[비즈한국] Baemin (Baedal Minjok) and Cheogajip Seasoned Chicken are pushing to extend their 'Baemin Only' pilot program. When 'Baemin Only' was introduced last February, franchise owners and civic groups filed complaints with the Fair Trade Commission (FTC) regarding the exclusive entry structure, but Baemin appears to be continuing the experiment despite the controversy. Industry insiders suggest that with intensifying competition among delivery apps, Baemin may be resorting to a strategy that carries significant burden just to defend its market share. Some also speculate that this move is tied to the recently rumored sale of Baemin by Delivery Hero (DH).
Baemin Only 'Season 2' Pushed Forward… Extension Notice Sent Despite Owner Opposition
Baemin and Cheogajip Seasoned Chicken are in discussions to extend their 'Baemin Only' promotional pilot program by three months. The plan is to extend the operating period, originally scheduled to end on May 8, to August 8. However, the final extension will be confirmed after going through a consent process with franchise owners. Korea 153, the operator of Cheogajip Seasoned Chicken, announced that it would be collecting extension consent forms from franchise owners until the 14th.
As of the 12th, the consent rate among owners was confirmed to be 65%. It is known that Baemin initially requested participation from over 90% of owners, but Korea 153 maintains that they will proceed with the extension if they secure consent from over 80%. A Korea 153 official stated, "The target consent rate is 80%. We expect it to be at a similar level to the first pilot operation."
Last February, Korea 153 and Woowa Brothers signed a business agreement and began the Baemin Only pilot. 'Baemin Only' is a promotion where participating franchises agree to operate exclusively on Baemin, without using competing delivery apps like Coupang Eats or Yogiyo. For participating franchises, the brokerage fee is reduced from the original 7.8% to 3.5%. It is reported that about 1,100 out of the 1,200 Cheogajip Seasoned Chicken franchises nationwide have participated.
Baemin Only has faced constant noise since the beginning of its operation. Critics have pointed out that since the structure excludes owners from discounts and promotional benefits within the app if they do not agree to the exclusive entry, franchise owners fearing a drop in revenue have effectively been forced to participate.
Opposition from franchise owners has continued during this extension process as well. The Cheogajip Seasoned Chicken Franchise Owners' Association recently released a statement expressing their opposition to the extension. The association claims that since participating in Baemin Only, orders from Baemin have not been enough to offset the loss in revenue from Coupang Eats, leading to a decline in sales for some locations.
One franchise owner stated, "Even though my store is in the top 100 in terms of sales, revenue dropped by about 7 million won in March and about 10 million won in April compared to usual," adding, "There are stores that are letting go of employees or increasing operating hours due to sluggish sales."
The association is also raising issues with the fact that Baemin's promises of promotional support were not properly fulfilled. A representative of the Franchise Owners' Association pointed out, "They promised top-tier placement and banner ads, but in reality, it was just a level of support provided briefly at the beginning. Currently, discount promotions like Kakao Pay are ongoing, but it's hard to find related banners, making it difficult to feel the actual effect."
A Korea 153 official stated, "From the headquarters' perspective, we believe there is a sales increase effect. It seems the complaints are coming from some stores that had a high proportion of revenue from Coupang Eats," and added, "We plan to discuss it again in August after this 3-month extension to decide on future operations."
Why is Baemin in a rush? Is it because of the sale?
Industry experts assess that Baemin Only is a strategy that carries a heavy burden for Baemin as well. Because it is a structure that effectively ties a specific brand to its platform in an exclusive form, it carries a high risk of escalating into controversies over fair trade and platform malpractice.
In fact, complaints to the FTC regarding Baemin Only are ongoing. In February, the Cheogajip Seasoned Chicken Franchise Owners' Association reported Baemin and Korea 153 to the FTC, claiming that Baemin Only constitutes an exclusive dealing arrangement and abuse of market-dominant position under the Fair Trade Act. The Association for Fair Platforms, the National Franchise Owners' Association, MinBYUN, and People's Solidarity for Participatory Democracy also raised the same issues and filed separate complaints. A representative of the Franchise Owners' Association said, "I understand that the FTC has already launched an investigation."
Meanwhile, rumors suggest that Baemin is attempting to expand similar exclusive strategies to other brands. An industry official said, "I understand that exclusive entry similar to Baemin Only was pushed for other chicken brands, but it was scrapped as opposition from franchise owners grew." Because of this, observations are being made regarding Baemin's recent moves to expand business agreements with franchises, questioning whether they intend to increase the number of brands to which Baemin Only is applied.
Some speculate that the background of Baemin's push for the extension of Baemin Only despite the controversy is not unrelated to a potential sale. The possibility of the sale of the Korean business by Baemin's parent company, Delivery Hero (DH), has been consistently raised. Recently, specific rumors emerged that DH selected JP Morgan as the lead manager for the sale of Baemin and is currently searching for a buyer. The corporate value of Baemin that DH expects is reportedly in the 8 trillion won range, which is nearly double the 4.75 trillion won acquisition amount in 2019.
It is believed that the more the company keeps a sale in mind, the more important indicators showing platform dominance—such as market share, control over franchises, and order lock-in effects—become. This is why Baemin Only is interpreted as a strategy to verify Baemin's market influence beyond a simple fee reduction promotion.
Although Baemin still maintains the top spot in the delivery app market, Coupang Eats' pursuit has been fierce recently. In November last year, the gap in Monthly Active Users (MAU) between Baemin and Coupang Eats was approximately 10.67 million, but it narrowed to about 10.25 million in April of this year. Last year, figures even showed that Coupang Eats' credit card payment volume in the Seoul area surpassed that of Baemin.
Woowa Brothers stated, "We are currently not reviewing any expansion of brands in relation to Baemin Only," and added, "We cannot confirm anything regarding the sale."