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The South Korean courier, express, and parcel (CEP) market is expected to record a CAGR of over 10% during the forecast period 2022-2027.
As a result of the COVID-19 pandemic, distribution infrastructure was expanded across the country outside Seoul and metropolitan centers. The retail industry has stepped up to strengthen the same-day delivery system. As non-face-to-face consumption became commonplace due to the COVID-19 pandemic, an immediate delivery system was introduced, and omnichannel started becoming consolidated.
Even though the Korean e-commerce market was ranked fourth in the world in 2020, its share of the total retail market, including online and offline sales, was 35.8%, placing it first. The number of online market transactions exceeded USD 131.8 billion in 2020 and USD 155 billion in 2021.
In 2021, online shoppers in South Korea spent USD 20.4 billion on food and beverages, USD 13.8 billion on clothing, and USD 13.6 billion on household goods.
The leader among online shopping properties active as of September 2021 is Coupang. Their fast next-day delivery service is one of their most prized services. Coupang defeated G-market, an eBay-owned website, after months of increasing market share.
Scope of the Report
Courier, express, and parcel (CEP) refer to the collection of services that involves the delivery of various goods and products through different mediums such as air, water, and land across regions. These packages delivered by CEP are mainly non-palletized and weigh around a hundred pounds collectively. The South Korean domestic courier, express, and parcel market is segmented by business model (business-to-business (B2B), business-to-customer (B2C), and customer-to-customer (C2C)), type (e-commerce and non e-commerce), and end user (service, wholesale and retail trade, healthcare, industrial manufacturing, and other end users). The report offers size and forecasts for the South Korean domestic courier, express, and parcel market in value (USD billion) for all the above segments. The impact of the COVID-19 pandemic is also covered in the report.
|By Business Model|
|By End User|
|Wholesale and Retail Trade|
|Other End Users|
Key Market Trends
Increase in Parcel Volumes Fueling CEP Market’s Growth
According to data from the Ministry of Land, Infrastructure, and Transport, parcel volume in South Korea increased 21% in 2020 as more people shifted to online shopping owing to the COVID-19 pandemic. A total of 3.37 billion parcels were delivered in the country by 18 logistics companies in 2020, surpassing 3 billion for the first time.
In 2020, the shipping trend was non-face-to-face delivery, in which customers requested that the delivery driver "leave it at the door" so that they do not meet and increased by more than 11 times.
The transactions of online shopping jumped 19.1% year-on-year to USD 144.4 billion in 2020, marking a record high since the data started being compiled by Statistics Korea in 2001.
Mesh Korea, which manages the logistics brand VROONG, reported in April 2021 that the delivery pattern of domestic consumers had changed dramatically as a result of the COVID-19 pandemic. Non-face-to-face delivery to the door and evening delivery after 1900 hours have increased, according to an industry report, and delivery sectors such as health, beauty, and clothes have varied. In comparison to 2020, the total number of orders and the number of delivery drivers both increased significantly in 2021.
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Growth In E-commerce Driving the CEP Market
South Korea has been drawing the attention of the global e-commerce industry in terms of growth rate and size compared to the overall consumer market since before the COVID-19 pandemic. The ratio of online shopping purchases by domestic consumers was 27% in 2019 and increased to 34% in 2020, the highest in the world. This was higher than the United Kingdom (28%) and about double the online purchase rate of 14% in the US market.
The mobile shopping transaction value in South Korea totaled approximately KRW 31.3 trillion in the first quarter of 2021, with food services leading the categories at KRW 5.7 trillion. Mobile shopping is commonly used in South Korea, and the sector has shown continuous year-on-year growth within the online shopping sphere. In the third quarter of 2021, the online shopping transactions in South Korea grew by 19.6% compared to the same period in the previous year.
In the future, the domestic e-commerce market may have different growth prospects for different product groups, but it is expected to continue to expand in the long term. This is because Korean consumers have already experienced the convenience of online purchases in various product groups, and online and offline distributors are also making continuous investments.
