As South Korea’s parcel delivery race heats up, logistics firms are rushing to offer faster and cheaper service—even at the risk of burning out.
CU, a major convenience store chain, is the latest to join the fray, launching a 24-hour delivery option that promises next-day arrival for parcels dropped off at its locations.
CU said on Apr. 14 that it will roll out a new service that delivers packages to designated locations the day after they are dropped off. Using its own logistics network, the company aims to offer ultra-fast delivery in just 24 hours, expanding on its existing courier and international express delivery options.
The move comes as competition intensifies in the country’s parcel delivery market, where retailers and logistics firms are facing growing pressure to keep up with consumers’ rising expectations for faster and cheaper service. While companies continue to enhance their delivery options to stay competitive, they are increasingly grappling with slowing market growth and deteriorating profitability.
Some companies have already felt the strain. One firm that had advertised itself as the top player in early morning delivery shut down its service, and a courier company pushing for seven-day-a-week operations is now clashing with its labor union.
“The era of faster delivery as a measure of competitiveness started with Coupang, but now companies trying to keep up are starting to tear at the seams,” said one industry official. “Parcel firms may end up raising fees for e-commerce clients, and that could ultimately lead to higher prices for consumers.”
TeamFresh, a logistics firm that once held more than 90% of the business-to-business early morning delivery market, halted its service on Mar. 31. Founded in 2018, the company’s annual revenue grew nearly 200-fold in six years—from 2.7 billion won ($1.8 million) to about $382 million. It had raised over roughly $140.5 million in total investment, but was forced to suspend operations when a key funding round was delayed.
As most retailers lack their own delivery networks, they rely heavily on logistics providers to meet the fast delivery expectations of customers. “Logistics companies offering courier services face steep costs,” said one industry insider. “But to attract new clients, they have no choice but to promise faster delivery and round-the-clock service.”
Still, for delivery companies, services like holiday and early morning shipping come with significant risks. These options typically require courier firms to pay drivers 20% to 30% higher fees. If parcel volumes continue to grow, companies can hope to benefit from economies of scale. But if the additional volume doesn’t materialize, the higher costs can quickly erode profits.
Adding to the challenge is the slowing pace of growth in S. Korea’s parcel delivery market.
According to Daishin Securities Research Center, the country’s total parcel volume—excluding Coupang—was estimated at 580 million boxes during January and February this year, down 4% from 604.16 million during the same period in 2024. Meanwhile, growth in e-commerce transactions, a major driver of parcel volume, has started to slow.
In January, CJ Logistics began offering deliveries seven days a week, 32 years after launching its courier business. Other major players like Hanjin and Lotte Global Logistics are also expected to follow suit, but labor unions are pushing back.
On Apr. 9, the parcel delivery workers' union affiliated with the Korean Confederation of Trade Unions accused Hanjin of trying to unilaterally implement seven-day delivery without consulting labor representatives.
For delivery companies that have added early morning and weekend options to win clients, those services could end up being a liability if the volume doesn’t increase as expected.
Many in the retail sector believe that now that consumers have gotten used to next-day shipping and weekend deliveries, there’s no going back to slower timelines where packages take two to three days and aren’t delivered on holidays.
With hopes pinned on an economic rebound, industry officials say companies may be forced to accept cutthroat competition and price hikes as the cost of survival.
