STARTUPS

Logistics serves as the backbone of the ecommerce industry. The delivery of online purchases within the same day or two days would not have been possible had there not been efficient logistics processes, which include inventory, packaging items for shipment, and handling returns.Jin-soo Park, the CEO of South Korean logistics startup Colosseum Corporation, said the gap between those commerce firms with advanced logistics solutions and those without them will continue to widen."Innovations in logistics services, rather than new products, are the driving force behind the growth of the global ecommerce industry," Park told The Miilk in a recent interview.“Legacy fulfillment firms relying only on space and human resources will likely face challenges from new market players focused on advancing logistics solutions and processes,” he added.The Nasdaq-listed Coupang will be a prime example supporting this point. Coupang has adopted the one-day delivery service by streamlining its logistics process and efficiently managing stocks based on data. Additionally, the company operates an easy return policy through which it accepts most return requests regardless of the conditions. Earning 26.6 trillion won ($20.9 billion) last year, it outraced most of the established retail companies, including Lotte Shopping. In terms of the transaction volume, it also outgunned online commerce businesses, including the web portal giant Naver, in the third quarter last year, recording 32.3 trillion won($25.3 billion).For legacy logistics firms, the storage and delivery of a relatively small number of items had traditionally been outside the scope of their business operations. Additionally, establishing and running facilities to handle different types of products had been deemed unprofitable, resulting in a lack of such services for commerce companies. However, with the increasing diversity of items sold on online platforms, the need to handle different items, even in small quantities, has grown. Logistics companies also need to directly operate special storage facilities or partner with cold storage companies for items that can be affected by temperature. The growing popularity of international ecommerce services further necessitate the need to establish a presence in global markets.Park said Colosseum has been striving to meet these needs for ecommerce companies while adopting the latest technologies to improve efficiency. Despite being a logistics firm, Colosseum does not own a single storage facility. Instead, it acts as an intermediary between storage facility operators and commerce firms nationwide, as well as in other countries, including the US. Colosseum's solutions enable storage facilities to handle a wide range of products in small quantities, and it deploys IT solutions to efficiently manage logistics centers, which are owned by its partners."