Lotte Super, the only major South Korean supermarket chain that had not offered on-demand delivery, is entering the quick commerce market through a tie-up with Coupang Eats. The company concluded that instant delivery has become essential in the short-distance grocery market. With Lotte Super and its rivals all strengthening quick commerce at the same time, competition to capture nearby grocery demand is set to intensify.
Lotte Super said it will begin quick commerce service at about 170 stores nationwide starting on the 7th. Customers place orders through the Coupang Eats app, and Lotte Super employees pick the items in the store and hand them to a delivery driver. The company is targeting delivery within one hour of an order. Service hours run from 10 a.m. to 10 p.m.
About 3,000 items are available, including fresh food, processed food and household goods. Deli products such as fried chicken, gimbap and sandwiches are also on the list. The minimum order was set at 15,000 won, targeting one- and two-person households that frequently buy in small quantities. Unlike the planned bulk shopping that hypermarkets are built around, the aim is to capture demand for buying items as they are needed. Lotte Super said it judged that partnering with an outside platform with operating experience was more efficient than building its own delivery infrastructure.
It is Lotte Super's first return to quick commerce in about three years and seven months. The chain tried on-demand delivery in December 2021 through Happy Butler, then operated by SPC, now Sangmidang Holdings, and shut the service down in February 2023. Lotte Super afterward focused on closing and renovating underperforming stores and moved cautiously on new services.
The decision to reopen the service at more than half of its 311 stores reflects the emergence of instant delivery as the decisive battleground for grocery demand. According to the Ministry of Trade, Industry and Energy, sales at supermarket chains have fallen from a year earlier for eight straight months since December. Quick commerce sales tallied by individual companies, by contrast, are growing rapidly. First-half quick commerce sales rose 41.9% at GS The Fresh and 52.2% at E-Mart Everyday from a year earlier. At Homeplus Express, short-distance instant delivery sales for the four weeks from the 1st to the 28th of last month jumped 192% compared with the four weeks before its acquisition of NS Home Shopping, from May 24 to June 22.
The push by e-commerce companies such as Coupang and Kurly into the grocery market with early-morning delivery is also cited as a reason for adopting quick commerce. Data on major retailers' sales in July released by the Ministry of Trade, Industry and Energy showed food sales at offline retailers fell 2.6% from a year earlier, while food sales at online retailers rose 10.4%. Store-based retailers worry that failing to absorb instant delivery demand by using their nearby store networks as bases will accelerate the shift of food demand online. An industry official said quick commerce allows immediate sales growth using stores across the country as bases, adding that Lotte Super moved in before it was too late, having already confirmed that competitors are growing steadily.
Earlier entrants are already reworking their product lineups and operating structures around quick commerce. GS The Fresh offers the service on six platforms, including its own app Woori Dongne GS as well as Baemin, Coupang Eats, Yogiyo and NAVER grocery shopping. Combined monthly active users on those platforms reach about 45 million. GS The Fresh posted a 41.9% rise in first-half quick commerce sales, and quick commerce accounted for 9.9% of second-quarter sales, a record high.
Fresh food made up 45% of GS The Fresh's first-half quick commerce sales. The company said items bought just before preparing a meal, such as pork belly, eggs, strawberries and salmon, fit well with instant delivery. That also means quick commerce is helping capture demand in the short-distance grocery market. GS The Fresh is accordingly expanding small-package agricultural, livestock and fishery products suited to quick commerce.
E-Mart Everyday, which has run quick commerce since 2022, handles up to about 7,000 items on five platforms, including its own online mall e-mile as well as Baemin, Coupang Eats, NAVER grocery shopping and Yogiyo. It has widened its core trading area from about a 500-meter radius around each store to as much as 4 kilometers, aiming to use stores as neighborhood grocery hubs. It plans to sharply strengthen fresh food and strategically expand E-Mart private brands such as 5K Price and Peacock.
A E-Mart Everyday official said quick commerce is a new growth driver that expands the trading area of existing stores and secures new customers and sales, adding that the company will actively consider services that expand synergy between online and offline channels in line with rapidly changing customer demand.
Lotte Super said it will expand the service based on operating results and customer response. Lee Kyu-hwan, head of the quick commerce operation team at Lotte Mart and Lotte Super, said he expects the combination of Lotte Super's nearby store network and Coupang Eats' delivery infrastructure to offer customers a more convenient grocery shopping experience, adding that the company plans to run the service stably while closely watching results and customer feedback.
