|Founder of Woowa Brothers Kim Bong-jin poses in this 2018 file photo. / Korea Times photo by Ryu Hyo-jin|
By Kim Jae-heun
Last year, the delivery application market experienced a 10 trillion won turnover, up 84.6 percent from 2018. The growth rate has been on the rise so far this year as the new coronavirus continues to keep people at home, forcing them to order food via mobile platform services.
Yet, such rapid growth doesn't come without disruption.
The country's No. 1 delivery service application, Baedal Minjok (Baemin), operated by Woowa Brothers, recently announced that it will restrict how often restaurant owners can feature the names of their establishments at the top of the search index.
The delivery service application receives a monthly 80,000 won ($67.40) advertisement fee for allowing shops to advertise on their mobile platform.
Below that, restaurants are listed in order of proximity to the user. To reach as many customers as possible, restaurant owners have been saving their business address under several locations in order to ensure they remain near the top of the list.
Starting April 1, Baemin will put a stop to this, providing customers more restaurant options when searching on the application.
"Until now, our application could have lost credibility with our users who choose restaurants from the advertisers' list. Now, we have restricted each advertising restaurant to appear at the top only three times, it will allow customers to see more shop names," a Baemin official said.
Baemin said it will not raise the advertisement fee for restaurant owners over the next three years. The delivery service giant believes this to be a reasonable resolution for both customers and entrepreneurs.
Another popular delivery service, Yogiyo, has banned entrepreneurs from promoting two brands under the same business license.
Previously, the platform allowed restaurant owners to promote their items with different brand names. This is because some entrepreneurs sell various types of food but Yogiyo divides restaurants by its culinary type.
"We saw it as a problem with promoting brand's name indiscreetly and not guaranteeing the quality of food. We may lose money on advertisement fees as many restaurant owners can now only advertise one name but it will win our customers' trust in our service," a Yogiyo official said.
An industry source said the two top delivery application firms' actions come in an effort to maintain customer loyalty amid the ever-growing size of the service industry.
Meanwhile, customers are also criticizing Woowa Brothers for rising delivery costs when ordering food with the application.
Previously, the restaurant owners had to shoulder the labor costs of the delivery service. However, Baemin has since changed the rule; customers pay 75% of the delivery fee while Baemin pays the rest.
The move has proven economically advantageous for delivery men, whose income rose to over 4 million won per month last December, up from 3.12 million won the year before.
Woowa Brothers said an increase in demand for delivery services towards the end of last year has worked out well for their employees.