[Why&Next] Uber and Naver Move to Acquire Baemin... Eyeing Coupang's Top Spot in Commerce

Ecosystem Expansion Through Integration of Search, Shopping, and Membership

Naver to Boost Delivery Competitiveness and Secure User Data

Calls for Prioritizing AI Focus and Monetization Strategies

Naver, South Korea’s largest portal, and global mobility company Uber have entered the race to acquire Baemin (Baedal Minjok, operated by Woowa Brothers), the country’s leading food delivery service. The platform industry is leaving open the possibility that this merger and acquisition (M&A) surrounding Baemin could expand beyond competition among food delivery apps and lead to a broader restructuring of the Korean platform market.

According to the platform and investment banking (IB) industries on May 19, Uber and Naver have formed a consortium to acquire Baemin and have expressed their intention to purchase to Delivery Hero (DH), Baemin’s largest shareholder based in Germany. With the Fair Trade Commission’s business combination review being the biggest variable going forward, Naver, as part of a large business group, is reportedly taking a strategy to avoid monopoly concerns by lowering its ownership stake to below 20% to pass the review. Currently, Naver is under regulatory scrutiny due to its merger with Dunamu, and may be particularly sensitive to any monopoly controversies.

Uber has also acquired additional shares in Baemin’s parent company, DH, making it the largest shareholder. On May 18 (local time), DH issued a press release stating, “Uber has acquired additional shares and securities of DH, resulting in a 19.5% stake in issued shares and 5.6% in stock options.”

Naver has recently been aggressively increasing its commerce sales. The acquisition of Baemin would enable Naver to expand its ecosystem by integrating search, shopping, and membership services. Naver is currently strengthening its map services and Naver Place, both search-based, to prepare for full-scale competition with Google. By connecting Naver’s search, food ordering, payment, and review functions into a single seamless service, and by adding Baemin discounts to Naver Plus membership benefits, Naver could further expand its user base. Since last October, Naver has also strengthened its partnership with Uber by providing Uber’s paid membership benefits to Naver Plus members.

If the M&A is successful, a seismic shift in the food delivery app market will be unavoidable. Baemin, the number one food delivery app, has recently seen its position shaken by the aggressive offensive of Coupang Eats, backed by Coupang. Coupang is quickly closing the gap with Baemin by linking services such as Coupang Eats, robot delivery, the WOW membership, and the online video service Coupang Play. For Naver, which does not own its own logistics network, merging with Baemin would strengthen its previously weak delivery competitiveness and allow it to build a tighter rider network. In particular, what Naver truly desires from acquiring Baemin is ‘user data.’ In the future, Naver could secure a vast amount of lifestyle data, including user locations, food preferences, consumption patterns, and payment data.

A senior Naver official said, “We cannot disclose specific conditions such as the investment amount for the Baemin acquisition or the consortium ratio,” adding, “There are many factors to consider, including the Fair Trade Commission’s review and internal considerations, so thorough discussion is required.” There are also concerns within Naver regarding the focus on commerce. With global big tech competition driven by artificial intelligence (AI) fiercer than ever, some critics argue that focusing on immediate ‘cash cows’ rather than investing in technology for overseas expansion, which is a key growth engine, may be tantamount to admitting one’s own limits. To break through the limitations of the domestic market and pursue full-scale international expansion, it is pointed out that Naver should prioritize discovering promising tech companies and seeking ways to monetize AI.

An industry insider said, “Currently, the most likely scenario is that Naver will avoid monopoly concerns by holding a strategic minority stake, obtain conditional approval from the Fair Trade Commission, and freeze commission fees for a set period,” adding, “Because food delivery apps are directly tied to public livelihood, there could be growing controversy over foreign control if Uber were to acquire Baemin alone. That is why the interests of Naver and Uber have aligned for a joint acquisition.”

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