[Why&Next] Korea’s Walmart vs Coupang’s Reign: Is the Dawn Delivery Market on the Verge of Upheaval?

Push to Allow Dawn Delivery for Hypermarkets
Logistics Competitiveness of Hypermarkets Challenging Coupang

"The pace of change in the retail industry has accelerated. Our financial performance not only accommodates these changes but also demonstrates that we are leading the way. For our customers, the future is fast, convenient, and personalized."

John Furner, CEO of Walmart, stated this on the first page of Walmart’s 2026 fiscal year financial report, which closed at the end of last month. At that time, Walmart announced that its annual revenue had increased by 5.6% year-on-year to $190.7 billion (excluding exchange rates), with global e-commerce sales up 24%, driven by growth in store pickup, delivery, and marketplace sectors. As the world's largest offline retailer, Walmart still maintains its dominance in the distribution market despite competition from Amazon, the largest global e-commerce platform.

As the government and the ruling party move to ease regulations banning late-night operations at large domestic supermarkets, attention is being paid to whether the dawn delivery market, currently dominated by Coupang, will be reshaped. If large supermarket chains with hundreds of locations nationwide enter the dawn delivery competition, they could secure new growth engines by integrating online and offline channels, much like Walmart.

According to the National Assembly’s bill information system on March 2, amendments to the Distribution Industry Development Act, which would allow large supermarkets to offer dawn delivery, were submitted last month. The bill, sponsored by Dongah Kim of the Democratic Party, allows unrestricted online delivery by large supermarkets and super-supermarkets (SSMs), while maintaining offline business regulations such as mandatory holiday closures.

Sungwon Kim, a lawmaker from the People Power Party, sponsored another amendment that would exempt SSM franchisees from business regulations and remove the ban on late-night operations (from midnight to 10 a.m.) for both large supermarkets and SSMs.

The core issue in these amendment discussions is "logistics." The current Distribution Industry Development Act was designed to regulate offline consumers, but as online orders and delivery became bundled, it effectively blocked large supermarkets from utilizing logistics during late-night hours. In contrast, online-only platforms have expanded dawn delivery services outside the scope of these regulations, securing market share. The proposed legislation aims to address this regulatory imbalance by allowing stores to be used as logistics hubs even if they are not open for sales.

Why is dawn delivery important... Coupang holds a 75% market share

Dawn delivery is not simply a service that moves up the delivery time. The experience of finding products at the doorstep when consumers wake up in the morning increases purchase frequency, broadens the range of items bought, and deepens dependence on a particular platform. Once a consumption pattern is established where daily necessities, fresh produce, and manufactured goods are all addressed at once, the platform effectively becomes a lifestyle infrastructure.

For this reason, the core of dawn delivery is not profitability but the "lock-in" effect. Even if short-term losses are incurred, securing users can later generate returns through memberships, advertising, and store entry fees. This is why Coupang continued to invest in logistics and dawn delivery, enduring years of large-scale losses.

It is estimated that around 20 million people use dawn delivery services in Korea. Of these, Coupang's market share is known to be about 75%. This structure goes beyond simple market leadership and approaches near-monopoly status.

The foundation of Coupang's dominance lies in logistics and product assortment. According to the Ministry of the Interior and Safety, Coupang has registered 246 logistics hubs nationwide for warehouse operations. In addition, the number of SKUs (stock keeping units) available for Rocket Delivery is estimated at over 5 million. By comparison, Naver Shopping offers 200,000 to 300,000 guaranteed arrival products, and Market Kurly around 40,000, highlighting a dramatic gap.

Supermarkets with over 1,800 locations... Existing dawn delivery companies on alert

Although large supermarkets also have a nationwide store network, they have been unable to use it for late-night logistics due to business regulations. Stores scattered throughout the country have been used only as daytime sales spaces, making it virtually impossible to even line up at the starting point of the dawn delivery race.

The situation will change if regulations are eased. The three major supermarket chains—Emart, Lotte Mart, and one other—have about 670 stores across the country. Of these, approximately 460 stores, or 69%, already serve as picking stores for selecting and delivering products for online orders. If SSMs are included, the total rises to over 1,800 locations. This existing infrastructure can be converted into dawn delivery hubs without major new investments. In terms of store numbers, the large supermarket industry surpasses Coupang's number of logistics hubs. Unlike Coupang’s logistics center-focused model, supermarkets can offer a “proximity-based delivery” model by using stores near residential areas, presenting an alternative solution.

Among the three major supermarket chains, Emart is widely considered to be in the most advantageous position. It has already established an online ordering and delivery system centered on SSG.com and leads in store-based picking capabilities. With a high store density in the Seoul metropolitan area and major cities, Emart is likely to have a strong advantage in the initial expansion of dawn delivery services.

Lotte Mart's strength is its integrated platform strategy through linkage with Lotte ON, but speed of execution and coordination between organizations remain challenges. Homeplus benefits from store accessibility, but after years of store closures and currently undergoing corporate rehabilitation procedures, it is evaluated as having limited capacity to actively participate in dawn delivery competition.

The entry of large supermarkets is also expected to put significant pressure on existing dawn delivery specialists such as Market Kurly and Oasis Market. These companies pioneered the market with premium fresh produce and curation, but face structural limitations in product selection and logistics scale.

Market Kurly has responded by introducing more segmented delivery times, such as its “Midnight Saetbyeol Delivery” service, which allows customers to receive their orders by midnight on the same day. Oasis Market is reportedly considering strengthening its dawn delivery by linking it with the reopening of TMON.

Yonhap News Agency

"A turning point that could reshape the market"... Labor issues must be resolved

Industry insiders believe that even if the amendment to the Distribution Industry Development Act does not immediately topple Coupang's dominance, it could serve as a turning point that shifts the balance in the retail market. Once dawn delivery becomes a standard option across the industry, rather than an exclusive feature of certain platforms, the basis of competition will inevitably be redefined.

Signs of change are already appearing in the market. According to retail analytics service WiseApp·Retail, Coupang's monthly active users (MAU) in January 2026 were 33,180,863, a 3.2% decrease compared to the previous month. That means 1,099,901 users left in a single month. Considering that the decrease was only 0.3% in December 2025, the drop has widened significantly. This is interpreted as a result of the impact of a personal data breach incident at the end of last year. In fact, while Coupang's annual revenue in 2025 exceeded 49 trillion won, showing continued growth, its WOW membership lost about 100,000 subscribers in the fourth quarter alone.

However, there are still many variables to overcome before the system becomes reality. In particular, labor issues are cited as the biggest variable for the expansion of dawn delivery by large supermarkets. If late-night packing, sorting, and delivery work increases, changes in work schedules and additional staffing will be unavoidable, and labor unions are likely to oppose what amounts to an expansion of nighttime work.

Opposition from small business owners is another hurdle. Last month, the government and ruling party held a closed meeting with small business associations to discuss measures for coexistence in preparation for allowing dawn delivery by large supermarkets, but the small business representatives requested a full reconsideration of the regulatory easing.

A retail industry official said, "This system change may not lead to an immediate upheaval, but it could alter the competitive landscape in the dawn delivery market. Even if the system is implemented, dawn delivery is a business with extremely high fixed costs unlike its headline growth figures. Unless there is strong acceptance at the operational level, the speed of expansion will be limited and the market will likely be reorganized around companies with significant resources."

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