Delivery App User Decline Pauses... But the Trigger Is 'Baedalbi'

30K Increase in Delivery App Users in April Compared to Previous Month
Delivery Fee Issues Sensitive... Future Ecosystem Threat 'Trigger'

Recently, the decline in the number of users of delivery applications (apps) has slowed down. Since last year, the number of users who increased due to COVID-19 has continued to decrease, and many have refrained from using delivery services due to high inflation, prompting each company to come up with countermeasures. Although the user churn has slowed, the industry explains that it is not yet time to judge that the strategies introduced by each company are working in the market. On the contrary, the issue of delivery fees, one of the main reasons for not using delivery apps, has not subsided, and it is expected to become a potential threat to the delivery ecosystem in the future.

On the 9th, data company IGAWorks announced through Mobile Index that the number of delivery app users (MAU) based on Android and iPhone (iOS) smartphones last month was 22.69 million. This is an increase of about 290,000 compared to the previous month. Although it is a slight rebound, it is notable that the downward trend that had continued since the beginning of this year has stopped.

Looking at the three major delivery apps, last month, Baedal Minjok (Baemin), Yogiyo, and Coupang Eats had 19.55 million, 6.68 million, and 3.03 million users, respectively. Baemin saw an increase of 250,000 users compared to the previous month, and Coupang Eats increased by 54,000 users. Only Yogiyo experienced a decrease of about 23,000 users. Compared to December last year, all three companies?Baemin, Yogiyo, and Coupang Eats?had been experiencing a decline in user numbers this year, but now the downward curve has either flattened or become more gradual.

Last month, delivery app companies simultaneously introduced measures to reduce delivery fees. Baemin launched the 'Altteul Delivery' service. While Baemin takes full responsibility for delivery as with the existing single-order delivery, it implements optimal bundled delivery according to the route, reducing the delivery cost burden for restaurants and consumers. This is expected to reduce consumer costs to around 2,000 won. This measure considered that the burden of delivery fees was one of the factors causing user decline.

Yogiyo also introduced 'Customized Delivery' last month, allowing consumers to choose the delivery method that suits their order situation. This feature lets consumers select between 'Express' delivery, which Yogiyo provides directly, and 'Store Delivery,' which uses delivery agencies, based on cost and other factors. This was also a measure to alleviate the burden of delivery fees.

While such strategies may temporarily affect the decline in users, the industry explains that it is still too early to say they are effective in the market. Baemin is gradually expanding the service area after piloting Altteul Delivery in some areas of Daegu, Incheon, and Gyeonggi. Yogiyo’s Customized Delivery also began pilot operations in some areas of Seoul and Incheon since mid-last month. Since these are still in the early stages of introduction, it will take time for them to establish themselves in the market and expand their operating areas.

The industry believes that to prevent the recent slowdown in the decline of delivery app users from resuming, delivery fees must stabilize at a level acceptable to consumers, business owners, and delivery workers. According to an analysis by the Korea Consumer Organization’s Price Monitoring Center last month on delivery fee fluctuations at the same restaurants, 7% of places raised delivery fees compared to two months ago, while 6.9% lowered them. The rest remained the same. This marks a change in atmosphere compared to December, when 23.7% of restaurants raised delivery fees. However, variables remain. The delivery workers’ union is demanding an increase in the basic delivery fee from Baemin. An industry insider said, "The delivery fee issue is sensitively received by consumers, business owners, and delivery workers alike," adding, "It is a time when growth strategies that all ecosystem participants can accept are needed."

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