Level 4, Heatwave, Olympics... The Intensified Delivery War

User base increases by over 5% compared to two months ago... Baemin's 'Single Delivery' counterattack

As the fourth level of social distancing in the Seoul metropolitan area continues for a month, demand for delivery applications (apps) has surged significantly due to the heatwave and the Tokyo Olympics. The strengthened social distancing measures amid the resurgence of COVID-19, combined with the ongoing heatwave and the excitement of cheering for the Olympics, have led more people to seek convenient food options at home. Competition among companies to dominate this growing market is fierce. Baemin, which had been chased by Coupang Eats with its ‘single-order delivery’ system where one rider handles one order, has launched a full-scale counterattack.

According to Mobile Index by data company IGAWorks on the 9th, last month, based on Android and iPhone (iOS) smartphones, Baemin and Yogiyo recorded monthly active users (MAU) of 20.74 million and 8.19 million, respectively. Baemin, the industry leader, saw a 5.6% increase in users compared to two months ago in May, while second-place Yogiyo grew by 5.9% during the same period. Coupang Eats, competing with Baemin in single-order delivery, showed a slight pause in its previously steep growth, recording 5.26 million users last month, similar to May.

◆Effects of Social Distancing, Heatwave, and Olympics=Industry experts analyze that three factors?social distancing, heatwave, and the Olympics?have recently driven the increase in delivery demand. The fourth level of social distancing in the metropolitan area has been in effect since the 12th of last month and has continued for nearly a month. During this period, Baemin’s monthly users increased by more than 3%.

Actual deliveries surged significantly around the opening of the Olympics. Delivery agency Barogo reported an 18.4% increase in completed deliveries on the 24th and 25th of last month compared to the previous month. Similarly, Vroong saw an 18.8% increase in deliveries from the 23rd to the 25th of last month compared to the same period the previous month. An industry insider explained, "With COVID-19 and the ongoing heatwave causing a significant rise in deliveries, the large-scale sports event of the Olympics further boosted demand."

◆Baemin’s Full-Scale ‘Counterattack’=Since last month, the single-order delivery competition between Baemin and Coupang Eats, centered in the metropolitan area, has attracted new users by emphasizing high delivery quality. As Coupang Eats’ users rapidly increased by promoting single-order delivery, Baemin launched its single-order delivery service ‘Baemin1’ in June and expanded the service area to all of Seoul on the 6th of last month. This month, the service also began in some areas of Gyeonggi Province, including Yongin, Seongnam, Suwon, and Goyang.

Baemin’s aggressive single-order delivery strategy has caused Coupang Eats’ user growth to slow. Coupang Eats’ users decreased by 4.3% in July compared to the previous month. Considering that users had steadily increased by 40.8% from February through June this year, this marks a turning point in the growth curve. Meanwhile, Yogiyo, which has not entered the single-order delivery competition, maintains its user base through various discount promotions. Since sale negotiations are underway, retaining users is a priority to increase corporate value.

An industry official said, "With social distancing, heatwaves, and the Olympics overlapping to significantly increase delivery orders, fierce competition among companies to capture ‘multi-homing’ users who selectively use multiple delivery apps will intensify."

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