SEOUL — Amid an ongoing turf war among South Korean online shopping malls that try to become the top fast delivery service operator, LotteON, the online shopping mall wing of South Korean conglomerate Lotte Group, will take a different and bold approach by discontinuing its overnight delivery service. Instead, the company will focus on instant delivery services that deliver products within two hours of order.
South Korea’s online shopping market which is projected to stand at 224 trillion ($180 billion) won in 2022 is a fierce battleground for operators who provide quick delivery services such as overnight, one-day delivery, and instant delivery services that take less than a day to deliver products ordered through online malls. The online shopping market saw explosive growth in 2020 and 2021 when people chose to shop online instead of visiting crowded places to avoid coronavirus infection.
Companies such as Coupang, the South Korean counterpart of Amazon, and SSG.com, the online shopping wing of retail giant Shinsegae Group, operate fulfillment centers, which are urban-type logistics hubs, to accelerate the flow of their logistics chain and provide last-mile services. Coupang is the favorite of young workers and mothers for its overnight delivery service for groceries and other everyday necessities. SSG.com uses stores of Emart, Shinsegae’s hypermart wing, to directly deliver products through an instant delivery service.
LotteON said that the company will discontinue its overnight delivery service on April 18. The shopping mall operator will receive its final overnight grocery delivery orders on the day before the service is shut down. LotteON said that the company decided to discontinue the overnight service to focus on its two-hour grocery delivery service. The instant service delivers products from a nearby Lottemart, a mega mart franchise operated by Lotte.
“We have decided to focus on the two-hour instant delivery service to effectively utilize limited manpower and resources,” an unnamed LotteON official said in a statement.
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