Delivery market continues to grow, but drivers can't keep up

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Delivery market continues to grow, but drivers can't keep up

Office workers carry delivery food in Myeong-dong, central Seoul, on Aug. 31. [NEWS1]

Office workers carry delivery food in Myeong-dong, central Seoul, on Aug. 31. [NEWS1]

 
A growing number of companies are rolling out delivery services to reach a wider range of customers that continue to avoid crowded locations as the coronavirus pandemic continues.

 
A month after Hyundai Department Store started delivering fresh produce and processed food, Lotte Department Store also decided to enter the market.
 
Lotte Shopping confirmed Wednesday that it will start delivering fresh produce and cooked meals from the food court in its Gangnam branch in southern Seoul later this month.
 
The trial service will run for three months before Lotte Shopping decides to expand the service to other branches.
 
Lotte Shopping partnered with the operator of personal delivery app Kimzipsa to create the new service.
 
Shinsegae Food’s No Brand burger franchise also announced Wednesday that it has started offering its food for delivery after the number of takeout orders jumped up from 42 percent in July to 58 percent in August.

 
“As Covid-19 prolongs, contactless services, including takeout and delivery, have become a must in the food service business,” said a spokesperson for Shinsegae Food.
 
Companies that were already providing delivery services saw their sales rise in recent weeks, especially after the government imposed stricter regulations on restaurants and cafes starting Sunday to curb virus cases.
 
Food delivery platform Baedal Minjok, or Baemin, said the number of orders from Aug. 29 through Aug. 31 increased 9 percent compared to the previous week. Cafe orders, including dessert and coffee, jumped up 25.9 percent.
 
Stricter regulations include restricting coffee chains to only provide takeout or delivery services throughout the day.
 
Health and beauty store franchise CJ Olive Young reported similar results on Wednesday.
 
Since the initiation of Level 2 social distancing on Aug. 16, the number of orders placed for its on-day delivery service shot up 101 percent compared to March 22 through April 19, when the importance of social distancing started to become more serious, according to CJ Olive Young.
 
On-day delivery means products are delivered within three hours.
 
“The targets of panic buying have gone beyond daily necessities to cosmetics products,” said the health and beauty franchise in a statement.
 
Sheet mask packs, spot patches and eyeliners were among the top-selling products, along with Korea Filter Anti-Droplet masks.
 
Higher demand for delivery services naturally boosted the demand for delivery riders.
 
Logiall, which handles more than 10 million orders per month, recently raised the commission fee imposed on restaurant operators, citing a lack of delivery riders due to Covid-19.
 
Its Uijeongbu branch in Gyeonggi raised the basic commission fee per delivery by 16.67 percent from 3,000 won ($2.50) to 3,500 won. Its branch in Songpa District, southern Seoul, raised the fee 12.5 percent from 4,000 won to 4,500 won.
 
“Due to the monsoon season and the spread of Covid-19, the number of orders spiked and riders’ sick leave rate went up,” Logiall’s delivery platform said in a statement ahead of the implementation of heightened social distancing measures.
 
Baemin and its rival Yogiyo recently offered incentives to delivery drivers.  
 
Baemin handed out 1 million won to its new riders last month, while Yogiyo Express, an AI-based delivery dispatching system, is offering 2 million won to certain riders who complete challenges set by the company.
 
BY JIN MIN-JI   [jin.minji@joongang.co.kr]

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