[비즈한국] Competition in the dawn delivery market is intensifying. As TeamFresh, the industry's number one market share leader, recently suspended operations due to financial difficulties, other logistics companies are moving to exploit the gap. Kakao035720 Mobility, which is looking to venture into new businesses, is also eyeing the dawn delivery market. With its flagship taxi-hailing service reportedly entering a period of stagnant growth, industry interest is focused on how much Kakao Mobility can strengthen its competitiveness in the logistics and delivery sector.
Building Logistics Competitiveness: Kakao Mobility Expands Dawn Delivery
An individual named Lee felt a great deal of anxiety after confirming news in April that the dawn delivery company 'TeamFresh' was ceasing operations. Lee had been receiving weekly dawn deliveries through a subscription from an online grocery seller, and TeamFresh was the company responsible for the deliveries. As feared, the grocery company Lee used announced a temporary suspension of dawn delivery, and the products Lee ordered were delivered via standard parcel delivery instead.
The groceries, which had been arriving via parcel delivery for nearly a month, were recently switched back to a dawn delivery method. The delivery operator was changed to Kakao Mobility. Lee said, "I am receiving products through the 'Kakao T Same-Day Delivery' service. This was the first time I learned through this experience that Kakao T also performs dawn deliveries."
Since TeamFresh's service suspension, Kakao Mobility has been increasing its presence in the dawn delivery market. As client companies that had partnered with TeamFresh scrambled to find new dawn delivery providers, Kakao Mobility has achieved success in signing on new, large-scale clients.
In April, the dawn delivery company 'TeamFresh' suspended its services due to issues with delayed settlements. TeamFresh is known to have held over 90% of the market share in the dawn delivery sector, with approximately 6,000 client companies. TeamFresh recently stated that it could resume services as the delayed investment funding was secured. However, many clients had already signed contracts with other logistics firms.
Kakao Mobility, which operates the 'Kakao T Same-Day Delivery' service, has also gained momentum in securing new clients since April. Kakao Mobility announced that it has secured new partners such as Pulmuone017810 and Dongwon F&B’s ‘The Banchan’ following the TeamFresh crisis. A Kakao Mobility official stated, "Since April, we have received continuous inquiries from new shippers. However, it is difficult to disclose details as some shippers are uncomfortable with revealing contractual relationships."
Kakao Mobility entered the same-day and dawn delivery markets in 2022 by acquiring the logistics startup 'Today's Pickup.' However, its presence in the market was not significant. Because it only provided services in the capital region, including Seoul, Gyeonggi, and Incheon, there were clear limitations to acquiring clients. Industry experts analyze that because companies providing related services have been downsizing their operations due to the worsening profitability of dawn delivery, it would have been difficult for Kakao Mobility to pursue aggressive investments in the sector.
It seems that Kakao Mobility’s dawn delivery competitiveness, which had remained at a standstill for several years, has entered a reorganization mode following the void left by TeamFresh. Kakao Mobility announced that it is expanding its service area, which had previously been concentrated in the capital region, to the Chungcheong region for the first time.
The aforementioned official explained, "We began setup work for the expansion into the Chungcheong region starting in April, and we are currently providing services there. We are consistently reviewing further service area expansions, though nothing specific has been finalized regarding additional regions yet."
Legal Battles with KFTC Continue, Taxi-Hailing Growth Slows
Celebrating its 10th anniversary this year, Kakao Mobility has grown based on its taxi-hailing brokerage service. It introduced a service to easily call taxis via an app in 2015, pioneering the taxi brokerage market. Currently, Kakao Mobility's market share in taxi-hailing is estimated to be 94%.
However, it faces significant pressure as a market-dominant operator. It has long been in conflict with the taxi industry and has received orders from regulatory authorities to pay tens of billions of won in fines. Legal battles are also ongoing.
The Fair Trade Commission (KFTC) judged that Kakao Mobility manipulated its dispatch algorithm to engage in "call favoring" for its affiliated taxis, imposing a fine of 27.1 billion won in 2023. Kakao Mobility filed an administrative lawsuit challenging this decision, and in May, the court ruled to cancel the fine. The KFTC intends to appeal the court's ruling. A KFTC official stated, "We have not yet filed the appeal, but we plan to do so after going through internal procedures."
Last year, the KFTC also imposed a 15.1 billion won fine on Kakao Mobility for obstructing calls from competitors. Kakao Mobility filed an administrative lawsuit in November of the same year and is currently awaiting a second-instance judgment. Last month, it was decided that KM Solution, the franchise headquarters for Kakao Mobility’s affiliated taxi service 'Kakao T Blue,' would be fined 3.882 billion won for violating the Fair Franchise Transactions Act. Kakao Mobility stated, "We are currently preparing for an administrative lawsuit."
Amidst ongoing regulatory risks, the growth of the taxi-hailing business is also slowing. The revenue of Kakao Mobility’s platform service division, which includes mobility services, was 426.4 billion won last year, a 13% increase from the previous year. While Kakao Mobility's platform service growth rate was 75% in 2021 and 49% in 2022, it fell to 19% in 2023 and further dropped to 13% last year.
Kakao Mobility is striving to diversify its taxi-hailing-centric business structure. Recently, it has been investing in robots and autonomous driving, but these are in the early stages and tangible results are minimal. While there are moves to increase competitiveness in the logistics sector by expanding investment in dawn delivery, there are concerns that the chronic issue of profitability in dawn delivery services could hold the company back.
A Kakao Mobility official said, "We have consistently worked to conveniently provide various services related to the movement of people and objects through Kakao T. We will continue to do our best to provide various mobility services and coexist with the industry."