SSG.com suspends dawn delivery service in non-greater Seoul metro areas

SSG.com delivery trucks [Source : SSG.com]

SSG.com, one of South Korea’s top three dawn delivery service providers, has decided to suspend its overnight delivery service in the regions outside the country’s capital Seoul and surrounding metropolitan areas to prop up its profitability amid lingering concerns over the economy.

SSG.com, an online grocery and shopping mall under Shinsegae Group, said Sunday that it will discontinue providing its dawn delivery service in Chungcheong province starting next year.

Dawn delivery service ensures delivery of orders placed online by midnight to arrive at doorsteps by 6 a.m. the next day. It has become so popular in Korea that many local e-commerce giants have jumped into the market to meet growing demand.

SSG.Com will continue providing dawn delivery service for customers in Seoul and surrounding areas, while allowing its customers outside the metropolitan Seoul area to use its same-day delivery service that delivers orders placed before noon by evening on the same day.

The latest decision is part of its efforts to save costs. It generally costs twice more for the company to provide dawn delivery service than regular delivery service because dawn delivery orders are mostly comprised of fresh food that costs more to manage, such as extra expenses from food waste and ice packs for keeping deliveries fresh.

However, Kurly, the operator of the country’s overnight grocery delivery service pioneer Market Kurly, is aggressively expanding its logistics network.

It is building new logistics centers in Pyeongtaek, Gyeonggi Province and Changwon, South Gyeongsang Province. It also plans to set up a logistics center near Busan, the second largest city in South Korea, with a plan to expand dawn delivery items and service areas in the region.

The country’s No. 1 e-commerce platform Coupang is also not deterred by the economic slump from making aggressive investments. It is ramping up distribution and fulfillment centers across the nation despite piling losses.

Coupang invested 1.25 trillion won ($965.5 million) in building more logistics centers over the last two years.

The e-commerce giant currently runs over 100 logistics centers across Korea.