[비즈한국] ‘The offensive concentrated on Baemin (Baedal Minjok)’. This is the common sentiment regarding the differing levels of scrutiny from politicians and the public directed at Baemin, CoupangEats, and Yogiyo amid the controversy over delivery platform fees sparked by the dual pricing system.
Baemin, the Sole Delivery Platform Called to Parliamentary Audit
Ham Yun-sik, Vice President of Woowa Brothers, the operator of Baemin, appeared as a witness at the National Assembly's National Policy Committee audit of the Korea Fair Trade Commission held on the 21st. The committee members stated that their objective was to examine the situation surrounding the burden of delivery platform fees on small business owners, including the issue of dual pricing.
The controversy began with Baemin's fee hike plans. In 2021, Baemin charged a flat fee of 1,000 KRW per delivery, but starting in January 2022, it introduced a commission-based system, taking 6.8% of the food price. Then, in August, it announced an increase to 9.8%, matching the rate charged by Coupang Eats. However, as small business owners pushed back and several franchises introduced a "dual pricing system"—where delivery prices differ from in-store prices—criticism of delivery platforms intensified. This is why delivery platforms were summoned to the national audit once again.
However, Coupang was excluded from the list of witnesses for the audit that day. Initially, the National Assembly's National Policy Committee had intended to call Coupang CEO Kang Han-seung as a witness, but the attempt was blocked by opposition from ruling party lawmakers.
The Only Profitable Company Among the Three
Although four government agencies, including the Fair Trade Commission, are operating a win-win consultative body with delivery platforms and participating merchants, public attention remains heavily focused on Baemin. During the 6th meeting of the consultative body held on the 8th, Baemin proposed a plan to reduce fees for merchants with lower delivery revenue. The proposal suggests maintaining the 9.8% fee for the top 60% of merchants by revenue over the next three years, while applying a differential rate of 6.8% for those in the 60-80% bracket.
However, this proposal only met with backlash from merchant organizations participating in the consultative body, such as the Korea Federation of Micro Enterprise and the National Franchise Owners Association.
The other platform companies have not exactly been proactive either. Coupang Eats had not proposed any fee reduction plan as of the 7th meeting held on the 14th, and Yogiyo, which already applies a differential fee structure, merely proposed a plan to provide a portion of the fees paid by lower-revenue merchants back as points to be used for advertising expenses.
As of last month, the market share of the three companies—Baemin, Coupang Eats, and Yogiyo—stands at 59%, 24%, and 14% respectively, totaling 97%. Critics point out that even though industry leader Baemin is actively proposing plans by reviewing models from other companies, it is the one bearing the brunt of the criticism.
An industry official analyzed, "It is true that Baemin is the industry leader, but because it is the only one among the three to record significant earnings (a net profit of 506.2 billion KRW), it seems to be receiving more criticism than the other two platforms. Given the current fee levels, Baemin is not charging excessively compared to Coupang Eats or Yogiyo, but it faces more criticism from politicians and the public simply because the parent company of the No. 1 player is German."
'Blaming Baemin' for the Dual Pricing Controversy
There was also a clash between Baemin and Coupang Eats over the dual pricing controversy, which stems from the burden of delivery fees. Coupang Eats took a jab at Baemin, suggesting that the responsibility for franchises like McDonald's or Lotteria setting delivery prices 500 to 1,500 KRW higher than in-store prices lies with Baemin's commission burden.
When Coupang Eats attacked, saying "The dual pricing system is the competitor's (Baemin's) fault," Baemin retorted that this "distorted the facts" and hinted at possible legal action. Baemin argued, "The brokerage fee paid by owners is 9.8%, and the delivery fee borne by the owner is 2,900 KRW (based on Seoul rates), which is identical to our competitor. Coupang Eats is distorting the facts by conflating 'Baemin Delivery' (where Baemin riders perform the delivery) with 'Store Delivery' (where owners contract with delivery agencies themselves)."
Some analyze this as a strategy by delivery platforms to keep the No. 1 player, Baemin, in check. An industry official interpreted the situation, saying, "Considering the labor costs involved in delivery, costs are bound to be passed on to the consumer to some extent, and franchises are separating prices to compensate for this. It is regrettable that only the 'profit-seeking of platform companies' is being scolded. Is it not the case that these companies are resorting to finger-pointing marketing strategies to minimize criticism of themselves while simultaneously trying to improve their own corporate image?"