Baemin Raises Commission by 3 Percentage Points... Small Business Owners' Sighs Deepen

Baemin Announces Pricing Plan Revision... Commission Fee Up by 3% Points
Delivery and Packaging Fees for Merchants Reduced
Self-Employed Express Concern, "Should We Stop Delivery?"

Delivery application (app) Baedal Minjok will raise its commission fee for its own delivery service brokerage from 6.8% to 9.8% starting next month. In response, store owners have expressed dissatisfaction, saying, "We are struggling with whether to raise food prices or stop delivery altogether."

A self-employed person running a delivery restaurant is packing food. Photo by Jo Yongjun jun21@

Woowa Brothers, the operator of Baemin, announced a revised pricing plan on the 10th that includes an increase in the brokerage usage fee rate. The current brokerage usage fee rate for Baemin's own delivery service, Baemin1 Plus, is 6.8%. In this revision, Baemin changed the commission, which had been maintained since March 2022, to 9.8%, the same as its competitor Coupang Eats. Yogiyo charges a commission fee of 12.5%.

The revised pricing plan will be applied from the 9th of next month. However, Baemin will reduce the delivery fee burden on store owners and the brokerage usage fee for takeout orders. The delivery fee burden on store owners will be lowered by 100 to 900 KRW per order depending on the region, down from the existing 2,500 to 3,300 KRW. In the Seoul area, the burden will be reduced by about 300 KRW, from 3,200 KRW to 2,900 KRW. The brokerage usage fee rate for takeout orders will be cut by about half, from 6.8% to 3.4%. This applies to new store owners joining after July 1. Existing store owners will receive free delivery commission until March next year.

Restaurant owners have voiced their concerns with sighs over Baemin's recent commission increase. Mr. Han (49), who runs a Korean restaurant in Yeouido, Seoul, said, "Since I have to bear amounts ranging from 3,700 KRW to over 5,000 KRW, after delivering with the minimum order amount of 14,000 KRW, there is no money left in hand," adding, "In this situation, with the commission going up even more, I think I will have to either raise food prices or stop delivery altogether."

Mr. Kim (36), who runs a cafe near Mr. Han's store, also complained, "An increase of 3 percentage points may not seem big, but when applied to all delivery orders, it becomes a huge burden," adding, "There is no store around that does not do delivery, but we cannot stop delivery either, so it’s driving us crazy." Stores that generate a certain amount of sales in-store may choose not to operate delivery, but stores that rely on delivery have no choice.

The backlash from small business owners is expected to intensify. Yoo Deok-hyun, president of the Seoul Small Business Association, pointed out, "Raising commissions suddenly without any public discussion or prior notice is too harsh," adding, "Everyone seems to have forgotten that platforms like Baemin cannot generate profits without small business owners."

Industry insiders speculate that Baemin’s sudden pricing revision may have been driven by performance pressure from its German parent company, Delivery Hero (DH). Baemin recently announced the monetization of its free delivery subscription service, 'Baemin Club.' An industry official said, "I understand there was conflict with Baemin as the headquarters ordered to increase profits." DH is known to have taken 412.7 billion KRW in dividends through Baemin last year. On the 2nd, CEO Lee Guk-hwan of Woowa Brothers suddenly resigned, fueling industry speculation. Baemin stated that Lee’s resignation was due to "personal reasons" and did not disclose further details.

The fierce pursuit by second-place Coupang Eats is also a reason Baemin is focusing on profitability. Recently, Coupang Eats has been rapidly growing, doubling its users in one year by promoting "nationwide free delivery." It has also extended its free takeout commission policy indefinitely and introduced measures to coexist with small business owners.

Regarding this, a Baemin representative emphasized, "In a situation where delivery competition is accelerating, it is difficult to sustain the service by charging lower commissions than other companies, so this revision was made," adding, "While the commission rate was raised to industry levels, the delivery fee burden on store owners was lowered." The representative also added, "There is no pressure from the parent company; the revision is due to concerns about competition in the delivery app market."

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