Woowa Brothers Surpass 500 Billion KRW in Sales Last Year... Operating Profit Turns to Loss

2019 Performance Released... Sales Increased 80% in One Year to 565.4 Billion Won Confirming Growth
Expenses Rise Including Advertising, Marketing, and Rider Promotion Costs Resulting in Deficit After 4 Years

[Asia Economy Reporter Kim Cheol-hyun] Woowa Brothers, the company behind the delivery app Baedal Minjok, has surpassed 500 billion KRW in annual sales. It has been 10 years since they pioneered the domestic food delivery app market by collecting and inputting restaurant flyers from the streets. However, operating profit turned negative for the first time in four years due to increased expenses such as advertising, marketing, and rider promotions.

On the 20th, Woowa Brothers (CEO Kim Beom-jun) announced that their consolidated sales for last year reached 565.4 billion KRW. This represents an 80% growth compared to the previous year. Simply comparing to the 49.5 billion KRW recorded in 2015, the company has grown more than elevenfold in four years.

The operating loss was 36.4 billion KRW. Woowa Brothers had achieved profitability six years after its founding with an operating profit of 2.5 billion KRW in 2016 and maintained a profit trend for three consecutive years thereafter. However, it returned to a loss after four years. This was due to intensified competition in the domestic food delivery market, which led to increased advertising and marketing costs as well as higher rider promotion expenses, resulting in an 88.9 billion KRW decrease in operating profit compared to the previous year.

Kim Beom-jun, CEO of Woowa Brothers, said, "2019 was a year in which we contributed to the growth of the domestic food delivery market and accumulated technological competitiveness and management know-how that can compete in the global market." He added, "In 2020, we will strive to maintain a healthy growth structure."

As Baedal Minjok (hereafter Baemin) grows, the domestic online food delivery market is also expanding. The total sales generated by small restaurant owners listed on the Baemin app through Baemin last year amounted to 8.6 trillion KRW. Sales through Baemin exceeded 1 trillion KRW in 2015, then 3 trillion KRW in 2017, 5.2 trillion KRW in 2018, and surpassed 8 trillion KRW last year. With the increase in single- and two-person households, dual-income couples, and the spread of 'untact' consumption trends, the dining industry is being reorganized around delivery, and the order growth trend is expected to continue for the time being.

Woowa Brothers is expanding services closely related to food culture based on Baemin’s stable business. Launched at the end of last year, 'B Mart' is a model that delivers groceries and daily necessities immediately upon order and is operating throughout Seoul. The robot service business is also gradually bearing fruit. The serving robot rental business is gaining momentum in line with the preference for contactless services. The goal is to introduce 300 units to 200 establishments nationwide within this year. Outdoor autonomous delivery robots are showing results in pilot operations in apartment complexes and university campuses, and cooking robot development is underway in collaboration with 'RoMeLa,' a research institute under UCLA.

Baemin’s independent brand overseas business is also showing results. Launched in Ho Chi Minh City, Vietnam, in June last year, 'BAEMIN' is gaining attention by combining its unique culture marketing with local sentiments. In addition, the specialized food ingredient shopping mall 'Baemin Sanghoe' has launched an eco-friendly product lineup, participating in sustainable management. The 'Baemin Academy,' a business school providing free education to small business owners, is expanding annually. So far, about 20,000 small business owners have attended the training. Support continues for preventing delivery workers’ safety accidents and providing stable jobs.

CEO Kim said, "Woowa Brothers, celebrating its 10th anniversary this year, faces challenges for a second phase of growth." He added, "We will operate the Baedal Minjok platform so that restaurant owners can achieve more sales at reasonable costs and users can enjoy 'good food wherever they want,' while focusing our capabilities on advancing various food tech innovations."

This content was produced with the assistance of AI translation services.