23 Million Delivery App Users Last Month... Over 1.8 Million Decrease in 2 Months
#Office worker Kim Young-hwan (alias) recently deleted delivery applications (apps) from his phone. With rising prices and increased loan interest payments to the bank every month due to interest rate hikes, he decided to cut expenses even by a small amount. Instead of using delivery apps, where the minimum order amount plus delivery fees often cost more than 20,000 won per meal, Kim chose to shop for groceries and prepare meals himself despite the inconvenience.
The number of delivery app users is decreasing. Nearly 2 million users have left this market in the past two months. More users are feeling burdened by paying both rising food prices and delivery fees. The increase in interest costs due to rate hikes, which has put many wallets under pressure, is also considered a contributing factor.
According to Mobile Index by data company IGAWorks on the 7th, the number of users in the delivery application category on Android and iPhone (iOS) smartphones last month was 23.12 million. This is about 1.86 million fewer than in August. In two months, nearly 2 million users have exited the delivery app market.
Excluding duplicate users, the decrease of about 2 million affected all three major delivery apps. Last month, the monthly active users (MAU) of Baemin (Baedal Minjok), Yogiyo, and Coupang Eats were 19.93 million, 6.67 million, and 3.65 million respectively. Compared to August, Baemin lost 1.59 million users, Yogiyo 990,000, and Coupang Eats 700,000. Compared to October last year, Baemin, the market leader, saw a decrease of 770,000 users, while Yogiyo and Coupang Eats dropped by 1.09 million and 1.81 million respectively.
The industry views the recent user decline as largely influenced by high inflation, following the reflection of decreased delivery orders due to the lifting of social distancing earlier this year. Food prices are rising, and ordering through delivery apps requires additional delivery fees, causing users to hesitate. In fact, according to Statistics Korea, prices of most processed food items such as cooking oil and flour increased compared to a year ago last month. Cooking oil rose by 42.8%, flour by 36.9%, pancake mix by 30.8%, and noodles by 29.7%, showing particularly high rates of increase.
Additionally, delivery fees are also rising. According to the Korea Consumer Agency, comparing delivery fees from August to October, 9.9% of surveyed companies raised their delivery fees. This cost increase is a major factor causing users to refrain from using delivery apps. This is reflected in Statistics Korea’s recent report on 'September 2022 Online Shopping Trends,' which showed a 7.8% decrease in food services, including delivery orders, compared to the previous year.
The industry is even sensing a crisis that the delivery ecosystem could be shaken if the user decline continues. An industry insider said, "Delivery platform companies are seriously aware that users are leaving the entire market, not just being taken by competing services," adding, "They are focusing on devising strategies to build a sustainable delivery ecosystem in the long term."
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