Save on Delivery Fees... Delete Delivery Apps or Use 'Baedal Gonggu'

As of August, Delivery App Users Down 33.8% Compared to Last December
Ordering Separately but Picking Up at the Same Location
Government Introduced Delivery Disclosure System, but Effectiveness Still Debated

[Image source=Yonhap News]

[Asia Economy Culture Young Intern Reporter] Although the government has implemented the delivery fee disclosure system for about eight months, delivery fees continue to rise. Amid the worst inflation, people trying to save even a penny on living expenses are either not using delivery applications (apps) or are participating in so-called 'baedal gonggu' (group ordering for delivery), which is becoming popular.

According to the Korea Consumer Organization Council, among 1,336 restaurants in Seoul last August, delivery fees at 378 restaurants (28%) increased by an average of 887 won compared to June. In cases of late-night or bad weather, additional costs apply, and consumers may have to pay up to 8,000 won from the current 3,000 to 5,000 won (consumer burden basis). The delivery industry attributes the increase in delivery fees to expanded advertising by platform companies and recent rises in ingredient prices.

In response, consumers are doing 'baedal gonggu' to save on delivery fees. Baedal Minjok introduced a group purchase system called 'Hamkke Jumun' (Order Together) on the 4th of last month, which allows users to share a shopping cart with several people, each adding their desired menu items, and then receive the order at one location. Coupang Eats has also been running a 'Chingu Moa Hamkke Jumun' (Friends Gather and Order Together) service since August, where individuals order separately but pick up at the same place. Both services allow the delivery fee to be split among the number of participants.

There is also a growing movement to not use delivery applications at all. According to the data analysis platform Mobile Index, the number of consumers using the three major monthly delivery apps (Baedal Minjok, Yogiyo, Coupang Eats) was 24,203,452 (Android basis) in March. This is about 1.07 million fewer than in December last year.

In August, the number of monthly users of major delivery apps was only 16,721,338. Compared to December last year, this is a 33.8% decrease, and compared to March this year, a 30.9% decrease. The industry analyzes that if delivery fees remain at current levels or increase further, it could lead to a decline in delivery order demand.

Although the government introduced the 'delivery fee disclosure system,' there are criticisms that it is ineffective. The delivery fee disclosure system is designed to publicly disclose delivery commission statuses so that consumers can compare delivery fees across platforms at a glance and choose relatively cheaper providers. It aims to satisfy consumers' right to know and encourage competition among platforms to lower delivery fees.

However, it remains difficult for consumers to understand, and delivery prices are not being controlled. The delivery fee survey is conducted by selecting two neighborhoods with the highest or lowest populations among 25 districts in Seoul, but it does not reflect changes in delivery fees depending on delivery methods, distances, or time slots. Also, since delivery fees are directly set by restaurant owners, there is criticism that the government's survey lacks effectiveness. Consumers who want to check the survey results must visit the Korea Consumer Organization Council website themselves, which is inconvenient.

Not only consumers but also self-employed business owners complain about the burden of delivery fees. According to a 'Platform Fairness Related Small Business Owner Awareness Survey' conducted by the Korea Federation of SMEs targeting 500 small business owners on online platforms, 72.8% responded that 'delivery costs are burdensome.' Only 7.4% said the costs were 'appropriate.' As delivery fees will be separately compiled and announced in the Consumer Price Statistics by Statistics Korea starting next year, calls are growing for the government to focus on fundamentally solving the problem.

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