Revived Daiso Same-Day Delivery: Is a 5,500 Won Delivery Fee Competitive?
Daiso's same-day delivery service has been revived since March. Daiso announced the launch of its "Today Delivery" beta service in parts of Gangnam, Seocho, and Songpa districts. With this addition, Daiso now offers five delivery options including parcel delivery, store pickup, regular delivery, bulk orders, and same-day delivery.
Daiso's Today Delivery service allows customers to receive their orders within 4 hours. The service is available for orders placed between 9 AM and 5 PM, and operates on weekends and holidays as well.
To place an order, customers must first access Daiso Mall. In December 2023, Daiso integrated its two e-commerce channels, Daiso Mall and Shop Daiso, into a single Daiso Mall platform, which is accessible via both web and app.
Users select their desired products on Daiso Mall and choose the Today Delivery option. The minimum order amount is 15,000 won, and the maximum weight per order is 10kg. Products that are bulky or heavy may be delivered in multiple shipments. The Today Delivery fee is a flat rate of 5,500 won. If you're wondering whether this is too expensive in an era where free delivery has become standard, we'll address this question later in the content.
After payment, a nearby Daiso store prepares the products, which are then picked up and delivered by a delivery partner's rider. This is essentially motorcycle-based delivery. Customers receive a KakaoTalk notification when the delivery leaves the store, providing visibility.
If a customer wants to exchange or return an item, they must visit the designated store in person. Exchanges are not possible, and returns can only be processed through the return barcode provided in the app. Regular Daiso customers might think, "Daiso isn't usually strict about exchanges and returns..."
This is because Daiso manages integrated inventory between offline stores and online logistics centers for Daiso Mall sales. In other words, in-store pickup and Today Delivery services would be impossible without linking store inventory to the online Daiso Mall.
Additionally, processing returns and exchanges online, or handling exchanges in-store, could generate an unmanageable number of errors, which this policy likely aims to prevent. You can find more details about Daiso's omnichannel strategy in the Connectors content below.
Why Has the Discontinued Same-Day Delivery Service Returned?
As mentioned earlier, this is not Daiso's first attempt at same-day delivery. As introduced in the Connectors content above, Shop Daiso offered same-day delivery services to certain areas before the Daiso Mall integration. Why has this discontinued service now been revived?
First, Daiso can operate delivery options utilizing nationwide stores thanks to inventory integration and the hard work of store employees. By transitioning most in-store payments to kiosk-based systems, employees can now focus on inventory management, display, and responding to online orders.
In this case, store pickup and Today Delivery use the same packaging method. A Daiso store employee explained that for motorcycle-based quick commerce (unlike parcel delivery), products can be placed in shopping bags and secured with tape or staples, allowing for sufficiently stable delivery.
Based on this, we can speculate that Daiso's same-day delivery service revival emerged through these stages:
Since Daiso stores nationwide have been operating store pickup services quite stably, they decided to start a Today Delivery beta service in limited areas by connecting the same business process with delivery agencies. This way, Daiso stores can respond to orders the same way whether they come in as store pickups or Today Delivery orders. The rest of the process is handled by the delivery riders.
Of course, this doesn't completely explain why the discontinued same-day delivery service has returned. There are Daiso services suitable for same-day delivery connected to this, which we'll discuss in "Connectors' Thoughts" later.
Delivery Fee of 5,500 Won?
The issue is the Today Delivery fee. The basic fee is fixed at 5,500 won with no discount options based on order amount. This is virtually the same amount as when Daiso previously operated its same-day delivery service.
At that time, Daiso entrusted delivery within 21 hours to same-day delivery companies, while delivery within 2 hours of ordering was handled by delivery agencies. The difference is that same-day delivery companies gather shipments at designated hubs and deliver them collectively along delivery routes (like parcel delivery), while delivery agencies pick up orders (either single orders or accumulated volumes) at relatively short intervals and deliver them immediately, similar to food delivery.
The newly launched Daiso Today Delivery beta service is coordinating with delivery agencies. It's based on rider pickup from stores, but the maximum delivery time has been extended from the previous 2 hours to 4 hours.
Reactions in news article comments and communities have been quite negative. Many responses were like, "I have to pay 5,500 won delivery fee to order 5,000 won products? Isn't that too expensive?" This seems to be influenced by recent food delivery apps adopting free delivery as their basic marketing strategy, increasing resistance to delivery fees.
Nevertheless, Daiso is maintaining its 5,000-won range delivery fee, just as it did during its previous failed same-day delivery service. Of course, this is still a pilot service.
The same-day delivery and delivery agency industry believes that Daiso is likely to maintain the current delivery fee going forward, unless there is dramatic revenue from same-day delivery. We'll continue discussing the reasons in Connectors' Thoughts.
CONNECTUS' Thoughts
According to same-day delivery and delivery agency industry insiders, the biggest reason Daiso previously discontinued its same-day delivery service was profitability. Without a separate MFC (Micro Fulfillment Center) like CJ Olive Young, Daiso utilized its stores as substitutes, resulting in significant variations in product types and inventory situations across stores. Since the products themselves are primarily affordable, value-oriented items, the margins were not good when connected with same-day delivery.
To overcome this, Daiso has been taking steps one by one. They've successfully achieved efficiency through continuous product development and additions, online and offline inventory integration, improved store operations, and online order response. However, overcoming these upstream inefficiencies doesn't mean they can charge less for same-day delivery fees. Industry insiders say that considering the low prices of Daiso products along with their various sizes and weights, the current 5,000 won range is likely the minimum threshold for securing margins.
So, can Daiso's same-day delivery service sell well? Who exactly are the target consumers? Regarding this, we heard a very interesting story from a current Daiso store employee. Daiso's main customers are broadly divided into two types. One consists of customers who enjoy visiting stores and browsing various products. These customers typically have relatively low purchase volumes or unit prices compared to the time they spend in the store.
The other type consists of bulk purchasers. According to the Daiso employee, apart from inquiries about whether specific products are in stock, they frequently receive calls asking "Is parking available?" or "Are there parking spaces available now?" These are mainly family units who come with vehicles to purchase products in bulk. In particular, the Gangnam, Seocho, and Songpa areas where Daiso's Today Delivery beta service has started have relatively many family unit customers with sufficient purchasing power, which might be aimed at finding new delivery demand.
Related to this, Daiso's Today Delivery has the characteristic of gathering inventory from multiple Daiso stores for delivery while charging a flat rate of 5,500 won. For customers who want to bring vehicles for bulk purchases, there's no greater stress than finding out the store doesn't have the desired product in stock. Today Delivery prevents this while offering a flat-rate delivery fee and the opportunity to purchase products that exist only in stores but not on the online Daiso Mall, making it a considerable option.
In summary, despite the relatively expensive delivery fee, Daiso is looking for new customer demand that requires delivery within 4 hours. In line with this, they are also steadily developing items suitable for same-day delivery, such as smartphone SIM cards, beauty products, and health functional foods. SIM cards and beauty products, in particular, are already demand-proven products through other same-day delivery services, including Olive Young. By combining this with one of Daiso's customer characteristics—bulk purchase demand—they can create new sales. In the following content, we will return with an interview with Daiso's Today Delivery partner company.
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