Coupang Eats' scary chase... 'No. 1' Baemin falls below 60% market share

[Korea Financial Times, Park seulgi] The domestic delivery app market is changing. Coupang Eats has risen from 3rd to 2nd place in the industry and is now threatening the number one delivery app, Baedal Minjok. Baemin's share of the delivery app market has fallen below 60 percent in just two years. Meanwhile, Coupang Eats is growing its presence by recording the largest number of users ever.

According to the app/retail analysis service WiseApp, Retail, and Goods on the 5th, Baedal Minjok accounted for 58.7 percent of the delivery app market as of August this year. After falling below 60 percent to 59.2 percent in June, it rebounded slightly to 59.4 percent in July, but fell again in a month. Baedal Minjok had maintained a steady share of 61-62% since breaking the 60% mark in September 2022.

Over the same period, 2nd place in the industry Coupang Eats's share is 22.7%. Coupang Eats, which was in the low teens until May last year, has been on a growth spurt, doubling its share in April after launching free delivery. The number of users reached a record high of 8.79 million.
Baemin also recorded its largest user base ever with 22.76 million users, but the rapid rise of Coupang Eats is not something to celebrate.

With a market share of more than 50%, Bae Min may not be worried, but it's a dangerous situation in the capital region, where delivery demand is high. While specific numbers are not available, it is estimated that Bae Min and Coupang Eats are neck-and-neck in the metropolitan area.

Coupang Eats has gained significant market share, starting with a 10% discount on delivery fees last year and introducing free delivery this year. In the process, Yogiyo, the industry's No. 2, has slipped to No. 3, and No. 1 Baemin has been busy fending off challengers.

To add insult to injury, Baemin was forced by its parent company, DeliveryHero (DH), to raise its brokerage fee in July. The company's 6.8% fee was the lowest in the industry, but now it's 9.8%, the same as Coupang Eats. This means that merchants will have to pay 10.8% in value-added tax. Furthermore, delivery fees are not included.

The advantages of Baemin, such as the lowest fees, high occupancy rate, and various plans, are fading away. As a result, some store owners say, “Why do we need to use Baemin?”
In this regard, a delivery industry insider said, “Baemin must have anticipated the drop in market share to some extent when they took out the fee increase card.” “Even if the market share drops, the strategy of increasing profitability will not change,” he said.

However, the burden on small businesses has increased as the economy has not improved, and the burden on consumers to choose Baemin, such as charging packaging fees and introducing paid memberships, has also increased, creating antipathy.

In this situation, Yogiyo, which had been creating a three-way structure in the industry, recently received voluntary retirement. Due to the continuous deficit, it has become urgent to improve performance through manpower efficiency. The competition in the industry has narrowed from the three-way structure to the two-way structure, and the bleeding competition is expected to intensify.

Some people predicted that Coupang would raise Wow membership fees, which would lead to an “ex-Coupang” phenomenon. However, there was no major rush to leave. Despite the nearly 60% increase in paid membership prices, the monthly payment estimate reached an all-time high of 4.9054 trillion won last month. Compared to the same period last year, the figure rose by 27%.

"Wow rates have risen to 7,890 won, but consumers who have decided to maintain their subscriptions are highly likely to make the most of linked services such as Coupang Eats and Coupang Play," a delivery industry official said. "Since both companies provide free delivery, there is a lack of incentives to continue using Baemin."

Park seulgi (seulgi@fntimes.com)