The revised rates will go into effect starting in April.
Woowa Brothers, which operates Baedal Minjok, on Monday said it will reduce the commission rate of its “open list” from the existing 6.8 percent to 5.8 percent. The open list refers to ads that are featured on the top of the app page.
The delivery service generates revenue through ads rather than on a per-order basis.
If consumers order food worth 10,000 won ($8.97) from the open list, Baedal Minjok charges the restaurant 680 won. Starting next year, the charge will be reduced to 580 won. Baedal Minjok, also known as Baemin, instead plans to increase the number of restaurants that can be exposed on the open list from the existing three.
The company also plans to freeze the charge for posting ads right below the open list for the next three years. These ads feature the names of the restaurants that pay Baemin 80,000 won per month. Following the change, restaurants are able to register for the service a limited number of times.
Some restaurants took advantage of the existing system by registering multiple times. Baemin was criticized for this system, which hurt the businesses of restaurants with limited funding. A single restaurant was found to have signed up 50 times for the extra exposure.
“Up until now, restaurants that paid a lot were exposed repeatedly on the top, but the revised system will enable restaurants that received high evaluations to be placed on the top,” said Kim Bom-jun, executive vice president at Woowa Brothers. “From restaurant operators’ perspective, they will be able to concentrate on raising the primary competitiveness to compete based on taste and price instead of the capital they have.”
Delivery Hero Korea, which operates Yogiyo and Baedaltong, has been finding ways to cooperate with restaurant owners.
Starting in November last year, the Germany-based company scrapped the commission fees it imposes on restaurants on Yogiyo for orders of food that cost below 10,000 won. It also offers products that are necessary for offering delivery food, like disposable dishes, at wholesale prices.
The food delivery market, which has been growing exponentially, reached 3 trillion won in size as of last year, according to the Fair Trade Commission. Seeing opportunities, e-commerce operator Coupang introduced Coupang Eats earlier this year, while WeMakePrice started a similar service in April.
BY JIN MIN-JI [[email protected]]
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