Korean Door-to-door delivery market grows 17% in 2001
The nation’s 94 door-to-door delivery service companies posted an average of 12.8 billion won ($9.8 million) in annual revenue last year, up 17.3 percent from the previous year, an industry report said, painting a rosy picture of the industry’s outlook.
The Korea Chamber of Commerce and Industry (KCCI) said yesterday that the rapid spread of electronic commerce is expected to help keep the recent robust growth of the local door-to-door delivery industry sustainable for the foreseeable future. Citing its survey of local delivery service providers, the KCCI then forecast annual growth of over 10 percent over the next three years.
On the downside, however, intensifying competition among the nearly 100 domestic players will further heat up pricing competition, it said, predicting an industry-wide consolidation.
In truth, the gap between the four biggest players and the small- and medium-size firms is increasingly widening, the KCCI report noted.
Annual revenues of the so-called Big Four companies – Korea Express, Hanjin Transportation Co., Hyundai Logistics Co. and CJ GLS Co. – averaged 118.2 billion won in 2001, marking a year-on-year jump of 39.3 percent, the report said. In contrast, the small and medium-sized delivery firms managed to increase their average income by a mere 1.9 percent to 4.88 billion won last year.
“About 45 percent of the local delivery firms, including the Big Four entities, forecast annual average growth of over 10 percent through 2004,” said Kim In-seok, a KCCI economist. Over 33 percent cited logistics outsourcing as the reason for the optimistic forecast, followed by the spread of e-commerce (28.8 percent) and rising demand from individual customers (27.3 percent).
“But 18.9 percent predicted a deterioration in their bottom lines hinting at an intention to withdraw from the industry.”
On average, local delivery service firms have 25 branch offices, 90 sub-branch offices, 106 delivery trucks and 54 large trucks. Each of them handled an average of 3.6 million boxes last year, with the corresponding figure for the Big Four companies standing at 24.25 million boxes. Corporate customers accounted for 58.1 percent of total customers.
