Recently, alliances among companies have been actively formed in various sectors within the distribution industry to constrain the leaders in each field. A notable example is Baedal Minjok and Naver (NAVER), which are securing allies in commerce and over-the-top (OTT) services to prevent Coupang from dominating and breaking sales records.
In the cinema industry, mergers among companies are being pursued to counter CGV, and in the beauty industry, Emart and others are working to restrain Daiso, which is establishing an independent domain with 'ultra-low-cost cosmetics.' As the economic downturn slows growth in the domestic market, competition for market share among companies is intensifying, according to analysts.
According to the distribution industry on the 21st, Baedal Minjok (Baemin) plans to launch a new product next June that includes an OTT service subscription for TVING in its Baemin Club membership, in collaboration with CJ ENM. This will be the first time that OTT service benefits are introduced to Baemin Club.
Baemin is also expanding into the quick commerce sector through a partnership with Homeplus. By ordering fresh and non-fresh goods from Homeplus through the Baedal Minjok application, customers can receive their deliveries within one hour. This service has been tentatively implemented in four Homeplus stores, including Gangdong and Sindorim in Seoul and Dongnae in Busan, with plans to increase depending on performance.
Baemin's moves are aimed at constraining Coupang. Coupang has solidified its number one position in the market with its powerful logistics infrastructure and 'Rocket Delivery' service, and it is estimated to currently have about 15 million paid subscribers. Coupang offers its members free OTT service through 'Coupang Play' and provides delivery with no charge when orders are placed through the Coupang Eats delivery app.
Baemin also launched a paid subscription service last September in response to Coupang, but so far, the benefits have only focused on delivery fee discounts. Baemin plans to counter Coupang Play with its partnership with TVING and respond to Coupang's Rocket Delivery with the expansion of its quick commerce service. A Baemin official noted, 'We will continue to enhance the benefits of Baemin Club subscriptions by partnering with various services in commerce and digital content.'
Naver, which is competing with Coupang in the e-commerce field, is also expanding its allies. This year, Naver plans to feature Kurly on its shopping platform, Naver Plus Store, to bolster its fresh food competitiveness. The industry views this as a strategy aimed at Coupang's 'Rocket Fresh.'
Additionally, Naver recently started delivery and pickup services for convenience store CU through its 'Now Delivery' service in Naver Plus Store. Consumers who purchase more than 10,000 won at CU stores within a 1.5 km radius will receive delivery service for 3,000 won, and those purchasing over 20,000 won will get a 3,000 won discount coupon, effectively eliminating the delivery fee. Naver stated, 'Starting with CU, we will strengthen our quick commerce sector by collaborating with various partners.'
Alliances among corporations are also appearing in the theater industry. Lotte Cultureworks and Megabox Central, which operate the second and third largest cinema chains, Lotte Cinema and Megabox, respectively, recently signed a memorandum of understanding (MOU) for corporate mergers. This is in response to the industry's top player, CGV, amid difficult market conditions.
Last year, the combined revenue of Megabox and Lotte Cinema was only 800 billion won, while CGV generated nearly 2 trillion won. However, if adding the number of screens operated by both companies (Lotte Cinema 915, Megabox 767), the total reaches 1,682, surpassing CJ CGV (1,346 screens) in first place. The two companies expect to generate synergies in content joint investment and distribution through the merger, which should reduce duplicate investment.
Emart has also recently begun selling ultra-low-cost cosmetics in partnership with LG H&H. This move is aimed at restraining Daiso, which is building an independent domain in the relevant sector.
Since last month, Emart has launched exclusively in its stores a new skincare line, 'Glow: Up by Beyond,' from LG H&H's beauty brand 'Beyond,' selling eight new products that claim to improve skin elasticity and radiance for 4,950 won each. An Emart official stated, 'We will continuously expand our ultra-low-cost cosmetics lineup.'
The industry forecasts that the number of such alliances among companies will gradually increase. Professor Seo Yong-gu from Sookmyung Women's University noted, 'During times when the domestic market is thriving, companies can focus on growth over competition, but in times of economic downturn like now, the competition for market share over a limited pie inevitably intensifies. The increase in partnerships among companies with aligned interests is due to this reason.'