[이코노미스트] Coupang’s ‘Rocket Installation’ is on fire

Next day delivery for both the furniture industry … Controversy to beat the unit prices of “ currently ongoing ” manufacturers

Photo: © escorebank

Coupang’Rocket Shipping ‘has expanded its feet to furniture. On September 18, Coupang renamed “Professional Installation”, a rocket delivery service for large appliances, to “Rock Installation” and expanded the scope of the service to furniture. Meanwhile, simple tables, drawers, additional beds and sofas were delivered the next day. However, this is the first time that a professional installer has visited and directly buys and sells formal furniture that needs to be installed.

For large appliances and furniture, it usually takes several days to order due to issues such as supplying and delivering the product or coordinating delivery dates. In Coupang, if you order before 2pm, you can get big appliances like TVs, refrigerators and washing machines, as well as furniture like beds, sofas and dining tables, just like other rocket products. You can freely choose the delivery and installation schedule for two weeks after the order according to the customer schedule. There are about 200 types of products that can be installed on a rocket.

Delivery is not handled by Coupangman, but by Hauser, a complete furniture manufacturing company. In addition, free shipping is provided to all areas including islands and mountainous areas and the cost of escalators and necessary to install the product is provided free of charge. This is an unprecedented advantage considering that the cost of delivering furniture ranges from 20,000 to 30,000 won to over 100,000 won. Coupang said: “In the case of furniture products, the delivery and installation took quite a bit of time and cost, but the rocket installation service cut that dramatically.” “The rocket installation service will provide a differentiated experience in buying furniture.” Has explained.

A month after Coupang introduced mobile rocket delivery, Hyundai LIVART also launched next day delivery service. On October 12, Hyundai LIVART launched “Tomorrow Delivery”, which delivers the sofas the next day. It is intended for the metropolitan area and is delivered two days after the order date in case of purchase on weekends or holidays. A Hyundai Livart official explained: “In view of the fact that customer needs for fast delivery not only for food and clothing, but also for furniture products are increasing due to the recent spread of the untreated trend, we are introducing a tomorrow’s delivery service. ”

Hyundai LIVART has set up a separate exclusive sofa warehouse in the LIVART Smart Work Center in Yongin, Gyeonggi-do since May to handle the sofa delivery service tomorrow. The warehouse area is approximately 17,000 square meters, the largest in the country. Here you can store more than 5000 sofas for 4 people at the same time. In particular, in the warehouse there is a bench only sofa (a structure designed to allow horizontal loading / unloading between the warehouse and the vehicle) which can load the products in 20 delivery vehicles at the same time in the warehouse, reducing the total delivery time of the couch, which took an average of 10 hours a day, about 5 hours. Abbreviated to.

The number of staff dedicated to the delivery of sofas also increased by around 60%. The company predicts that the number of sofas that can be delivered will increase by 75% from 4,000 units per month to 7,000 units per month due to the expansion of sofa storage space and increased labor for deliveries. Hyundai LIVART plans to expand its range of bed and living room service products early next year. In November (???), West Elm and Pottery Van Kids furniture from US home decor company Williams Sonoma will also be included in the “Delivery of Tomorrow” service.

Hanssem managed the “My Mom Delivery” service, which is a delivery date selection system from the previous July. Customers who buy furniture at their “Hanssem Mall” shopping center can freely select the delivery and construction date from a minimum of 1 day to a maximum of 30 days. At the start of the launch of the service, it was made for around 30 items, but to add to the speed battle of the furniture industry, the number of items was expanded to around 700 items. IKEA has recently reduced delivery times by introducing a “short distance delivery service”. It is a system that delivers delivery destinations within 20km of offline stores to all national branches from same day to next business day. If you order before 2pm, you can receive the product that day.

The reason the furniture industry is heating up in the “ Coupangbal Speed ​​Battle ” is that the online furniture market is growing rapidly due to the Corona 19 epidemic. In August, furniture purchase transactions online amounted to 153.8 billion won, up 56.1% over the same month last year. An industry insider said: “As a result of the crown, interest in interiors and furniture has greatly increased.” With the spread of the consumer trend not face to face, there is a shift in how furniture consumption is “you have to see and buy”. Another official said: “Looking at the precedent in the early morning delivery market, companies are responding faster to demand so as not to become laggards.”

Consumer response is also split in two. There is also an answer that “faster is cheaper” while “excessive”. Ji-Hyun Ji (31), who uses Rocket Wow, a Coupang subscription service, said: “In case of urgent daily needs or fresh food, rocket delivery is often helpful.” I don’t know if I need a delivery of bullets until now. ”

There are many tasks to be solved. Recently, Coupang has been in conflict with some companies due to the “ bad guy ” controversy requiring excessive price cuts and unfair trade. Coupang has increased its market share with customer service such as lower priced products and rocket delivery. In this process, some manufacturers claim to have damaged the company’s unit price. Household kitchenware company Clean Lap and toy and content company Young Ind. They are representative companies that ended their business in rebelling against Coupang’s frustration. A manufacturer official said: “As a small and medium-sized company where it is urgent to secure a sales channel, we want to join Coupang, but once we get in we are forced to drop the unit price excessively.

It is not just a small business. In June last year, LG H&H violated the “Fair Trade Act” by canceling orders and terminating transactions with the “Large Distribution Business Act”, such as the ban on the return of Coupang products, the ban on requests to supply economic benefits. and the ban on exclusive Coupang transactions was filed with the Fair Trade Commission. The FTC’s investigation into this matter has not yet been completed. LG H&H has not supplied any products to Coupang since then.

In response, Coupang said: “It is a negotiation process to provide customers with the products at the lowest prices and there is no problem.” The problem is that this sigh of the manufacturing industry can lead to the furniture industry. A furniture industry official said: “Unlike large furniture companies that have their own distribution platform, small and medium-sized furniture companies are delighted to implement Coupang’s rocket installation service immediately.” I just hope it won’t be broadcast. ”

Reporter Heo Jeong-yeon [email protected]