Seoul City and 10 Private Delivery Companies Launch 'Zero Delivery Union' with Reduced Fees

Mayor Park Won-soon Signs MOU with Delivery Platforms and Small Business Groups
Delivery Brokerage Fees Reduced from 6-12% to 2% to Ease Burden on Businesses

On the afternoon of the 25th, at the National Assembly Communication Office in Yeouido, Seoul, Park Won-soon, Mayor of Seoul, Lee Yong-seon, a member of the Democratic Party of Korea, and representatives of the Zero Delivery Union agreement organizations are posing for a commemorative photo at the press conference for the "Zero Delivery Union Agreement Based on Zero Pay and Announcement of the Amendment Bill." [Image source=Yonhap News]

[Asia Economy Reporter Jo In-kyung] Starting as early as this September, the 'Seoul Love Gift Certificate (Zero Pay)' will be available for use on 10 delivery apps including Payco, Noljang, and Meokkebi. With nearly 1.2 million members and emerging as a universal payment method, the usage of the Seoul Love Gift Certificate is expanding from traditional offline stores to online platforms.

The Seoul Metropolitan Government announced on the 25th that it will launch the 'Zero Delivery Union,' which combines Zero Pay with private small and medium-sized delivery apps to simultaneously support small business owners suffering from high delivery brokerage fees due to market monopolization by some companies and small and medium delivery platform companies facing difficulties entering the market.

The Zero Delivery Union includes 10 delivery apps: Payco, Myeolchi Delivery, Mannaplanet, Meokkebi, Baedal Independence 0815, Noljang, Ro Market, Jupid, Ddingdong, and Smart Order 2.0.

The city will provide these delivery platform companies with the Seoul Love Gift Certificate as a payment method on their apps. Additionally, to address the biggest challenge for platform companies?securing merchants?it will conduct focused promotions targeting the approximately 250,000 Zero Pay affiliated stores within Seoul.

Zero Pay affiliated store owners can choose from among the 10 companies they wish to join and use the delivery platforms with low fees.

With these new payment methods and secured merchants, delivery platform companies aim to reduce delivery brokerage fees to below 2%, fostering coexistence with small business owners and opening a delivery market with low fees.

Considering that the current burden on merchants from delivery platform companies’ advertising fees and commissions ranges from 6% to 12%, this represents a reduction of about 4% to 10% in fees.

In particular, the city explained that this measure is differentiated from the 'public delivery apps' promoted by other local governments, as it does not create new delivery apps or support fees with public funds. The intention is to ensure sustainability by providing a playing field where private companies can compete without direct public intervention in the private market.

Mayor Park signed a business agreement with 10 companies and small business organizations at the National Assembly communication center on the same day, stating, "Some companies monopolize the delivery market, causing suffering for small business owners," and added, "We hope that the Zero Delivery Union will transform the delivery market into a fair market where small business owners also benefit."

Meanwhile, the domestic delivery industry is expected to surge from about 3 trillion won in 2018 to approximately 20 trillion won after 2020 due to smartphone penetration and the recent COVID-19 pandemic. However, with three companies including Baedal Minjok monopolizing the market, small business owners and self-employed individuals are increasingly dissatisfied due to high advertising and brokerage fees.

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