June 26, 2019

Coupang’s delivery innovation leads Korea’s online biz market

Korea Herald

South Korea’s delivery service has evolved to allow customers to expect next-day arrival of their ordered items, or even receive parcels in just a few hours. 

At the center of such delivery innovation stands Coupang, an e-commerce company which rolled out a Rocket Delivery service in 2014. Rocket Delivery guarantees next-day delivery of ordered goods when a customer places an order by 12 a.m. 

Taking the retail business and e-commerce industry by storm, Coupang’s sales skyrocketed from 34 billion won in 2014 to 4.4 trillion won as of last year, making a 16-fold jump in five years.

Coupang attributes its success of delivery innovation to the establishment of its logistics infrastructure. It has also set up a system called Random Stow, an organization system that stores items in the most efficient order based on algorithm technology. 

The size of Coupang’s logistic center amounts to the combined size of 167 soccer fields, where some 5.2 million types of products are stored. On a daily basis, some 1.7 million products are sent out from the logistic centers via Rocket Delivery. 

Coupang’s keyword search team is also behind the innovative customer experience. The teams helps customers to find the best possible items, by using various algorithm which find similar items but eliminate overlapping ones at a same time.

The team also allows the customers to only see the best search results by automatically sorting out some 130 million types of products based on price, delivery time, delivery fee, customer review and more. 

“Only this kind of technology can transform customer experience, and this is the reason why we are hiring some 1,000 developers globally,” said a Coupang official. 

Some of Coupang’s other innovations include Rocket Fresh, a delivery service that sends organic food products to consumers within hours after purchase.

In October last year, it also launched a subscription service called Rocket Wow club, which offers free delivery of items by 7 a.m. on the next day morning, for members only. Products can be returned anytime within 30 days after purchase, free of charge. When members order in the morning, items can be delivered by evening as well. After a membership trial period expires, one can join the membership with a monthly charge of 2,900 won. 

According to Coupang, a week after the service was launched, at least 150,000 customers signed up for membership. As of March, some 1.7 million members have been using the service.