CJ, Shinsegae form logistics partnership to fight Coupang’s expansion

CJ Logistics’ delivery truck is parked at a terminal in Seoul, in this file photo taken on Jan. 26, 2023. Yonhap

By Lee Min-hyung

Shinsegae Group’s e-commerce affiliates, Gmarket and Auction, have teamed up with CJ Logistics to secure their foothold against the rapidly expanding Coupang, which is consolidating its online shopping leadership with its ultra-fast Rocket Delivery service.

The two online shopping platforms said Monday that Gmarket launched Star Delivery, under which the logistics firm offers a guaranteed delivery service.

Star Delivery guarantees customers that if they make payment before 8 p.m., they will receive their orders a day after their purchase. If the products are not delivered as promised, Gmarket will redeem the customers with points.

The move is seen as part of their efforts to curb the expanding influence of Coupang, whose presence continues to grow with its flagship delivery service.

According to data from market tracker Wiseapp-Retail-Goods, Coupang’s monthly active users (MAU) reached 31.83 million in August, up 0.5 percent from a month earlier.

This proves customers remain loyal to the nation’s most-influential e-commerce firm, even after the company pushed for a monthly membership fee hike of more than 58 percent to 7,890 won on Aug. 7.

The MAUs for Auction and Gmarket also increased slightly during the same period, but the combined number of users for the two platforms reached 8.07 million, far short of that of Coupang.

The launch of Star Delivery is the second of its kind among Korean online open market platforms. Earlier, Naver also partnered with CJ Logistics to offer a similar fast delivery service.

Gmarket is set to launch its test service for some 150,000 products in 14 categories including daily necessities, beauty products and digital devices and gradually widen the coverage areas.

“We will rapidly (expand the array of) items for the new delivery service,” a Gmarket official said. “Our core strengths in price competitiveness and product diversity will generate synergies with the (guaranteed) delivery service.”

CJ Logistics, for its part, is also facing fierce logistics competition against Coupang. As of August 2023, Coupang’s logistics arm, Coupang Logistics Service, held 24.1 percent of Korea’s parcel delivery market. This is a rapid increase compared with the 12.7 percent reported as of the end of 2022.

CJ Logistics maintains its leadership, but faces a growing threat from the logistics arm of Coupang.

An industry official said the partnership comes with significance, as both Shinsegae and CJ face growing threats from Coupang.

“The presence of the conventional e-commerce and logistics players are being threatened by the rapid rise of Coupang, whose influence remains robust even after its membership fee hike,” an official from an e-commerce firm said. “Both Shinsegae and CJ will be able to defend themselves against the toughening competition by deepening their partnership.”