[Edaily Reporter Han Jeon-jin ] “Even when e-commerce platforms competed with same-day and early-morning delivery, customers still had to place their orders in advance. But situations like running out of eggs while cooking ramen always happen without warning. Quick commerce (instant delivery) is what immediately fulfills that kind of spontaneous demand.”

Jeon Jin-hyuk, Head of the O4O (Online for Offline) Division at GS Retail(007070), made these remarks during a recent interview with Edaily, noting that the center of gravity in retail competition is shifting toward quick commerce. O4O is a strategy that connects online and offline customer experiences to enhance store competitiveness, with quick commerce serving as its core pillar. GS Retail is aggressively expanding its quick commerce business by utilizing GS25 and GS The Fresh stores nationwide as logistics hubs. Jeon, who oversees GS Retail’s O4O strategy, predicted, “Quick commerce is a sector with inherent business model competitiveness,” adding, “It is highly likely that quick commerce will become the next battleground following next-day and early-morning delivery.”

GS Retail responded to this trend early on, upgrading its “Quick Commerce Office” to the “O4O Division” last year. The organization, which had previously focused solely on expanding delivery and pickup services, has expanded its scope to encompass everything from the planning and operation of its proprietary app, “Our Neighborhood GS,” to the leading smart order platform for alcohol, “Wine25 Plus,” and company-wide O4O strategy planning. The division head explained, “We are now working to integrate online and offline channels to design the customer experience itself.”

GS Retail’s key asset is its network of approximately 18,000 GS25 and GS The Fresh stores nationwide. Unlike e-commerce models based on logistics centers on the outskirts of cities or “dark stores” that require separate facilities, GS Retail can leverage its existing offline infrastructure directly. In particular, the catchment area of stores—which was previously limited to walking distance—is expanding to a radius of several kilometers through quick-commerce services. Jeon, the division head, said, “We can significantly expand our catchment areas while using our existing stores as hubs,” adding, “Globally, few operators generate profits solely through quick commerce, but our structure requires minimal additional investment, so we are already turning a profit.”

The results are also impressive. Cumulative orders for GS Retail’s quick-commerce service, launched in 2021, surpassed 45 million this month. Last year alone, the service recorded over 15 million orders, a 37% increase from the previous year. The average order value is approximately 37,000 won, more than five times that of offline stores (about 7,000 won). Product offerings and store operations are also changing. Convenience stores have expanded their selection of fresh foods, such as small-packaged fruits and vegetables. Some GS Holdings company-owned stores are also testing a quick-commerce-exclusive inventory management system focused on products with high demand for immediate delivery, such as refrigerated foods and meal kits.

Another pillar of growth is the “multi-platform” channel strategy. GS Retail is pursuing a strategy of establishing a presence not only on its own app but also on major platforms such as Baemin and Coupang Eats. Jeon said, “Customer characteristics and purchasing purposes differ by channel,” adding, “Coupang Eats has a high proportion of Namsung in their 20s and 30s, while Baemin has many female users. Naver sees strong demand for grocery shopping.” He continued, “Rather than relying on a specific platform, it’s important to secure a diverse customer base,” adding, “Broadly attracting users across various channels is the key to competitiveness in quick commerce.”

Of course, as the company utilizes multiple channels, reducing dependence on external platforms remains a challenge to be addressed. This is why GS Retail is focusing on strengthening the competitiveness of “Our Neighborhood GS” this year. Currently, “Our Neighborhood GS” ranks first in the convenience store industry with approximately 4 million monthly active users (MAU) and serves as the centerpiece of GS Retail’s O4O strategy. Jeon, the division head, is considering enhancing the “My Fridge” feature—a “buy one, get one free” product storage service—and introducing new services that incorporate fun elements, such as games. This strategy aims to increase customer dwell time and visit frequency.

Jeon identified the essence of O4O businesses, including quick commerce, as “connecting the customer experience.” He stated, “It’s not about what’s good for us as suppliers; it’s about making it as convenient as possible for the customers using the service,” adding, “The core of O4O is creating a structure where demand generated online flows seamlessly to offline and back to online.” He further emphasized, “Our goal is to become the number-one O4O platform that customers turn to first within their local communities—surpassing even the company with the highest quick-commerce sales—within three years.”