80% of Restaurants Say "Delivery App Fees Are Excessive" ... 75% Oppose "Baemin-Yogiyo Merger"

Seoul-Incheon-Gyeonggi Council Joint Survey of 2,000 Delivery Restaurants and 1,000 Consumers
Advertising and Commission Costs Passed to Consumers or Food Prices Raised
39% Say Restaurant Exposure Order on Delivery Apps Is "Not Objective or Rational"

[Asia Economy Reporter Jo In-kyung] It has been revealed that 96% of consumers ordering delivery food in the Seoul metropolitan area, including Seoul, Gyeonggi, and Incheon, use 'delivery apps.' However, 8 out of 10 delivery restaurants pointed out that the advertising fees and commissions imposed by delivery app companies are excessively high, and they were resolving this by charging delivery fees to customers, raising food prices, or reducing food portions.

The 'Metropolitan Fair Economy Council,' jointly established by Seoul City, Incheon City, and Gyeonggi Province, disclosed on the 27th the results of a 'Delivery App Transaction Practice Survey' conducted from June to July targeting 2,000 delivery app-affiliated restaurants belonging to the Central Association of the Food Service Industry located in the metropolitan area.

According to the survey, among these 2,000 metropolitan delivery restaurants, 92.8% were listed on the delivery app 'Baedal Minjok,' and on average, each restaurant used 1.4 delivery apps, including 'Yogiyo (40.5%)' and 'Baedaltong (7.8%).'

The main reason these restaurants joined delivery apps was that 'company promotion is convenient,' with 55.5% (multiple responses allowed) selecting this answer, followed by 'it is difficult to continue operations without joining because many consumers use delivery apps' at 52.3%, and 'many nearby competitors have joined' at 45.3%. Additionally, 94% of store owners predicted that 'sales would drop by about 40%' if they did not use delivery apps.

Regarding restaurant promotions, previously, flyers or stickers accounted for 54.3%, but after the emergence of delivery apps, this dropped to 27.9%, while promotion through delivery apps rose to 60.5%, establishing itself as a major method.

Restaurant Owners: "Exposure Should Be Based on Distance" vs Consumers: "'Reviews and Ratings Are Important"

However, 8 out of 10 (79.2%) of these affiliated stores pointed out that the advertising fees and commissions paid to delivery app companies are excessively high. In addition to advertising, additional costs such as 'providing side dishes or extra food when writing reviews (28.5%)', 'issuing discount coupons (22.1%)', and 'supporting delivery fees (15.3%)' were reported to increase the burden.

The burden of advertising fees and commissions paid to delivery app companies was most commonly addressed by 'charging customers delivery fees' at 41.7%, followed by 'raising food prices (22.0%)' and 'reducing menu size or quantity and changing ingredients to cut costs (16.3%)', mostly passing the costs on to consumers.

Therefore, restaurant businesses responded that the priority for improving delivery app transaction practices is 'reducing advertising fees and commissions (78.6%)', followed by 'introducing standards and caps for advertising fees and commissions (56.5%)' and 'establishing preferential commission rates for small business owners (44.1%)'.

Furthermore, more than 8 out of 10 delivery restaurants reported that they received guidance and explanations about the order of restaurant exposure within the delivery app before signing contracts. However, only 10% of respondents believed that the exposure criteria are 'operated objectively and reasonably,' while 39.2% answered 'not so.' Many store owners thought that exposure based on 'proximity to the user's location (73.5%)' was objective and reasonable, but consumers answered that 'order based on high reviews and ratings (62.5%)' was the most important consideration, showing some differences.

Regarding the proposed merger between Baedal Minjok (Woowa Brothers) and Yogiyo (Delivery Hero), which together occupy over 90% of the delivery platform market, 74.6% of restaurants opposed it. The main reason for opposition was 'cost burden due to increased advertising fees and commissions (81.4%, multiple responses allowed),' followed by 'restrictions on business activities due to monopoly of customer and business information (51.9%)' and 'concerns about forced use of additional services such as delivery agency, POS, and other value-added services beyond advertising (47.8%).' Currently, the Fair Trade Commission is conducting a corporate merger review of the two companies.

Consumers Also Oppose Delivery App Merger... Concerns Over Advertising Fee and Commission Increases

Meanwhile, a survey of 1,000 consumers who order delivery food at least once a month found that 96% use delivery apps when ordering food. The reasons for using delivery apps included 'convenient ordering and payment (48.3%)' and 'referring to restaurant reviews (32.2%).'

Consumers also opposed the merger, with more than half (58.6%) expressing opposition. The reasons cited included 'food price increases due to higher advertising fees and commissions (70.7%)', 'reduction in delivery app discounts (40.5%)', and 'decline in food quality (32.9%).'

The Metropolitan Fair Economy Council of Seoul, Incheon, and Gyeonggi plans to accelerate the creation of an ecosystem where delivery platform operators and affiliated small business owners grow together based on this survey. They also intend to propose institutional improvements in line with the government's legislative push for the 'Online Platform Fairness Act.'

The Metropolitan Fair Economy Council stated, "Due to changes in consumer trends, it is impossible to operate without using delivery apps, but the excessive advertising fees and commissions and damages caused by monopolies are being passed on directly to small business owners as well as consumers. We will encourage fair competition among delivery apps through Seoul City's Zero Delivery Union, Incheon City's Incheon e-eum, and Gyeonggi Province's public delivery apps, thereby reducing the burden on both small business owners and consumers."

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