[Opinion] Kim Seon-gap, Mayor of Gwangjin-gu, "Why Create the Public Delivery App ‘Gwangjin Narumi’?"

Food ordering through delivery apps has quietly become a daily routine around us. The rapid increase in single-person households and social changes favoring contactless orders have combined to grow the delivery app market to over 5 trillion won, and Statistics Korea expects it to expand to a scale of 20 trillion won in 10 years.

However, the current delivery market is monopolized by one company. The German company Delivery Hero (DH) launched ‘Yogiyo’ in 2012, acquired ‘Baedaltong’ and ‘Foodfly,’ and then took over ‘Baedal Minjok’ in 2019, thereby dominating most of the domestic delivery market. Although the Fair Trade Commission’s review is still pending, considering the past approval process of eBay’s acquisition of Gmarket, it is highly likely that the overall trend will not change.

The drawbacks of market monopoly are clear. Rather than improving services through mutual market competition, there is a higher possibility of imposing unilateral service policies by leveraging monopolistic status. These concerns materialized when Baedal Minjok’s commission increase plan surfaced amid the COVID-19 crisis. Although it was withdrawn due to critical public opinion, political parties’ plans to develop public delivery apps, and pressure from the Fair Trade Commission, similar incidents can happen anytime in the future.

As the market dominance of rapidly growing delivery apps increases, the dependency of individual restaurants and stores inevitably grows as well. They have no choice but to use delivery apps for sales, and with platform costs added in the reality of endless competition, some stores inevitably fall behind.

Moreover, with the unprecedented economic damage caused by the global spread of COVID-19, countless small business owners and self-employed individuals are now pushed to the edge of a cliff. To support self-employed people burdened by the sharp sales decline due to COVID-19 and the high commissions of delivery apps they inevitably have to use, Gwangjin-gu has prepared a countermeasure. They developed ‘Gwangjin Narumi,’ a public delivery app that lowers the continuously burdensome delivery commissions and has no advertising fees, even when sales occur.

In the current delivery app sector, which is virtually monopolized, it is difficult to expect user choice guaranteed through competition between companies or commission reductions for small business owners. Gwangjin-gu’s public delivery app, which has no brokerage commissions or advertising fees, should become a platform that consumers, franchise stores, and delivery workers can all share and enjoy together. Some criticize public delivery apps for distorting market order, but rather, the entry of public apps will serve as a starting point to normalize the delivery app market, which has been distorted into a monopolistic and abnormal structure. If it influences the management strategies of monopolistic companies, contributes to expanding the market size itself, and induces participation from new companies, the entire delivery app market can develop more healthily from the user’s perspective.

Additionally, public delivery apps will strengthen local consumption networks by linking with local love gift certificates and reinforce the foundation of the regional economy.

As a local government, autonomous districts must above all protect the lives and safety of residents, improve their quality of life, and strive to develop the region. Facing the unprecedented COVID-19 crisis, we will continue meticulous review and practice to create a sustainable and efficient platform in developing public delivery apps so that efforts for the regional economy in crisis can bear fruit.

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