Convenience stores are the new post office as discount deliveries take off

Industry

Published: 11 May. 2023, 19:18

Convenience stores are the new post office as discount deliveries take off

A customer sends a parcel using CU's half-priced delivery service. CU on Thursday announced a special promotion starting Monday, allowing customers to send parcels for as low as 800 won ($0.6). [BGF RETAIL]

As the cost of living continues to rise and delivery prices soar, consumers are faced with a choice: Opt for the convenience of doorstep delivery or embrace the slight inconvenience of picking up orders from nearby convenience stores for a significantly lower cost.

An increasing number of individuals are opting for the latter.

Convenience store chains like GS25 and CU in Korea have been offering their own discounted, or "half-priced," delivery services. Customers can send and receive packages at a branch of the same chain, and while the delivery timeframe may be extended by one to two days, it allows them to save up to 40 percent compared to conventional courier fees.

GS25, the convenience store chain that pioneered the discount delivery service, has experienced a significant surge in its number of parcel deliveries. Since its introduction in 2019, with 90,000 deliveries, the volume of parcels sent through the service exceeded 10 million last year.

For CU, on the other hand, the share of its discount delivery service in the overall parcel delivery volume has risen from 1.8 percent in 2020, the service's first year, to 21.3 percent from January to April this year. Recently, there has been a remarkable surge in deliveries, with April experiencing a staggering 27.9-fold increase compared to the same month in the service's first year.

"The market for delivery services between convenience store branches has been seeing substantial growth in recent years," Park Hee-jin, the team head of the service platform at BGF Retail, the operator of the convenience store chain CU, said. "This growth can be attributed to the growing demand for small parcel deliveries, driven by the thriving market for used goods and the increasing popularity of online shopping."

Amid soaring inflation, convenience store operators are expanding their competitive strategies to include parcel delivery services with lower prices.

To further incentivize customers, CU on Thursday announced discounts would be available on their discount delivery service through its mobile membership application. By offering daily coupons, customers receive up to a 55 percent discount on the store's delivery service, with small parcels weighing 500 grams or less costing only 800 won ($0.6).

Moreover, CU plans to provide coupons for its discount delivery service to Naver Student Membership holders and users of the Toss app throughout the month.

Earlier, GS Retail, operator of the GS25 chain, announced that it would offer discounts on its discount delivery service for the entire month of May. Through their application, customers can apply for the service and receive a flat rate of 1,800 won for packages weighing up to 5 kilograms (11 pounds), or up to 31 percent off the regular price.

"An increasing number of customers are looking to make smart consumption choices in the face of high inflation, such as taking advantage of discounts," Kim Kyung-jin, the head of GS Retail's quick commerce business division, said.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]