A pick and pack (PP) center is the heart of one-day or same-day delivery services. The center is normally located inside or right next to an affiliated mega-mart or a logistics warehouse. Workers pick and pack ordered products before putting them into a sorter that distributes parcels to delivery trucks. Shinsegae operates PP centers at some 110 Emart stores.
The demand for one-day or same-day delivery services surged in 2020 due to a coronavirus pandemic that prompted people to shop through online malls instead of visiting crowded stores. South Korea's online shopping market is projected to increase from 161 trillion won ($136.6 billion) in 2020 to 211 trillion won in 2022, according to the Korea On-Line Shopping Association.
SSG.com said in a statement on November 4 that it would greatly increase the processing capacity of its same-day grocery delivery service by upgrading each PP center to have a processing capacity of up to 3,000 deliveries a day. Currently, the PP center processes a daily average of about 500 deliveries.
"We will establish more than 70 large PP centers across the country by 2025 to increase our daily delivery capacity to 360,000 from the current 140,000," SSG.com's supply chain management director Ahn Cheil-min was quoted as saying. The move is aimed at catching up with Coupang which offers some 6,000 kinds of items for one-day or same-day delivery services from 150 logistics warehouses that serve as PP centers in 30 cities.
Coupang has revealed plans to inject 1.1 trillion won to build seven more large warehouses. While Coupang heavily relies on human work, SSG.com adopts automated facilities. A large SSG.com PP center in Icheon some 51 kilometers (31 miles) southeast of Seoul has upgraded its facility with new automated sorters to boos its daily processing capacity from 450 parcels to 3,000.
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