E-commerce surge drives sharp growth in Korea's delivery industry

By Candice Kim Posted : October 16, 2024, 11:44 Updated : October 16, 2024, 11:46
This undated file photo shows workers sorting parcels at a postal logistics center in Seoul. AJP
SEOUL, October 16 (AJP) - South Korea's parcel delivery industry has seen a 52.9 percent increase in volume over the past three years, with the average person receiving more than 100 packages annually in 2023, according to a report released Wednesday by the Korea Chamber of Commerce and Industry.

The report attributes this growth to "4C" factors: China-commerce, Competition, Consumer benefit and Cost down. 

The influx of ultra-low-priced products from Chinese e-commerce platforms like Ali and Temu has intensified competition, spurring domestic logistics companies to improve their services.
Fierce market competition has led to expanded fulfillment services and faster delivery options, including same-day delivery. 

E-commerce companies' membership programs, offering benefits such as free shipping and returns, have further boosted parcel volumes, the report said. 
 
This photo shows a woman receiving a package. Getty Images Bank

Korea's parcel delivery industry has also benefited from continuous investments in infrastructure and technology. 

Companies have integrated scattered logistics facilities and implemented advanced technologies like AI and logistics robots, increasing efficiency and reducing costs.

"Domestic consumers have been able to enjoy faster and more convenient services due to the rapid growth of e-commerce and fierce competition in the delivery market,” Jang Geun-moo, head of the Distribution and Logistics Promotion Institute at the Korea Chamber of Commerce and Industry, said.

“However, as side effects such as disposable containers and excessive packaging are becoming problematic due to increased volume, there is a need for increased interest from the government and companies in spreading circular business models such as recycling and reuse, as well as eco-friendly packaging,” he added.