HL Holdings, Veluga Brewery to digitalize Korean liquor market

HL Holdings Corp., a major South Korean automotive parts logistics specialist with a three-decade history, has joined hands with Veluga Brewery Inc., a Korean startup pioneering a liquor wholesale platform, to make the country’s alcoholic beverage logistics market smarter.

The two companies plan to launch the online alcoholic drink fulfillment service TIDES, which would be the first of its kind in Korea, in the third quarter of this year, Kim Sang-min, founder and chief executive officer of Veluga Brewery, said during an interview with The Korea Economic Daily last week.

HL Holdings will transform its cold-chain logistics center in Dongtan, Hwaseong-si, Gyeonggi Province into the country’s first liquor fulfillment center, which will be managed and operated by Veluga Brewery’s software.

The cold-chain logistics center with a floor area of 102,574 square meters is Asia’s largest cold-chain center, capable of one-stop logistics services from customs inspection to cold-chain transportation and delivery.

The launch of TIDES is expected to accelerate the digitalization of the Korean alcoholic drink distribution market, which still relies heavily on the outdated order and delivery system. The market is currently dominated by only a handful of local logistics companies that forward alcoholic beverage orders to wholesalers after receiving them from suppliers.

“The new service powered by data-driven demand forecasting and shipping optimization will be a game changer in the liquor logistics market,” said Kim.

UNPRECEDENTED FULFILLMENT SERVICE  

TIDES will provide smart fulfillment services for alcoholic drinks, including just-in-time demand forecasting, separated or consolidated shipping, an inventory management program and cold-chain storage and delivery services.

This is expected to help reduce spirits' import costs based on accurate demand forecasting and a simplified delivery system.

Veluga Brewery, founded in 2017, operates an alcoholic beverage retail platform, which has allowed it to build extensive data on the Korean liquor market supply chain, covering spirit production and import to their wholesale and retail businesses.

Its platform is currently used by about 10,000 retail stores, more than 300 suppliers and over 400 wholesalers across Korea.

Using clients’ order and purchasing records, Veluga Brewery provides demand forecasting data, as well as target marketing and order management services.

The platform is a software-as-a-service (SaaS) subscription service, providing end-users a sales lead data categorized by gender, age, commercial district, liquor type and brand product, which is useful in demand projection and customized marketing campaigns, Kim said.

With TIDES, HL Holdings will expedite its advance into the alcoholic shipping market as part of its efforts to diversify its logistics business.

TIDES will ship and deliver products directly to retail stores after receiving orders placed by retailers on Veluga Brewery’s platform. It will also handle the entire import and delivery process of alcoholic beverages based on drink information provided by importers or producers.

With the new service, the two partners hope to create an unprecedented e-commerce ecosystem for alcoholic drinks in Korea that can guarantee Coupang-like fast delivery and a Taobao-like service for a vast selection of spirits, said Kim.

Write to Lan Heo at why@hankyung.com

Sookyung Seo edited this article.