Yogiyo drops commission fee to 9.7 percent, undercutting Baemin and Coupang Eats

Industry

Yogiyo drops commission fee to 9.7 percent, undercutting Baemin and Coupang Eats

Published: 02 Aug. 2024, 18:55

KIM JU-YEON
kim.juyeon2@joongang.co.kr

Yogiyo delivery motorcycles are lined up at a street in Seoul. [YONHAP]

Yogiyo will lower its delivery commission fee from 12.5 percent to 9.7 percent, the lowest among its competitors, in an effort to attract vendors after losing its No. 2 position to rival Coupang Eats.

The rate, titled “Yogiyo Lite,” will roll out nationwide in August, the food delivery service said Thursday.

Restaurants that operate on the platform can opt into the lower rate from Aug. 5, a Yogiyo spokesperson told the Korea JoongAng Daily.

Certain restaurants can receive lower rates depending on their revenue. High-earning shops can pay as little as 4.7 percent, an industry low — Hy Knock charges the second-lowest rate of 5.8 percent.

The cap of 9.7 percent will edge out the 9.8 percent maximum levied by competitors Baedal Minjok, commonly known as Baemin, and Coupang Eats.

Yogiyo was previously the second-largest platform after Baedal Minjok but lost the slot to Coupang Eats in March, after the latter rolled out free delivery to its WOW members. It currently ranks third in the domestic food delivery space, claiming a market share of 15.5 percent.

Around 22.51 million Koreans used delivery app Baedal Minjok in July, which was followed by Coupang Eats and Yogiyo. [WISEAPP RETAIL GOODS]

Baedal Minjok still dominates the market with 59 percent while Coupang Eats accounts for 21 percent as of July, according to industry tracker WiseappㆍRetailㆍGoods.

Yogiyo saw a significant rise in both processed orders and revenue after testing Yogiyo Lite in certain regions from May 13 to July 14. Orders rose by more than 20 percent at 32 percent of stores that participated in the pilot program, and deliveries rose by 100 percent at 13 percent of vendors, the company said.

The platform considers those results a success for the new fee structure. “Let’s say a Chinese restaurant is listed on multiple delivery services and can choose which one to [use to] accept food orders. The test run shows that shop owners think Yogiyo is the preferable choice as it has a lower commission fee,” the Yogiyo spokesperson said.

Yogiyo’s announcement comes after market leader Baedal Minjok raised the commission fee for its Baemin 1 delivery service from 6.8 percent to 9.8 percent this month, drawing much backlash.

Yogiyo has been bleeding customers in the past few months. The platform lost 0.5 percent of its user base between June and July, according to WiseApp, counting just 5.89 million last month.

Both Baedal Minjok and Coupang Eats recorded their highest ever number of monthly active users the same month, counting 22.51 million and 8.1 million, respectively.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]