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Startups

Colosseum rises to e-commerce challenge with one-stop solution

By May 13, 2021 (Gmt+09:00)

Colosseum team 
Colosseum team 

Fulfillment companies are expected to enjoy sharp growth this year, thanks to the global e-commerce boom fueling demand for fulfillment services, which include managing, packaging and shipping products for e-commerce sellers.

According to the Korea SMEs and Startups Agency (KOSME), South Korea has become the world's fifth-largest e-commerce market, following China and the US. Also, the domestic fulfillment market is projected to stand at around 2.6 trillion won ($2.3 billion) this year -- although fulfillment startup Colosseum Corp. expects it to be larger.

“In New York alone, the fulfillment market is valued at 2.2 trillion won, meaning that Korea's fulfillment market is probably larger given the country's e-commerce growth rate," said Park Jin-soo, the founder and chief executive of Colosseum, in an interview with The Korea Economic Daily on May 12.

Colosseum is a fulfillment startup that utilizes big data and automated artificial intelligence technology to redesign the workflow for warehouses. The company offers an AI-powered one-stop solution that maps delivery data and recommends packaging size and delivery methods, streamlining the logistics process and improving efficiency.

Also, sellers can pair up with warehouses that best meet their needs through Colosseum's solution. For example, a seller who needs specialized packaging will be matched with a logistics center that offers a meticulous packaging process.

HOW IT ALL BEGAN

“I always knew that I wanted to become an entrepreneur, but I wanted to gain work experience to figure out what I wanted to do and how to do it," said Park, adding that his goal was to set up a company before he turned 40.

Park began his career at KTF, a former wireless subsidiary of the country's leading telecommunications carrier KT, working there for several years before departing for a media marketing agency where he eventually joined the management team.

Colosseum CEO Park Jin-soo
Colosseum CEO Park Jin-soo

His goal was to broaden his experience, which he believed would help him acquire a valuable skill set as an entrepreneur. During this process, he became interested in the expanding e-commerce market and realized there was promising growth potential in the fulfillment industry.

Luckily, Park was no stranger to the logistics industry given years of helping out at his father’s logistics company.

“It had been about 20 years since I worked in the logistics industry and even then the workflow seemed old-fashioned. I saw that after all these years, it remained unchanged despite the e-commerce boom," said Park, explaining that it seemed natural for the logistics industry to undergo similar innovative changes.

Confident that the fulfillment industry would flourish, Park founded Colosseum in June 2019 with two former KTF colleagues.

The startup first ran a beta service for a year and kicked off marketing and sales in the second half of 2020 to attract customers. Since then, the company has seen its client pool grow by 30 percent monthly.

Colosseum's clients include a wide range of sellers from corporates to individual sellers. The company's revenue model is based on taking a commission from the sellers for each package. The fee on average ranges between 3,000 won and 5,000 won.

HOW COLOSSEUM IS SHAKING UP THE LOGISTICS INDUSTRY

According to Park, what sets Colosseum apart from other fulfillment firms is its warehouse network. Instead of building new fulfillment centers, Colosseum partners with existing warehouses and their employees -- thereby creating a vast network of logistics centers nationwide offering on-demand services.

"We're not trying to compete with existing logistics centers. Instead, we want to use our fulfillment service platform to collaborate with them and to grow together," said Park.

Colosseum's one-stop solution saves fulfillment costs and time.
Colosseum's one-stop solution saves fulfillment costs and time.


According to Park, fulfillment companies often deal with overwhelming demand in the e-commerce market by establishing new centers or bringing in new workers. But Colosseum's approach is to address the issue of space, people and demand via collaboration and smart technology.

The company aims to make valuable use of data it collects from processing around 50,000 to 60,000 packages monthly.

"We're working on utilizing the data to increase efficiency for our sellers and warehouse partners as that will eventually determine whether we remain as a third-party fulfillment service or a promising startup," said Park.

The company is eyeing overseas expansion into emerging markets such as Vietnam, Indonesia and Africa as those markets are expected to experience a similar growth trend in e-commerce, meaning there will be high demand for automated solutions that improve logistics workflow.

Meanwhile, Colosseum will be concluding its pre-A funding round this month. The company is planning a Series A round at the beginning of next year.

Write to Danbee Lee and Elaine Jiwon Kim at dblee@hankyung.com

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