[Courtesy of CJ Olive Young]
A micro-fulfillment center (MFC) is a small-sized logistics center that is optimized for urban environments. While an ordinary package distribution center requires a large land area for storage and a loading bay for trucks, an MFC only requires a small piece of land for a tiny warehouse. Parcels are distributed from an MFC by small trucks or motorbikes. South Korea's top food and grocery delivery service Baedal Minjok operates some 40 MFCs in Seoul and its satellite cities to provide a quick commerce service that delivers groceries in less than an hour.
The quick commerce service market includes various fast delivery services such as an on-demand instant delivery service that delivers groceries and other products as soon as an order is made, and an overnight delivery service that delivers parcels during the night so customers can pick up items in the morning. The demand for quick commerce service has increased greatly in South Korea since 2020 when the first wave of a coronavirus pandemic hit the country. The quick commerce market, excluding sales of food deliveries, stood at about 300 billion won ($241 million) in 2021.
CJ Olive Young said in a statement on March 16 that the company will open six more MFCs in Seoul and the southeastern satellite city of Seongnam to accelerate the popularization of Olive Young's on-demand quick delivery service and one-day delivery service for beauty products. About 85 percent of items sold through Olive Young's online store will be available through MFC-based delivery services.
The beauty product store wing of CJ Group started the operation of two MFCs in Seoul in 2018. It took about 45 minutes per delivery and about 38 percent of orders made through the company's online store were on-demand quick delivery orders.
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