Signs of Essential Goods Hoarding... '3-Step Fear' Hits Marts

At 1 a.m. on the 17th, delivery drivers at Oasis's Seongnam Logistics Center in Gyeonggi Province are loading early morning delivery orders destined for Seoul and the Gyeonggi area onto each delivery vehicle.

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[Asia Economy reporters Minyoung Cha and Seungjin Lee] The number of confirmed cases of the novel coronavirus infection (COVID-19) reached 1,014 on the 17th, exceeding 1,000 cases per day for two consecutive days. As the government deliberates on raising social distancing to Level 3, some daily necessities are running out in large supermarkets, showing signs of panic buying, putting logistics centers of distribution companies on high alert. In the case of dawn delivery, the volume exceeds what can be handled in a day, leading to early closure of orders, and large supermarkets are also approaching their maximum order capacity, raising concerns that a logistics crisis similar to that in the US could occur if Level 3 is implemented.

Around midnight on the 17th, employees at Oasis's packaging zone inside the Seongnam Logistics Center in Gyeonggi-do are taking items out of customer-specific baskets and performing the final packaging work before shipment.

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At 0:00 on the 17th, hundreds of people were busy at Oasis’s Seongnam Logistics Center in Gyeonggi Province. Employees quickly sorted products according to the early-closed dawn delivery order sheets and placed them into baskets labeled with customers' names. Products on the massive conveyor belt, moving nonstop, were loaded onto delivery trucks immediately after being unloaded.

Na Wonsik, manager at Oasis, said, "When confirmed COVID-19 cases surge like these days, dawn delivery orders increase, and the closing time is much earlier than the usual 11 p.m., around 4 p.m. We have been working to stabilize logistics by increasing on-site staff, including delivery drivers. Depending on the time, between about 100 and 300 people work simultaneously."

The rail installed on the ceiling of Lotte Mart Junggye Branch on the 16th. When an online order is received, employees immediately pack the items in the store and use the rail to transport them to the logistics center.

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The situation was similar at the Digital Smart Store Lotte Mart Junggye Branch located in Nowon-gu, Seoul. Despite it being a weekday daytime, the store was bustling with people moving carts and filling them with goods. An employee who put milk into a basket glanced at a PDF device and ran to the opposite sales counter to add ramen. Recently, due to a shortage of staff, employees responsible for other tasks have been frequently assigned to picking and packing duties.

Online deliveries at the Junggye branch, which averaged about 800 orders per day, exceeded the daily delivery target of 1,300 orders set in November and approached 1,450 orders in December, nearing the daily delivery maximum. Kwon Youngdae, deputy manager of Lotte Mart Junggye Branch, said, "For reserved deliveries, demand was highest at 11 a.m. after sending children to school and at 7 p.m. when people return home, but recently, reservations for all time slots have been fully booked."

On the 16th, an employee at Lotte Mart Junggye branch is placing coffee drinks ordered through 'Baro Delivery' into a basket.

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There are concerns that a logistics crisis similar to those that occurred in the US and Europe earlier this year could happen if social distancing is raised to Level 3. As the COVID-19 situation prolongs, consumption of new food products has increased, and processed food manufacturers have changed their production methods to small-batch, multi-product production to meet consumers’ picky tastes. If panic buying intensifies, securing sufficient inventory may become difficult. Additionally, large-scale discount events by the distribution industry to clear year-end stock have significantly increased consumption of general manufactured goods, breaking records for logistics and parcel delivery volumes.

On this day, supermarkets were crowded with consumers buying daily necessities. Some items were sold out amid concerns that large supermarkets might have to suspend operations if social distancing is raised to Level 3. Some major daily necessities were also sold out on e-commerce platforms such as Coupang. There are opinions that the government should calm consumers. An industry insider said, "The government has not clearly answered whether large supermarkets can operate if Level 3 is implemented, which rather increases consumers’ anxiety. We should not overlook the fact that the reason there was no panic buying in Korea during the major COVID-19 outbreak earlier this year was that distribution channels, including large supermarkets, supplied daily necessities stably."

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