Delivery platforms, restaurants strike commission deal

Home > Business > Industry

Delivery platforms, restaurants strike commission deal

Published: 14 Nov. 2024, 18:48

This undated file photo shows a meeting organized by a government consultative body overseeing discussions on delivery platform commissions. [YONHAP]

Delivery platforms and partner restaurants reached an agreement Thursday to reduce controversial commission fees to 2 to 7.8 percent from the current 9.8 percent, officials said.

The decision came in the 12th round of a meeting held by a government consultative body overseeing the discussions, attended by representatives from Baedal Minjok, or Baemin, as well as smaller competitors Coupang Eats and Yogiyo, along with small business owners registered with these platforms.

Under the agreement, participants agreed to introduce a tiered commission system that categorizes merchants based on their revenue within the app, allowing lower-revenue merchants to qualify for reduced commission rates.

Both Baemin and Coupang Eats currently charge a 9.8 percent commission on orders, while Yogiyo charges 9.7 percent.

However, merchants have continued to push for a flat 5 percent cap on commission rates.

Thursday's meeting was held impromptu after the consultative body urged the platform operators to revise their proposals and improve their existing offers.

Baemin, owned by Woowa Brothers, reportedly holds around 60 percent of South Korea's food delivery app market, with the remaining share divided between GS Retail's Yogiyo and Coupang Eats, the food delivery arm of e-commerce giant Coupang.

Korea is one of the world's largest food delivery markets, valued at over 20 trillion won (US$14.4 billion), driven by high smartphone penetration and a densely populated urban environment.

Yonhap