Yogiyo 發 Paradigm Shift... The New Owner Is

Ranked 2nd in Market... Valued at Over 2 Trillion Won
Potential Acquisition Targets Include Portals and Coupang

[Asia Economy Reporters Kim Cheol-hyun, Boo Ae-ri] The domestic delivery application (app) market is shaking up. Baedal Minjok (Baemin), the industry leader, has accelerated its global expansion beyond the domestic market through a strategic merger and acquisition (M&A) with Delivery Hero (DH), and as a result, Yogiyo, the second-largest player, has been put up for sale. Coupang Eats, which has grown rapidly over the past year amid the COVID-19 pandemic, has risen to third place in the market, showing strong competition from latecomers. Depending on who acquires Delivery Hero Korea (DHK), which operates Yogiyo, not only could they instantly rise to the second-largest market position, but they could also threaten Baemin’s dominance as it turns its attention to the Asian market, signaling a potential seismic shift in the market.

According to industry sources on the 29th, candidates for acquiring Yogiyo, which is up for sale, include large distribution conglomerates, portal companies that have recently entered the delivery market in earnest, and latecomer delivery apps like Coupang. These companies are expected to create significant synergy with their existing businesses if they acquire the second-largest delivery platform, and the industry consensus is that they could move quickly once DH officially begins the sale process. For example, Naver operates delivery services such as 'Neighborhood Market Shopping Delivery' and 'Smart Order' and has continuously invested in delivery app companies. Kakao also operates an 'Order' service within the KakaoTalk app. However, portal companies have drawn a line regarding the possibility of acquisition. Given the nature of the delivery app business, which is closely tied to social issues such as small business commission fees and platform worker concerns, it is analyzed that participation in the acquisition battle will likely be cautious.

◆ Yogiyo-triggered Market Shift Worth 2 Trillion Won = Industry insiders estimate that the value of Yogiyo, the second-largest player in the market, could reach the 2 trillion won range, about half the value of Baemin, which was valued at 4.8 trillion won in the DH and Woowa Brothers M&A, especially considering the surge in delivery app users due to COVID-19 this year. Even accounting for a decrease in value due to the sale, it is expected to be over 1 trillion won.

The search for a new owner of DHK, which operates Yogiyo and Baedaltong, is expected to further intensify competition in the delivery market in 2021. The Fair Trade Commission (FTC) ordered DH to sell all shares of DHK to a third party within six months to complete the acquisition of Woowa Brothers, allowing for an extension within that six-month period if unavoidable circumstances are recognized. Considering the rapid changes in the global delivery app market during the potentially year-long approval process, the industry expects DH to accelerate the sale of DHK to finalize the 'big deal.' It is said that a new owner for Yogiyo could emerge as early as the first half of next year. An industry insider said, "It is true that Yogiyo has not been able to actively market itself due to market share issues after the merger of DH and Baemin," adding, "Once DHK finds a new owner, it is expected to aggressively expand its market share."

◆ Will Large Distribution Conglomerates Join? = While there are expectations that large distribution conglomerates such as Lotte and Shinsegae might enter the market, there are also many variables. An industry insider said, "Delivery apps are not a business that large corporations sensitive to public opinion can easily jump into," adding, "While it is worth considering for business synergy, they must also consider the possibility of backlash."

Among the strong acquisition candidates, Coupang is a variable due to the rapid growth of Coupang Eats in the second half of this year. According to mobile index data from big data company IGAWorks, the number of Coupang Eats users (MAU) on Android smartphones in November this year increased by 70% compared to August. The user base grew from 748,000 in August to 1,264,000 in November, with over 500,000 new users joining Coupang Eats in the past three months.

Notably, all major delivery apps except Coupang Eats have seen a decline in users over the past three months. Although the gap between Coupang Eats and the market leaders remains large, combined with its recent upward trend, if the acquisition of Yogiyo is realized, it is analyzed that Coupang could even threaten Baemin. An industry insider said, "Coupang Eats has recorded explosive growth centered on the metropolitan area and is expanding its service nationwide," adding, "By leveraging Coupang’s logistics experience and technological capabilities to expand the business, the user growth trend is expected to continue."

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