Global Market Expansion 'Baemin Dream' Faces Greatest Crisis

Baemin, Aiming for Overseas Expansion, Still Faces Challenges in Future Market Development

[Asia Economy Reporter Kim Cheol-hyun] The Fair Trade Commission (hereinafter FTC) has concluded that Delivery Hero (hereinafter DH) must divest Yogiyo in order to proceed with the merger with Woowa Brothers, triggering warning signals for Baemin's overseas business as well. If DH refuses the FTC's decision and cancels the merger itself or engages in a prolonged legal battle such as administrative litigation, Baemin's plans to pioneer the Southeast Asian market together with DH will inevitably face setbacks.

On the 28th, the FTC conditionally approved the merger in which DH acquires about 88% of Woowa Brothers' shares, while imposing the condition that DH must divest 100% of Delivery Hero Korea (DHK) shares. In other words, to acquire Baemin, DH must sell Yogiyo. Industry insiders believe it will not be easy for DH to accept the divestment of Yogiyo, which it has repeatedly opposed. If the M&A fails or is further delayed, Baemin's strategy to enter overseas markets through this will inevitably need to be revised.

Initially, if the M&A was approved, Kim Bong-jin, chairman of Woowa Brothers, was to become the CEO of Woowa DH Asia, the hub for pioneering the Asian market. Woowa DH Asia is a joint venture established in Singapore with a 50-50 equity investment by Woowa Brothers and DH. Chairman Kim was scheduled to oversee operations in 11 Asian countries including Taiwan, Laos, and Indonesia as the CEO of Woowa DH Asia.

Baemin has successfully entered Vietnam and recently started full-scale operations in Japan, laying the groundwork for its Asian market strategy. If the M&A had been approved, DH would have secured management rights over businesses established through investments in 11 Asian countries, allowing Baemin's global business to take off at once. However, if the deal falls through, Woowa Brothers will have to independently knock on the doors of local markets like Vietnam and Japan.

The background of Baemin's Asian market entry plan includes concerns that if a giant company with abundant financial resources enters the Korean market amid active M&A among delivery companies worldwide, it may be difficult to defend the market. In the U.S., for example, in June, Dutch delivery app Takeaway acquired the second-largest market share company Grubhub, and in July, the third-largest Uber Eats acquired the fourth-largest Postmates, showing active M&A among companies.

Because of this, there are concerns in the industry that the FTC's decision may cause the loss of opportunities for global companies to emerge in this sector and potentially jeopardize the domestic market as well. An industry official said, "Baemin aimed for global expansion beyond the domestic market through a strategic merger with DH," adding, "A free and fair ecosystem must be created so that domestic startups can become key players in the global digital economy, but the FTC's decision is a measure that drives isolation and regression of the domestic startup ecosystem."