11Street, Shinsegae partner to broaden early-morning delivery, diversify items

Online marketplace 11Street run by South Korean mobile carrier SK Telecom Co. which has brought Amazon onboard will leverage on fresh food delivery service of retail giant Shinsegae Group for a bigger push into the explosive e-commerce market.

11Street said Monday that it will begin the dawn delivery service through Shinsegae Group’s online shopping platform SSG.com. Its dawn delivery service will allow orders placed by midnight at 11Street’s online mall for delivery by 6 a.m. the next day by choosing the “SSG dawn delivery” option, said the company.

The addition allows 11Street to join the superfast or early morning fresh food delivery service race without making hefty facility investments. The two companies’ collaboration also is expected to benefit SSG.com that has been seeking to expand merchandise items and user base ahead of adopting the open market platform, which allows third-party online shop owners to run a store at the online mall. SSG.com currently carries 10 million items, up by 3 million from a year earlier, but it still falls far behind of the country’s leading e-commerce Coupang, offering 150 million items.

The tie-up between 11Street and SSG.com is the perfect complement for each other to win a race in the fast-growing e-commerce market, said Kim Joon-seop, a KB Securities analyst.

[Photo provided by SSG.com]

The competition in the local e-commerce market is heating up fast on ever-growing demand for early delivery of fresh food. The dawn delivery service that online grocer startup Market Kurly pioneered in 2015 has grown rapidly after Coupang, the country’s largest e-commerce platform, jumped into with aggressive investments that have caused the company near $1 billion annual losses.

Traditional retail majors and other e-commerce firms have been quick to follow suit of Coupang to offer the early morning grocery delivery service.

GS Retail and internet giant Naver are offering the dawn grocery delivery service through a partnership. Gmarket and Auction, operated by eBay Korea, have added offline grocery store chains including Lotte Super and Homeplus to their platforms for online grocery shopping service.

Market experts expect that the 11Street and SSG.com partnership would be made beyond early morning delivery services. Their partnership is expected to help them build big data solutions for logistics and distribution sectors.

“Although the companies still would need to pass the regulatory hurdle, such partnership could lead to creating a customized online shopping service like such offered by China’s Alibaba,” said Ahn Ji-young, an IBK Securities analyst, referring to SK Telecom’s latest partnership with Amazon.

In November, SK Telecom and Amazon entered into a partnership agreement, which includes the multinational e-commerce giant taking up a 30 percent stake in 11Street and distributing its products through the Korean online platform.

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