ajunews Thursday,22 February 2024

Coupang's food sales in 1Q 2023 increase by 20% on-year: market data

By Park Sae-jin Posted : June 16, 2023, 14:24 Updated : June 16, 2023, 14:24

[Courtesy of Coupang]

SEOUL -- Coupang, the South Korean counterpart of Amazon, saw its food sales grow by more than 300 percent compared to the growth of other online and offline food sales. The secret behind Coupang's success in online food sales is the cooperation between the online shopping giant and food companies in which they take different roles so that they can focus on the things they do best.
 
The online shopping giant garnered explosive popularity among working people, housewives, and parents with young children during the COVID-19 pandemic through the company's overnight and one-day grocery delivery services. When a customer orders fresh groceries through the overnight delivery service, he or she can have the goods delivered early in the morning.
 
Coupang operates some 100 fulfillment centers, which are small-sized logistics warehouses with refrigerating facilities for fresh and frozen food, for its quick-delivery services in major cities including Seoul and the southern port city of Busan. The shopping giant started the demonstration of an automated fulfillment center in Daegu some 240 kilometers (149 miles) south of Seoul to test the efficacy of robot-based logistics systems. At the Daegu center, robots busily move around to carry product packets and boxes in the sorting center to speed up the delivery preparation process.  
 
Coupang said that the company recorded food sales of about $5.8 billion in the first quarter of 2023, up 20 percent compared to the same period a year ago. The company focused on delivery and customer service so that food makers can only focus on production and quality control. The online shopping giant described the symbiotic relationship with food companies as a "win-win relationship" that creates a virtuous cycle of production and distribution.
 
According to South Korea's state statistical information service, the overall online food service saw a sales increase of six percent in 1Q 2023 while the retail industry's sales increased by 4 percent compared to the same period in 2022.

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