Baemin vs Coupang 'Single-Order Delivery' Market Expanded

User Numbers Increased Side by Side Last Month
Demand Expected to Rise Further with 4th Level Upgrade

The competition of 'single-order delivery,' where one delivery rider handles one order, is expanding the 'pie' of the delivery application (app) market. Last month, Baemin and Coupang Eats, which engaged in an all-out battle for single-order delivery centered around Gangnam, Seoul, both showed an increase in users. It is analyzed that the high-quality delivery competition of single-order delivery led to the influx of new users. With the social distancing level in the metropolitan area raised to level 4, delivery demand is expected to increase, and the market size is projected to expand further.

According to Mobile Index by data company IGAWorks on the 13th, based on Android and iPhone (iOS) smartphones last month, the number of users (MAU) of Baemin and Coupang Eats exceeded 20 million and 5.5 million, respectively. Baemin's users increased by 5.9% compared to two months ago in April, reaching 20,127,000, while Coupang Eats grew by 14% to 5,502,000 during the same period.

◆Effect of Single-Order Delivery... Coupang Eats' Rapid Growth Slows=Considering that the total monthly users of delivery apps remained around 20 million until the end of last year, the recent market expansion appears to be due to the single-order delivery competition between Baemin and Coupang Eats that began in earnest this year. As Coupang Eats, which prominently adopted single-order delivery assigning only one delivery rider per order, showed a steep increase in users, Baemin, the market leader, launched its single-order delivery service 'Baemin1' last month. As more users experienced single-order delivery, bundled delivery was relatively perceived as a lower-quality service.

Baemin1 started last month in Songpa-gu, Seoul, countering Coupang Eats, which had expanded to all of Seoul in June last year after receiving great response in Gangnam, Seocho, and Songpa. Baemin then expanded the service area to Gangnam, Seocho, Yongsan, Seongdong, Jongno, Dongjak, Yeongdeungpo, and Jung-gu. On the 6th of this month, it added 16 more districts, expanding the service area to all of Seoul. The plan is to provide service throughout the metropolitan area by the end of this year.

With Baemin's entry into the single-order delivery market, Coupang Eats' rapid user growth has slowed. Coupang Eats' users increased by 37.4% in February compared to December last year, but the growth rate slowed to 23.5% in April and 14% in June compared to two months prior. Considering that in February, users surged by 110% compared to November last year, the upward curve has clearly flattened.

◆Baemin vs Coupang Full-Scale Battle Expands to Quick Commerce=Single-order delivery offers higher delivery quality but requires sufficient delivery riders, unlike bundled delivery that handles 3 to 4 orders at once. Accordingly, Baemin and Coupang Eats are competing to secure delivery riders through various promotions. They are also enduring financial losses by investing large-scale capital to guarantee delivery riders' earnings.

Industry insiders expect that based on the competitiveness built through single-order delivery, delivery apps will expand their service areas to non-food categories such as daily necessities. Coupang Eats' launch of food and daily necessities delivery service this month is a representative example. Coupang Eats recently added a 'Mart' category and started a service delivering daily necessities within 10 to 15 minutes after ordering. This service is currently being piloted only in the Songpa-gu area of Seoul but is expected to gradually expand throughout Seoul. This means it will compete directly with Baemin's 'B Mart,' an immediate delivery service for daily necessities and groceries. An industry official said, "Single-order delivery will expand beyond food delivery to quick commerce. Competition among companies to capture the increased demand due to the metropolitan area's level 4 social distancing is expected to intensify further."