adminCoupang announced on the 15th that food sales in the first quarter of this year increased by 20% compared to the first quarter of last year. Considering that the amount is excluding fresh food, it is actually the sales amount of processed food.
This is more than three times the growth rate (6%) of food sales in the domestic online and offline distribution market in the first quarter compiled by the National Statistical Office. Coupang praised itself as an achievement achieved despite the “three high bad news” of high prices, high interest rates, and high exchange rates. In particular, the fact that small and medium-sized food companies increased cost-effectiveness (price-performance) products was cited as a key driver of sales growth.
It is explained that Coupang created a win-win effect by taking responsibility for logistics, distribution, and customer response ( CS ) such as ‘rocket delivery’, while manufacturers focused on product production and quality improvement. Coupang cited as a representative example the sales of S&Food in Gangneung, Gangwon-do, which supplies its own brand (PB) “Gomgom” protein bar, jumped 15-fold from 200 million won in the first year of entering Coupang in 2019 to 3 billion won last year .
The industry believes that Coupang’s successive steps in highlighting the expansion of sales of products by small and medium-sized companies are aimed at CJ CheilJedang and LG Household & Health Care, which have been in conflict with suppliers.
Previously, as a result of analyzing food sales trends from January to May this year, Coupang announced on the 11th that sales of instant rice products by small and medium-sized enterprises increased by more than 100 times compared to the same period last year. During the same period, instant soup and frozen dumplings made by small and medium-sized enterprises also increased by 60%.
An official from Coupang said, “We have strengthened collaboration with small and medium-sized food companies that are in dire need of expanding sales channels.
Since the end of last year, CJ CheilJedang has stopped supplying Coupang, such as ‘Hetbahn’, which ranks first in the instant rice market. Negotiations have been ongoing for six months over the setting of the sales commission (unit price for delivery) applied in 2023, but this is the aftermath of the failure to narrow the gap.
Since e-commerce is easier to compare prices than offline stores in the past, industry analysts say that if one company lowers the delivery price, other channels eventually demand a lower delivery price, so they actively defended themselves.
CJ CheilJedang, competing e-commerce and ‘union front’?
CJ CheilJedang appears to be moving away from Coupang by actively joining hands with Coupang’s rival e-commerce. This year, it started actively collaborating with e-commerce companies such as Naver, 11st, Curly, and Timon.
Recently, it decided to develop products in partnership with three distribution companies affiliated with the Shinsegae Group, including E -Mart토토사이트, SSG.com , and G Market.
The collaboration concept is ‘a new world of the most innovative food that has never existed in the world’. Collaboration between the two sides proceeds in the commercialization of data-based products and distribution and marketing. CJ CheilJedang decided to develop a Home Meal Meal ( HMR ) product in the fourth quarter of this year and release it on the Shinsegae platform first. We decided to plan five categories of products, focusing on dumplings, soup dishes, meal kits, and vegan products. Based on market and customer data, it was decided to introduce new products optimized for demand at E-mart, SSG.com, and Gmarket sequentially from August .
CJ CheilJedang said, “The intention is for companies with the best competitiveness in food and distribution to join hands to provide products and services that reflect lifestyles to consumers. ” The three distribution companies are data, product planning ( MD)) , and has core competencies in platform planning and operation, so synergy is
expected . ” Prior to the three Shinsegae Group companies, CJ CheilJedang also signed a business agreement with Curly, which operates an early morning delivery service, for joint product planning in March. The same month, Naver Shopping operated . This month, Naver’s ‘Arrival Guarantee Hall’ is selling popular products at a discount in partnership with P&G Korea, a global household goods company. Also, from last month, 11th Street’s next-day delivery service, ‘Shooting Delivery’, along with LG Household & Health Care and Coca-Cola, as a representative brand. This month, ‘Tmon XCJ Food Market ‘, an experiential marketing event that goes back and forth in cooperation with Timon, is also underway. Jang Ji-hye, a researcher at DS Investment & Securities, said , ” Food manufacturer In response to the distributor’s request for a lower delivery price, the company decided to suspend delivery. This is attributable to the fact that major manufacturers have become relatively competitive due to the expansion of exports while profitability has declined due to cost burden.”