South Korean food companies are putting efforts into expanding their own shopping mall services in order to reduce reliance on e-commerce platforms and improve profitability to attract an increasing number of consumers trying to enjoy their various discounts and faster delivery service.

Leveraging the advantages of direct-to-consumer (D2C) sales, which deliver products directly from the factory to the dining table, companies are not only providing fresh products within five days of production but also expanding their next-day and early morning delivery services.

According to sources from the food industry on Thursday, Pulmuone Co., a leading food company in the country, saw a 67 percent increase in the number of customers who made purchases at its online shopping mall, #Pulmuone, compared with the previous year. Its sales also increased by 32 percent during the same period.

Lotte Wellfood Co., which introduced a subscription service for the first time in the confectionery industry in 2020, also saw a 70 percent increase in sales on its online shopping mall, Sweet Mall, from January to May this year compared with the same period last year. “The number of consumers using our mall has increased significantly as we offer products that are sold exclusively on our mall, such as products for our regular subscription service and Zero Special Set, a collection of zero sugar products,” said a Lotte Wellfood official.

Since introducing an early morning delivery service to its own mall in 2019, Pulmuone has been expanding its service areas. Currently, if an order is placed before 7 p.m. in Seoul, Gyeonggi Province, Incheon, or South Chungcheong Province, it will be delivered by 7 a.m. the next day. The actual delivery is handled by Tfresh, a company specializing in early morning delivery. Pulmuone’s early morning delivery service was able to settle in the market because its factories and logistics centers manage inventory based on production and sales data.

“Early morning delivery service usually costs several thousand won per box, but based on our years of experience, we were able to reduce operating costs by charging delivery fees per delivery,” said an official from Pulmuone. Pulmuone is the only food manufacturer in the country that offers early morning delivery service.

Earlier, CJ CheilJedang Corp. provided early morning delivery service in certain areas of the Seoul metropolitan area and Chungcheong region through its meal kit brand Cookit, but ended the service in March. Meal kit company Freshage also operated its early morning delivery service, but discontinued it in July last year. GS Retail Co.’s GS Fresh Mall followed suit around the same time.

CJ runs a next-day delivery service through its official mall, CJ the Market. If an order is placed by midnight, it will be delivered the next day. The number of customers using the mall is steadily increasing due to its special events. According to the company, CJ the Market saw its sales increase by approximately 20 percent from the previous year. Earlier this month, the mall launched a “Bibigo Directly Produced Kimchi” service where customers receive packaged kimchi within five days of production.

Korea’s leading agri-food company Harim Group also started its D2C overseas delivery service in September last year through its ready-made meal brand The Misik.

By Song Kyung-eun and Yoon Yeon-hae

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]