Delivery boom ending as life returns to normal

Delivery scooters parked at a Baemin center in Seoul in April [YONHAP]

Online shopping has peaked in Korea after a dramatic Covid-19-related boom, with online food delivery hit particularly hard by the end of social distancing.

According to Statistics Korea on Thursday, online shopping sales in April grew 11.9 percent year-on-year to 16.4 trillion won ($13 billion). On month, the total declined 4.5 percent.

On April 18, almost all measures related to social distancing, including curfews and limits on the number of diners eating together at restaurants, were ended. Koreans have been rushing to restaurants, coffee shops, bars and supermarkets as a result.

Mobile shopping sales grew 15.7 percent on year to 12.3 trillion won. On month, it fell 4.3 percent. Online mobile shopping was 74.6 percent of the total, up from 72.2 percent in April 2021.

Sales in the food services category — mainly food delivery — rose 5.7 percent on year to 2 trillion won — the slowest on-year increase since the statistics were first compiled in 2017 — and declined 12.2 percent on month.

"The easing of social distancing has significantly affected food delivery," said a Statistics Korea official. "As online shopping has grown overall, it's unlikely that there is going to be explosive growth for the time being."

Online food delivery services have been increasing their fees, and this may also have had an effect on demand.

Baedal Minjok now charges a 6.8 percent brokerage fee and a 6,000 won delivery fee, compared to a 1,000 won brokerage fee and 5,000 won delivery fee. Coupang Eats has also increased fees.

"Recently, I was thinking of ordering sushi via" Baedal Minjok, said a 47-year-old Seoul resident. "But when I saw that I had to pay an additional 4,000 won, I decided to give up and just go to the restaurant on foot.

"I've enjoyed using the food delivery service during the pandemic, but now with social distancing regulations lifted, there's no reason for me to order online, especially if I have to pay more."

According to a study by MobileIndex, the number of customers using food delivery apps — including Baedal Minjok, Coupang Eats and Yogiyo apps — dropped 21.2 percent April 18 to 21 compared to the same period the previous month.

Online grocery orders have also dropped off, falling 7 percent on month.

Traveling and transportation service online spending totaled 1.3 trillion won in April, up 90 percent on year and 40 percent on month. Culture and leisure spending was up 114 percent on year and 50 percent on month.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]