"Let's Retain 'Loyal Customers'..." Shin Distribution War Featuring Kurly (Comprehensive)

Launch of Kurly Members Promising Over 10x Benefits
Competition Expands Beyond E-commerce to the Entire Distribution Industry

Kurly has entered the paid membership competition. The membership war, which has spread beyond the e-commerce industry to the entire distribution sector, is expected to intensify further. From the consumer's perspective, who now have a wider range of service options, this is not a bad phenomenon, but there are also many concerns about the negative effects that excessive competition might bring.

Kurly has launched a paid membership service called 'Kurly Members' with a monthly subscription fee of 1,900 KRW, offering excellent benefits. Upon signing up, members receive 2,000 KRW in points every month, along with a coupon pack worth up to 24,000 KRW and external partnerships.
[Photo by Kurly]

Kurly: "More than 10 times the benefits for 1,900 KRW per month"

On the 1st, Kurly announced the launch of its paid membership service, 'Kurly Members,' highlighting "more than 10 times the benefits" as the main feature. By paying 1,900 KRW per month, members receive 2,000 KRW in reward points and a pack of five coupons worth up to 24,000 KRW, including free shipping coupons. Kurly also said it plans to offer special discounted products and exclusive items only for membership subscribers.

Offline partnership benefits are also prepared: when purchasing an Americano at Coffee Bean, members get one free cup per month, and two 10% discount coupons usable at convenience store CU are provided. Kurly explained that these benefits will return to consumers at more than ten times the subscription fee.

Kim Byung-wan, Kurly’s Chief Growth Officer (CGO), said, "We have improved the quality of the membership by carefully selecting only highly useful benefits, not just for the sake of variety," adding, "Through the membership, more customers will be able to enjoy the pleasure of shopping."

Membership War Expands Beyond E-commerce to the Entire Distribution Industry

With Kurly launching Kurly Members on this day, the membership competition in the e-commerce industry is expected to heat up further. Many companies in the industry already operate membership services emphasizing their own strengths. For example, Coupang launched its Wow Membership in 2019 and had accumulated over 11 million members by the end of last year.

Naver also operates the 'Naver Plus' membership service, which offers 5% reward points on shopping through its portal search and access to digital content such as webtoons, reaching 10 million members. 11st and Wemakeprice also entered the competition by launching membership services in 2021. 11st joined ‘Uju Pass,’ launched by its affiliate SK Telecom, boasting free delivery of Amazon direct purchase products as a key advantage.

This trend is spreading not only within the e-commerce sector but throughout the distribution industry. A representative example is Shinsegae Group, which launched a paid membership service called 'Shinsegae Universe Club' in June. Lotte Group also provides integrated reward points called 'L.Point' for free through Lotte Members, usable across all affiliates both online and offline.

Lee In-young (left), CEO of SSG.com, Kang Hee-seok (center), CEO of E-Mart, and Jeon Hang-il, CEO of Gmarket, are taking a photo after finishing a press conference at the 'Shinsegae Universe Festival' held last June at COEX in Gangnam-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

Competition for Survival... Could Become a Boomerang

Distribution companies are launching membership services because they consider securing loyal customers important. With the e-commerce market rapidly growing during the COVID-19 period and competition intensifying both online and offline in the post-endemic era, maintaining profitability ultimately requires securing loyal customers through membership services and aiming for the 'lock-in effect.' The lock-in effect refers to the phenomenon where consumers become accustomed to using a particular service, making it difficult to switch to others and thus continuing to use the existing one.

In this trend, companies that launched memberships earlier are gradually strengthening their services. For example, Coupang initially limited its membership benefits to essentially free shipping, but now it has expanded to about ten benefits, including a 10% discount on the delivery platform Coupang Eats. Shinsegae is also reportedly pursuing membership collaborations in various fields such as finance and delivery platforms.

If competition among companies over membership services overheats, the ultimate beneficiaries will be consumers. Competition among companies leads to improved service quality, which can broaden consumers' choices for memberships that suit their preferences. However, experts warn that excessive competition can also negatively affect consumers. Professor Lee Eun-hee of Inha University’s Department of Consumer Studies said, "If companies compete by offering too many benefits, it can put pressure on their management and profitability," adding, "If this pressure continues, the current benefits will inevitably shrink."

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