Costco Wholesale Corp, a big-box retail giant, has given up on its offline sales-only policy and begun dawn delivery services in South Korea as e-commerce is becoming the norm in the grocery retail market, according to sources familiar with the matter.
Since late May, the membership-only retailer has been delivering online orders worth more than 50,000 won ($40) to customers in Seoul and neighboring Gyeonggi Province for the first time in its 24-year history in the country.
With 16 outlets across the country, South Korea became the first country to launch the early morning delivery service among the 13 overseas markets where Costco operates stores.
In Texas, it started a similar service, or same-day delivery, in cooperation with Uber Technologies Inc. a US mobility service company.
“The move demonstrated Costco’s determination to expand its presence at the cost of profit margins,” a retail industry official said.
The delivery services are being provided in cooperation with CJ Logistics Corp., South Korea’s largest moving and delivery service provider.
Domestic e-commerce leaders such as Kurly Inc., Coupang Corp., and Shinsegae Corp.’s SSSG.COM have been stepping up efforts to take a bigger slice of the market of fresh produce and daily necessities, encroaching on Costco’s market share.