The Rise of Online Grocery Delivery in South Korea: Market Trends and Key Players
The Rise of Online Grocery Delivery in South Korea: Market Trends and Key Players
South Korea's online grocery delivery market has experienced significant growth in recent years, particularly accelerated by the COVID-19 pandemic. This article explores the current state of online grocery delivery services in Korea, highlighting key players, market trends, and consumer behavior.
Market Overview
The online grocery delivery market in South Korea has expanded rapidly, with the dawn delivery market alone growing from 800 billion won in 2019 to 2.5 trillion won in 2020. Projections suggest that this market could reach 4 trillion won in 2021. This growth is driven by changing consumer habits and the convenience offered by these services.
Key Players
Several major companies dominate the online grocery delivery landscape in South Korea:
| Company | Features | Market Position |
|---|---|---|
| Market Kurly | Pioneered dawn delivery, focuses on premium products | Market leader |
| SSG.com | Backed by retail giant Shinsegae, offers wide product range | Strong competitor |
| Coupang Fresh | Part of e-commerce giant Coupang, known for fast delivery | Growing rapidly |
| Homeplus | Traditional retailer with strong online presence | Established player |
| Emart | Another traditional retailer adapting to online market | Significant market share |
| Hello Nature | BGF's subsidiary, showing strong growth | Emerging player |
| Oasis Market | Specialized in fresh produce | Niche player |
Dawn Delivery Revolution
Market Kurly introduced the concept of dawn delivery four years ago, promising delivery by 7 AM for orders placed before 11 PM the previous night. This innovation has transformed the market, allowing consumers to receive fresh products without visiting physical stores. Other players quickly followed suit, leading to fierce competition in this space.
Changing Consumer Behavior
The pandemic has significantly altered consumer behavior:
- Increased preference for home-cooked meals
- Growing demand for Restaurant Meal Replacement (RMR) options
- Shift from offline to online shopping for groceries
- Expansion of delivery services beyond traditional items like chicken to include a wide range of cuisines
Market Growth and Competition
The online grocery market has seen remarkable growth:
- Market Kurly's sales increased from 17.3 billion won in 2016 to 953.1 billion won in 2020, a growth of about 5500%
- SSG.com's RMR sales grew 20 times in 2020 compared to the previous year
- Emerging players like Hello Nature, Hyundai Department Store's To Home, and Oasis Market are showing strong growth rates, intensifying competition
Food Delivery Apps
Food delivery apps have become a crucial part of the online food ecosystem:
- The food service sector, including delivery, saw a 62.6% increase in sales in April 2021 compared to the previous year
- Food delivery services now constitute the largest portion of online shopping sales
- Korean cuisine has gained popularity in delivery, now ranking second after burgers and surpassing chicken
Future Outlook
As the pandemic situation evolves, several trends are expected to continue:
- Sustained growth in online grocery shopping and food delivery
- Increased focus on sustainability in food consumption
- Further expansion of dawn delivery services
- Continued innovation in delivery methods and product offerings
The online grocery delivery market in South Korea has transformed rapidly, reshaping how consumers shop for food and groceries. As competition intensifies and technology advances, this sector is poised for continued growth and innovation in the coming years.