Naver, CJ Logistics working on next-day delivery business to rival Coupang

Naver and CJ Logistics are working on something new as part of their strategic alliance. The companies opened two new fulfillment centers in an effort to push for the next-day delivery service.

The Korea Herald reported that the move is also part of the plan to challenge Coupang in the field of the delivery business. It was last weekend when Naver and CJ Logistics’ plans were revealed and it was shared that the operations in the fulfillment center have already started.

Next day delivery push

The companies set up an all-around fulfillment center in Gunpo, Gyeonggi Province and another hub with a cold chain system for chilled and frozen products is opening soon as well. The second center is also in Gyeonggi, but it will be in Yongin. This second center is ready by August and is projected to shorten the processing time for deliveries.

The floor space of the warehouse in Gunpo is said to measure 38,400 square meters and it is a five-story building. This size is equivalent to five soccer stadiums, so there is surely enough space for everything, including storage, packing and shipping the items. Moreover, Naver and CJ Logistics’ new warehouse boasts of the latest logistics technology such as eFLEXS systems and MPS.

It was explained that the new fulfillment centers will have delivery drivers pick up packages and they will drop off the collected items at the main logistics site in Gyeonggi Province. In this way, customers can receive their packages the next day after placing an order on Naver’s shopping platform before midnight.

“While regular courier services stop taking orders at 3 p.m. before dispatching packages for the day, fulfillment centers send packages straight to the Gonjiam mega-hub terminal which is located one hour away without waiting for drivers or going to a sub-warehouse,” CJ Logistics stated.

AI logistics plans

Naver and CJ Group entered into a partnership and signed a ₩600 billion or $529 million deal last year. They are aiming to become a competitive e-commerce market in S. Korea and compete with Coupang.

To realize their goal, Naver and CJ Logistics are also working on expanding logistics infrastructure and in fact, as mentioned on News Directory3, it is carrying out Artificial intelligence (AI) logistics experiments in the new fulfillment centers to advance and make their services better. To be more specific, it is testing Colva Forecast, an AI for predicting logistics demand day ahead for the facilities to operate more effectively.