Coupang, Shinsegae reinforce logistics to take on AliExpress
Coupang and Shinsegae Group are moving to reinforce their logistics capabilities in response to escalating competition from AliExpress, according to industry officials, Sunday.
This is widely seen by market insiders as a preemptive step by Korea’s retail giants to bolster their fulfillment competitiveness.
Last week, the Chinese e-commerce firm submitted its plan to execute investments worth $200 million (266.4 billion won) here this year alone for the establishment of a logistics facility. This is part of a three-year investment project pushed by its mother firm, Alibaba Group, which will inject $1.1 billion into Korea over the next three years.
In response, Coupang posted a job ad to hire 80 people for the automation division of its logistics arm, Coupang Fulfillment Services, the largest ever in the firm’s history for the unit.
Shinsegae Group’s e-commerce arm, SSG.com, is also moving to open its state-of-the-art logistics center in the fourth quarter of this year in Gwangju, Gyeonggi Province. The facility features a cold chain and up-to-date automation equipment, according to the company.
Choi Hoon-hak, head of sales division at SSG.com, displayed Friday its vision to quadruple its growth
“AliExpress will be able to tap deeper into fresh food delivery services by opening its planned logistics center possibly in Seoul’s surrounding cities. ”
in terms of the number of items for its 1 Day Delivery service this year from the previous year. This will be powered by the new logistics center, which is expected to process daily orders of more than 200,000, according to the company.
“AliExpress is on track to make up for its weakness by throwing challenges with its mega investment plan here,” an official from a retail firm said. “One of the biggest weaknesses the firm has faced has been the absence of its logistics centers, but the company intensifies rivalry against local counterparts by displaying gestures for faster delivery services with plans to build diverse logistics centers nationwide.”
The company also put up job ads in major subway stations here. According to the recruitment drive — running until May 13 — AliExpress will hire employees in diverse areas such as branding, payment marketing and customer services.
Another official from the retail industry said AliExpress’s expansion into the logistics sector here is aimed at diversifying its business areas into the fresh food delivery sector.
“AliExpress will be able to tap deeper into fresh food delivery services by opening its planned logistics center possibly in Seoul’s surrounding cities, which will allow the company to overcome its biggest downside: slow delivery,” the official said.
The government is stepping up measures to include the Chinese players under local regulations amid complaints from Korean firms.
But the Chinese platforms show little sign of being daunted. Rather, they have been responding with agile countermeasures. AliExpress pledged a 90-day, 100 percent refund policy for any foreign direct purchases made through its platform. This came a day after the Fair Trade Commission and a group of relevant government authorities issued toughened regulatory guidelines so as to include the Chinese firms.