Korean firms aim to turn gas stations into fulfillment centers

SEOUL, Dec. 23 (UPI) -- South Korean companies announced plans to turn urban gas stations into mini logistics hubs to meet increasing delivery sector demand, especially in big cities.

Korea's giant refinery entity SK Energy announced Friday that it agreed to a partnership with the country's tech giant Naver, Korea's largest internet portal site and a company with cutting edge know-how in artificial intelligence.

Under the agreement, Naver will tap SK Energy's vast network of gas stations to double as micro fulfillment centers for its e-commerce business.

Naver is in fierce competition with local rival Coupang, a company that boasts listing on the New York Stock Exchange, for Korea's online retail market.

The company said that its goal was to further develop AI and robotics technologies for better, more efficient logistics services for customers.

The partnership will begin pilot testing over certain areas of Seoul next year then expand from there to other the territories covered by SK Energy gas stations.

SK Energy currently runs more than 3,000 gas stations across the nation.

"The alliance will focus on automating logistics procedures and improving the capacity to predict demand using AI technologies," Naver senior official Lee Yoon-sook said in a statement.

The share price of Naver was down 3.52% Friday on the Seoul bourse. SK Innovation, the parent company of SK Energy, also saw its stock price dip 3.58%.

"The faster and affordable logistics services become more important as competition gets stiffer among online retailers," Seo Yong-gu, a professor of business administration at Sookmyung Women's University, told UPI News Korea.

"In other words, the last-mile service is going to be crucial for all of them. As such, corporations are going to great lengths to improve logistics that could give them the edge over their rivals," he added.