[비즈한국] The 'Baemin Only' promotion, a collaboration between Cheogajip Seasoned Chicken and Baedal Minjok (Baemin), has ended after six months. As the promotion, which faced controversy over potential Fair Trade Act violations and opposition from franchisees, comes to an end, shifts in Baemin's lock-in strategy are anticipated. With Coupang Eats aggressively closing the gap, Baemin now faces the task of finding new competitive advantages.
'Baemin Only' ends after six months of controversy
Cheogajip Seasoned Chicken has decided not to extend its 'Baemin Only' promotion with Baedal Minjok. The promotion, which had been mired in controversy over franchisee backlash and potential Fair Trade Act violations, has come to a close after just six months of operation.
'Baemin Only' was a promotion requiring merchants to sell exclusively on Baemin, without using competing delivery apps like Coupang Eats or Yogiyo. Participating merchants were offered a reduction in brokerage fees from the standard 7.8% down to 3.5%. Woowa Brothers, the operator of Baedal Minjok, had entered into a Memorandum of Understanding (MOU) with Korea 153, the franchisor of Cheogajip Seasoned Chicken, to launch the promotion last February.
Controversy existed from the start. Critics argued that the practice of lowering fees on the condition of abandoning competing delivery apps could restrict market competition, and the Cheogajip Seasoned Chicken Franchisee Association even filed a complaint against Woowa Brothers and the franchisor with the Fair Trade Commission.
Despite the ongoing backlash, the promotion was extended once. Korea 153, which had originally planned to decide whether to continue after a three-month pilot, extended the operation by another three months last May. At the time, Korea 153 stated, "We have confirmed an increase in sales," as the reason for the extension.
According to Woowa Brothers, since the implementation of 'Baemin Only', Cheogajip's average order revenue increased by more than 60%, and the brand's overall sales growth rate exceeded the average growth rate of the entire chicken category by four times. In a sense, the positive impact on orders and revenue through the promotion was confirmed to some extent.
However, this did not lead to a further extension of the promotion. Korea 153 decided to end 'Baemin Only' as of August 8. The company explained that the actual profitability improvement was limited when accounting for discount and promotional costs, and that the continued opposition from franchisees also played a role.
A representative from Korea 153 stated, "Based on a survey of franchisees, there was a lot of opposition, and we decided to end the promotion after comprehensively considering profitability and other factors. Now that 'Baemin Only' has ended, franchisees are free to use whatever delivery platform they prefer."
An official from Woowa Brothers said, "The two companies have agreed to transition to a more sustainable form of collaboration. This does not mean the 'Baemin Only' strategy itself is being abandoned. However, we are considering directions that provide additional benefits to franchisees compared to the previous model. We are reviewing options to operate through the selective consent of individual store owners."
'Baemin Only' to be revamped… Focus shifting to subscription competition?
Although Baemin maintains the number one spot in the delivery app market, it is facing fierce competition from Coupang Eats, which has been growing rapidly since 2024 on the back of its free delivery policy. 'Baemin Only' was considered one of the cards Baemin played to strengthen its platform competitiveness amidst this landscape.
However, with the promotion ending after six months, prospects are emerging that Baemin's lock-in strategy will also change. Observers suggest that rather than the 'Baemin Only' approach, which ties specific brands and merchants to its platform, the company may place more weight on a strategy that retains consumers centered around subscription services.
Baemin recently stepped up efforts to enhance benefits for its subscription membership, 'Baemin Club.' Following benefits such as free delivery, B-Mart discounts, and OTT bundles, the company will add a Baemin Point accrual feature starting in October. Since approximately 50% of all Baemin orders were generated by Baemin Club subscribers last year, the importance of Baemin Club as a core tool for strengthening consumer lock-in appears to be growing.
A Woowa Brothers official stated, "We plan to strengthen our subscription service by adding various benefits like point accrual so customers can feel tangible benefits. We are also concentrating all company capabilities on improving delivery quality. We see quick commerce as a high-potential growth area and aim to expand this to grow into a local commerce platform in the long term."
In the mid-to-long term, the merger with Uber is also seen as a variable that could influence the strengthening of Baemin's competitiveness. Global mobility giant Uber signed a business combination agreement last July to acquire Delivery Hero (DH), the German parent company of Baemin. The acquisition includes Baedal Minjok, and the transaction is expected to close in the second half of 2027.
If business integration with Uber becomes more concrete in the future, it could provide new options for Baemin's subscription services and user lock-in strategy. Uber currently operates a subscription membership called 'Uber One.' While currently focused on mobility in South Korea, the company has expanded user touchpoints abroad by bundling ride-hailing and food/grocery delivery benefits into a single membership. If this is linked to Baemin's food delivery and grocery shopping services in the future, the scope of subscription benefits Baemin can offer could be significantly broadened.
While Baemin Club is currently enhancing its benefits, there is a difference in service scope compared to Coupang's 'Wow' membership, which broadly connects shopping, content, and delivery. Some predict that if Uber's mobility services are integrated later, Baemin could secure new competitiveness by building a subscription ecosystem that encompasses delivery, shopping, and transportation. However, no specific business integration plans between Baemin and Uber have been disclosed as of yet.
An industry insider remarked, "If Uber's global mobility capabilities and the delivery/quick commerce infrastructure held by DH are combined, there is a possibility that the group-level competitiveness will be strengthened. In such a case, the investment capacity and potential for business expansion for Baemin could become greater than before."