'Chunlae Bulsachun' Delivery App Industry, Reorganizing Frontlines Through Differentiation

Delivery Platform Users Continue to Decline This Year
Three Major Delivery Apps Busy Preparing Countermeasures

Delivery app (application) users have been continuously decreasing this year. The delivery food market, which grew rapidly amid the spread of COVID-19, has experienced consecutive declines since the second half of last year. This trend has continued into this year. High inflation and the burden of delivery fees are also cited as factors contributing to the decrease in delivery demand. However, companies cannot simply watch the user decline from their side. The three major delivery apps are preparing differentiated strategies and regrouping for a turnaround.

On the 9th, data company IGAWorks announced that according to Mobile Index statistics, the number of delivery app users (MAU) on Android and iPhone (iOS) smartphones last month was 22.6 million. It was 23.1 million in December last year, but has shown a decline for two consecutive months this year. Compared to the same period last year, it decreased by 1.95 million users.

Last month, the number of users for Baemin (Baedal Minjok), Yogiyo, and Coupang Eats were 19.53 million, 6.48 million, and 3.21 million respectively. All have been on a downward curve since the beginning of this year. Compared to the same period last year, Baemin lost 1.16 million users, Yogiyo lost 2.39 million, and Coupang Eats lost 3.07 million. Some of the users who left may have moved to other apps. Users typically install multiple delivery apps and selectively use them as needed. However, the fact that all three companies have seen a decrease in users indicates that the delivery app market itself is shrinking.

The causes of the delivery app market stagnation include increased dining-out demand and high delivery fees. According to Statistics Korea, the online transaction amount for food services (delivery food) last year was 26.0339 trillion KRW, a 1.4% increase from the previous year. This means the increase in the first half of the year was slightly larger than the decline in the second half. However, delivery food transaction amounts increased by 78.1% in 2020 and 48.1% in 2021. For delivery companies accustomed to rapid growth, a 1% increase is a difficult challenge to endure. As social distancing measures were lifted and dining out increased, delivery demand decreased, while the burden of delivery fees grew. According to a survey by the Korea Consumer Agency's Price Monitoring Center, 11.4% of restaurants raised delivery fees last month compared to December.

Due to the continuous decrease in users, each company is busy preparing countermeasures. Baemin recently expanded its single-order delivery service, Baemin1. Starting from the 4th of next month, it plans to provide single-order delivery services in some areas such as Suncheon and Mokpo in Jeollanam-do, Iksan in Jeollabuk-do, and Seosan and Dangjin in Chungcheongnam-do after a pilot service. The strategy is to maintain the delivery ecosystem by building a dense service network.

Yogiyo and Coupang Eats have introduced differentiated delivery menu strategies. A representative example is Coupang Eats starting to deliver 'Zelen' by Chef Mikael in some areas of Gangnam. They plan to expand restaurants that can only be delivered through Coupang Eats. Yogiyo has partnered with the American chicken brand 'Wingstop' to start delivery services. Wingstop is a global brand operating over 1,900 stores worldwide and recently opened its first store in Seoul. An industry insider said, "Each delivery app company is preparing strategies that satisfy the ecosystem's key players?restaurants, users, and riders?to overcome the continuous decline in users."

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