South Korea's e-commerce market is expected to reach USD 325.12 billion in 2025. Factors such as increasing internet user penetration, the implementation of AI in retail, expanding urbanization, the escalating trend of online advertising, and increasing smartphone usage are expected to drive market growth over the forecast period.
The South Korean domestic CEP market is fragmented in nature, with a mix of global and local players, which makes the sector highly competitive. Some of the strong players in the country include CJ Logistics, Korea Post, Lotte Global Logistics, Hanjin Express, and Aramex. Unlike the global market, the current domestic online shopping market is not a monopolistic market centered on leading companies but rather involves intensifying competition among multiple companies. As high-cost competition in marketing and delivery continues, the market is expected to reorganize into a monopoly structure owing to mergers and acquisitions and alliances between companies.
In September 2021, in South Korea, DHL Express, a German logistics company providing courier, package delivery, and express mail service, installed DHLBot, an AI-powered robotic arm that automates parcel sortation and can sort over 1,000 small parcels per hour, increasing efficiency by at least 40%. The DHLBot will eliminate the need for manual sorting of small parcels, allowing hubs and gateways to manage higher quantities, especially during peak season. The DHLBot decreases the chance of mis-sorting by 99% and eliminates the need for secondary sorting.
In September 2021, FedEx Logistics, a multinational company focused on transportation, e-commerce, and services, opened an office in Seoul, South Korea, thus, expanding its global network. This new organization will provide one-source, end-to-end logistics solutions, including international air and ocean cargo services, customs brokerage arrangements, and trade solutions, as well as a number of value-added services.
Table of Contents
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2. RESEARCH METHODOLOGY
2.1 Analysis Methodology
2.2 Research Phases
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Current Market Scenario
4.2 Technological Trends
4.3 Government Regulations
4.4 Overview of the Logistics and Warehousing Market in South Korea
4.5 Brief on South Korea Freight Forwarding Market
4.6 Spotlight on South Korea E-commerce Sector (Commentary on Domestic E-commerce)
4.7 Impact of COVID-19 on the CEP Market (Short-term and Long-term Impact on the Market and Economy)
5. MARKET DYNAMICS
5.1 Market Drivers
5.2 Market Restraints/Challenges
5.3 Market Opportunities
5.4 Industry Attractiveness - Porter's Five Forces Analysis
5.4.1 Threat of New Entrants
5.4.2 Bargaining Power of Buyers/Consumers
5.4.3 Bargaining Power of Suppliers
5.4.4 Threat of Substitute Products
5.4.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION
6.1 By Business Model
6.1.1 Business-to-Business (B2B)
6.1.2 Business-to-Customer (B2C)
6.1.3 Customer-to-Customer (C2C)
6.2 By Type
6.2.2 Non E-commerce
6.3 By End User
6.3.2 Wholesale and Retail Trade
6.3.4 Industrial Manufacturing
6.3.5 Other End Users
7. COMPETITIVE LANDSCAPE
*List Not Exhaustive
7.1 Overview (Market Concentration and Major Players)
7.2 Company Profiles
7.2.1 CJ Logistics
7.2.2 Korea Post
7.2.3 Lotte Global Logistics
7.2.4 Hanjin Express
7.2.6 CH Robinson
7.2.7 DB Schenker
7.2.8 Linex Solutions
7.2.9 Nippon Express
7.2.10 Seko Logistics
7.2.11 SF International
8. FUTURE OF THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The South Korea Domestic Courier, Express, and Parcel (CEP) Market market is studied from 2018 - 2027.
What is the growth rate of South Korea Domestic Courier, Express, and Parcel (CEP) Market?
The South Korea Domestic Courier, Express, and Parcel (CEP) Market is growing at a CAGR of >10% over the next 5 years.
Who are the key players in South Korea Domestic Courier, Express, and Parcel (CEP) Market?
CJ Logistics, Korea Post , Lotte Global Logistics, Hanjin Express, Aramex are the major companies operating in South Korea Domestic Courier, Express, and Parcel (CEP) Market.