As competition in last-mile delivery intensifies across the domestic and global retail industry, in-house logistics systems have emerged as a core survival strategy, analysts said Friday.
The Korea Distribution Association held its July retail forum at the Korea Chamber of Commerce and Industry in Jung-gu on Friday, under the theme "Sustainable Delivery Platform Strategies in the Age of Last-Mile Competition." The event featured case studies from overseas showing how the adoption — or absence — of in-house logistics has determined winners and losers in the market.
Grubhub, a US order-brokerage platform, lost its position as the top delivery platform in the United States in 2019 to DoorDash, which directly manages the entire process from order placement to delivery. By December 2024, the market share gap between the two had widened tenfold.
The direct link between last-mile delivery quality and customer satisfaction was cited as the driving force behind the spread of in-house logistics and delivery operations. Lee Seong-ho, a professor at Hanbat National University, said, "This shows that whether a company adopts in-house logistics and delivery is the decisive factor in determining its survival in the market."
Lee said the internalization and direct operation of logistics processes — including delivery — is an irreversible trend playing out not only among domestic and overseas delivery platforms but across the broader retail industry, including e-commerce.
Following overseas players such as Amazon, DoorDash and JD.com, domestic retailers including Kurly and CJ Olive Young have also moved to bring their logistics operations in-house.
"As competition over last-mile service quality has intensified across the retail and delivery industry, in-house logistics — which allows companies to manage delivery quality and the overall logistics process in a stable and efficient manner — has spread as a survival strategy," Lee said. "It is a trend playing out across the entire retail industry."
Choi Ja-young, president of the Korea Distribution Association, said in-house logistics expansion has already established itself as a global trend. "In-house logistics is no longer a choice for select companies — it is a survival strategy for retail and delivery platforms across the board to remain competitive in the last-mile race," she said.
However, some participants cautioned that building an in-house logistics operation does not guarantee success on its own.
Han Sang-rin, a professor at Hanyang University, said during a panel discussion that in-house logistics inevitably entails high management and system-building costs. "A sustainable structure can only be achieved when there is sufficient demand, technological capabilities such as AI, operational competence and efficiency," he said.
Ok Gyeong-yeong, a professor at Sookmyung Women's University, said the high operating costs that delivery platforms bear — covering system construction and management, rider recruitment and service quality assurance — risk being passed on indirectly to participants in the delivery ecosystem, particularly consumers.
spa@heraldcorp.com
