An analysis on the changes in the parcel delivery services market with growing home-based consumption in Korea

Transcription

1 7 th METRANS I-NUF Conference October 18-20, 2017 Long Beach, CA An analysis on the changes in the parcel delivery services market with growing home-based consumption in Korea Sang Beom SEO* Jee-Sun LEE MetroFreight Center of Excellence Dept. of Logistics Research, The Korea Transport Institute (KOTI)

2 Questions How has the changing retail trend with rapid growth of ecommerce transformed the way that individuals purchase and receive goods? influenced the parcel delivery services market in Korea? This study analyzes... sales growth trend of ecommerce volume of packages delivered and sales of parcel delivery services relationship between ecommerce and parcel delivery services by collecting data of... # packages delivered, sales, and unit price of delivery for 28 months (Nov ~ Feb. 2017) from two major Korean parcel delivery companies ecommerce data on shopping channels, purchase items and sales published by Korea Statistics 1/16

3 Retail Trends Changing Globally ICT development setting off structural changes in retail business 1) Context shopping supporting customer s seamless shopping recommendations/suggestions, scheduling repeated purchases: lead impulse buying More store-products penetrating to the online shopping market More fashion goods on Amazon.com: 30M or so 2016 (increased by 91% over year) Restructuring traditional value chains in retail business direct online sales channels between producer and consumer, 3D printing O4O(Online for Offline) platform spreads Amazon GO: AI-based unmanned stores Reorganizing of traditional offline stores by providing more chances of trial/experience/simulation SMART logistics : technological advancement automation and unmanned, sharing modes or using the crowd, new delivery modes 1) source: KORCHAM, 2017 White paper of Korea retail market 2/16

4 Commerce Trends also Changing in Korea online shopping sales increasing 1 billion KOR won (around 0.87 million US $) 40,000 25% 35,000 30,000 20% 25,000 20,000 15,000 15% 10% 온라인 online 오프라인 offline 온라인매출비중 online sales% 10,000 5,000 5% - 0% Data source : KOSIS ( ~2017.3) and Seo and Lee(2017) 3/16

5 Commerce Trends also Changing in Korea ecommerce sales, any sales for services excluded, keep growing total sales : $30 billion $42 billion sales per transaction : $22 $27 6, billion KOR won 1,000 KOR won (around 0.87 US dollar) 35.0 y = x , , y = x , , 서비스제외 total sales 서비스제외 unit sale ( 건당 ) 1, Data source : KOSIS ( ~2017.3) and KOILA s parcel delivery service DB for the same period 4/16

6 Korean Commerce Trends also Changing mobile shopping sales growing fast sales of nondurable goods relatively increasing 1 billion KOR won 7, % , % , % , , % 30.0% 온라인 online 모바일매출 mobile 비중 % mobile 내구재 durables 준내구재 semi-durables 비내구재 nondurables ( 소비재 ) , % 1, % % - Data source : KOSIS ( ~2017.3) Data source : KOSIS ( ~2017.3) 5/16

7 New logistics demands grow Consumption behavior changed Faster delivery demands growing 6/16

8 New logistics demands grow new logistics business model developed On-demand logistics services platform / omnichannels fulfillment services, last-mile delivery services getting significant Smart Pick 온라인주문상품을매장에서직접혹은차량에서곧바로받는서비스 L.Pay 신용카드 현금등없 dl 스마트폰에설치된앱만으로지불과결제를마칠수있는기술 Beacon 고객스마트폰에할인쿠폰등콘텐츠자동전송이가능한 비콘서비스 ( 스마트폰근거리기술 ) 개시 retail/logistics/finance integrated platform (eg. Lotte) On-Demand based last-mile service platform (eg. CJ Korea Ex) retail/logistics/finance integrated platform (eg. Shinsegae) + bicycle Quick delivery services (eg. Mesh Korea) SSG Pay 현금 상품권등으로충전된선불식 SSG 머니와후불식신용카드간편결제가앱내에서동시진행 SHOP@ 오프라인매장의다양한상품과매장이미지를모바일로편하게감상하며쇼핑할수있는모바일앱 Magic Pick-up SSG.COM 주문시고객이원하는가까운 off-line 매장을지정하여해당매장에방문하여수령할수있는서비스 7/16

