kurly Inc., the operator of e-commerce platform Market Kurly, partnered with delivery app Vroong for its first MFC in southern Seoul and GS Retail provides immediate delivery services through its neighborhood-based app in addition to its collaboration with Yogiyo.

By Kim Geum-yi and Chang Iou-chung

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]