Delivery Market Joined by Kakao... 'Saenggakdaero' Competitiveness Lies in Grassroots Sales

Interview with Choi Gyu-beom, Vice President of Operator Logiol:
Strength in a Dense Network Focused on Small Business Customers
"Aiming to Be a Comprehensive Last-Mile Delivery Platform"
On 'Unfair Contract' Criticism... "New Contract to Be Implemented Next Month"

Choi Kyubeom, Vice President of Logiol

[Asia Economy Reporter Kim Bo-kyung] "Through region-based ‘grassroots sales,’ we have built competitiveness that large corporations find difficult to penetrate easily. We will create added value for customers by establishing a dense nationwide network."

As the domestic delivery market expands, companies are fiercely competing. Kakao Mobility, which announced its entry into the quick service market, attracted 10,000 riders within 10 days of posting recruitment notices, signaling a storm in the delivery industry. Regarding this, Choi Kyu-beom, Vice President of Logiol Co., Ltd., which operates the delivery agency service ‘Saenggakdaero,’ said in an interview with Asia Economy on the 24th, "As the delivery market passes the early growth stage, intensified competition and the entry of new players are somewhat natural," adding, "We are leveraging our strengths and compensating for weaknesses in line with market growth."

Vice President Choi said, "70% of our restaurant owner customers using Saenggakdaero service are independent restaurants," and added, "Since we have numerous non-franchise small business owners and self-employed customers who play the role of economic capillaries, we hold a relatively advantageous position." Logiol’s parent company, Inseong Data, operates a platform that occupies over 80% of the domestic quick service market.

"Nationwide Network Secured, Including Jeju Island Delivery"

Logiol, established in January 2016, is now in its fifth year as a delivery agency company. It currently has delivery contracts with approximately 94,000 restaurants and franchises. Last year, the number of processed orders reached 150 million, competing closely with Barogo for first and second place in the industry.

Revenue from delivery agency program usage fees alone amounts to 32.3 billion KRW. Transaction volume surged from 1.7 trillion KRW in 2019 to 3.1 trillion KRW last year. As of January this year, the number of affiliated delivery riders was about 51,000, a 34% increase compared to the same period last year.

Vice President Choi stated, "In addition to the 20 years of accumulated experience, know-how, and capital strength of Inseong Data, we have a nationwide network capable of performing deliveries even in Jeju Island." He explained, "Logiol’s mission is to save customers’ time and add value to that time." They provide last-mile delivery service right to the doorstep, allowing customers to engage in more valuable activities during that time. The last mile refers to the final delivery stage when ordered goods are delivered to consumers.

Vice President Choi said, "Our customers include not only consumers but also restaurant owners and riders," and added, "Ultimately, we aim to become a comprehensive last-mile delivery and shipping platform company."

Delivery Industry Competition... "We Will Improve Restaurant Owners’ Management Efficiency"

Vice President Choi predicted that the delivery and shipping market size will grow to around 40 trillion KRW in three years. The market size for deliveries occurring within 30 minutes of order arrival will significantly increase, and this is because not only the delivery industry but also e-commerce is focusing on this area. Delivery is converging with various industries beyond food delivery, and thus discussions on business partnerships with large corporations are actively underway, he explained.

Logiol is planning ways to improve the management efficiency of partnered restaurant owners. Vice President Choi said, "Some owners spend 1 million KRW per month on advertising, but they do not know exactly how effective the ads are," adding, "To answer such questions, we will analyze and utilize the data we have accumulated."

Regarding the Fair Trade Commission’s inspection of Logiol and two other major delivery agency companies, which found ‘unfair contracts’ such as imposing large penalties on regional delivery agencies, Logiol expressed its intention to actively rectify the issues. Vice President Choi said, "We will extensively revise the contracts to remove unnecessary or potentially misleading content," and added, "After consultation with the Fair Trade Commission, we plan to implement new contracts starting in June."

This content was produced with the assistance of AI translation services.