9 Recent trends in parcel delivery market parcel delivery service market rapidly growing introductory stage in early 2000s, another growth stage thanks to rapid growth of mobile shopping and open market since 2015 Packages in , % 2,047 90% 80% / person / household 2,000 1,816 70% 1,500 1, % 13.9% 301 y = e x R² = % 17.9% % % % % 11.0% 1,080 1,198 1,299 1,406 1, % 8.2% 7.3% 7.6% 1, % y = x R² = % 60% 50% 40% 30% 20% 10% 물량 ( volume 백만건 (mil ) pks) 증감율 growth (%) rate (%) 년 2001 년 2002 년 2003 년 2004 년 2005 년 2006 년 2007 년 2008 년 2009 년 2010 년 2011 년 2012 년 2013 년 2014 년 2015 년 2016 년 0% Data source : KOILA (2016) and Seo and Lee (2017) 8/16

10 Recent trends in parcel delivery market '09-01 '09-05 '09-09 '10-01 '10-05 '10-09 '11-01 '11-05 '11-09 '12-01 '12-05 '12-09 '13-01 '13-05 '13-09 '14-01 '14-05 '14-09 '15-01 '15-05 '15-09 '16-01 '16-05 '16-09 '17-01 freight volume keep increasing for last eight years obvious seasonality low points in February and August, high points for three months of October to December (peak in November) 250,000 Monthly volume of parcels delivered ('09.01-'17.03) Seasonality analysis 200,000 R² = ,000 R² = , , Data sources: KOILA and individual company s internal datasets 9/16

11 Spatial distribution of parcel deliveries Seoul Metropolitan Area (SMA) Seoul Metro Area is HOTSPOT variations within the city of Seoul < inflows from others> < inflows from SMA> < interregional flows of parcel freight in Korea > < outflows to others > < outflows to SMA > 10/16

12 ecommerce and Parcel delivery services relationship between ecommerce sales size and volume of parcels delivered from November 2014 to February 2017 analyzed each growing pattern in parallel 7,000 1 billion KOR won 1 million packages 250 6, ,000 4,000 3,000 2,000 1, 온라인매출 online 모바일매출 mobile 택배물동량 # packages 0 0 Data sources: KOILA, KOTIS and individual company s internal datasets 11/16

13 ecommerce and Parcel delivery Services regression analysis between ecommerce sales and volume of parcels delivered conducted online shopping sales for services excluded, B2C only every ecommerce sales of around 23,620 KOR wons ( $21) produces one package delivered by parcel delivery service at the significance level of 95%, the sales level ranges between 19,632 and 26,396 KOR wons ( $17~$23) another regression analysis between sales of parcel delivery service companies and online shopping sales around 1,913 KOR wons ( $1.7) per one parcel package at 95% significance level, 1,658~2,100 KOR wons ( $1.5~$1.9) In a word, an ecommerce retailer pays the parcel delivery cost of 1,913 for every single online shopping sales of 23,620 its logistics cost accounts for about 8.1% on average Also meaning that a parcel delivery service company earns 1,913 for every single online shopping sales of 23,620 12/16

14 How industry responding? Gunpo IFT Seoul Gunpo IFT 13/16

15 How industry responding? Seoul Ease-South Logistics Park Eco-Friendly City Logistics Park One-way In & Out System Cold storage using underground Gimpo LP 김포물류단지 Seoul LOASIS 14/16

16 How industry responding? Gimpo Logistics Park Gimpo LP 김포물류단지 Seoul LOASIS Fulfillment Center for E-commerce 15/16

17 Conclusion and Future study rapidly growing ecommerce transforming individuals purchase behavior as well as their demands on receiving goods parcel delivery services market growing fast parcel delivery service companies were able to reduce the cost for every single online shopping sales of around $21, parcel delivery service costs $1.7 or so: retailers would try to minimize the delivery costs while parcel carriers would try to maximize the delivery profits Further study will conduct a more detailed analysis on ecommerce business models and its urban freight strategies by shopping item. For the next stage of data collection, a survey of parcel delivery truckers on delivery points and routes, hours, shipment size, parking and delivery behaviors, etc. is being planned. expecting all these efforts give us helpful insights for improved urban distribution networks, efficient and effective last-mile strategies, and management and mitigation of externalities caused by parcel delivery services within urban area 16/16

18 KOTI enriches the future by securing harmony among humans, the environment and transport. KOTI : 17/16