Delivery Platforms and Partner Merchants Still at Odds Over Commissions... Is Win-Win Cooperation Out of Reach?

Coupang Eats Also Shifted to 'Differential Fees' but No Agreement Reached
Partner Stores Demand 'Commission Within 5%'
Public Interest Committee Chair: "Mediation Proposal to Be Presented at Next Meeting"

The 'Delivery Platform-Merchant Win-Win Council' failed to reach an agreement on the commission fee proposal even at the 10th meeting. This was due to the significant gap in positions between the merchants and the platforms. The merchants insisted on lowering the commission fee to within 5%. However, the platform, which currently charges a maximum commission fee of 9.8%, considered introducing a 'differential commission fee' that applies preferential rates to lower-performing merchants, but struggled over the exact rate. Ultimately, there was an unbridgeable gap between the merchants and the platforms. The failure to reach an agreement after ten meetings has increased the likelihood of future legislative regulation on commission rates.

According to the delivery platform industry on the 5th, the 10th Win-Win Council meeting held the previous afternoon also failed to reach an agreement on the commission fee win-win plan. The discussion focused on easing the burden on merchants, including commission fees, which was a major demand from the merchants. At the previous meeting, the public interest commissioners accepted the win-win plan proposed by Yogiyo but requested Baemin and Coupang Eats to prepare more progressive win-win plans. In response to this request, Baemin and Coupang Eats expressed their willingness to consider more proactive measures than those previously proposed.

In particular, Coupang Eats introduced for the first time a proposal to implement a 'differential commission rate' that lowers the commission rate for merchants with low sales. In the early stages of the Win-Win Council, Coupang Eats did not present a separate win-win plan, stating they would follow the commission policy of Baemin, the industry leader. However, at the 8th meeting held on the 23rd of last month, they proposed lowering the commission rate from 9.8% to 5%. This was met with opposition because it included conditions that could increase delivery costs for merchants. Regarding the reintroduction of the differential commission rate, Yuseong Hoon, head of Coupang Eats, explained, "The introduction of a differential commission rate is a measure to reduce the commission burden on small and medium-sized stores while maintaining free delivery benefits for consumers."

Earlier, Baemin proposed at the 6th meeting a win-win plan applying a differential commission rate ranging from 2% to 6.8%?lower than the existing 9.8%?only to the bottom 40% of merchants by sales. This means that Baemin and Coupang Eats, the first and second largest players in the delivery app market, can now discuss detailed differential application ranges for commission rates. However, this was still far from the merchants’ set '5% commission rate cap.'

At the 9th meeting, the public interest commissioners proposed a mediation plan to Baemin to reduce the commission rate from 9.8% to 7.8% and apply a commission rate within 6.8% to the bottom 80% of merchants by sales. The commissioners explained that they made efforts to facilitate discussions and reconcile differences during this meeting as well. The delivery platforms requested additional review time to prepare a more advanced win-win plan based on this.

With no conclusion reached that day, the public interest commissioners decided to present a final mediation proposal summarizing the discussions at the next meeting. The Win-Win Council reached a consensus on the need for additional meetings soon and agreed to continue discussions at an additional meeting on the 7th. If the delivery app companies do not accept the commissioners’ mediation proposal, it will be announced in the form of a recommendation. However, since it is only a recommendation, the likelihood of delivery platforms accepting it is low. Given the lack of enforcement power, there is a strong possibility that legislative discussions on regulating delivery commission rate caps will accelerate, mainly led by the political sphere.

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