Delivery Fee Is 0 Won... Why Are There Complaints About '30,000 Won Chicken'? [Chosun Price Records]

⑮Consumers Rejoice at 'Free Delivery Fee'
Store Owners Frown as Delivery App Commissions Rise
"The More We Sell, The More We Lose; May Need to Raise Food Prices"

The delivery fee, once blamed as the main culprit behind the "30,000 won chicken era," has become "0 won." Although there were complaints that high delivery fees contributed to the rise in dining-out prices, consumers are now welcoming the shift as delivery app companies have adopted a "free delivery" policy. On the other hand, store owners complain that delivery apps have raised commissions, increasing their burden, and if losses grow, they will have no choice but to raise food prices.

Chicken stock photo. [Image source=Getty Images]

According to the Dining-Out Delivery Price Index (experimental statistics) released by Statistics Korea on the 28th, consumers' delivery fee burden has been decreasing this year. Using November 2022 as the base month with an index of 100, the index soared to 104.3 in December 2023 but dropped to 99.2, 99.2, and 97.9 in January, February, and March of this year, respectively. An index above 100 indicates a price increase compared to the base period, while below 100 indicates a decrease.

The photo is not related to the specific content of the article. Photo by Yonhap News.

Coupang Eats started offering unlimited free delivery services to Coupang membership members from the 25th of last month. Baemin (Baedal Minjok) has been providing a free budget delivery service that delivers orders from multiple restaurants together since the 1st of this month. Yogiyo offers free delivery for orders over 15,000 won through Yogibae (budget delivery and single restaurant delivery) starting from the 5th of this month.

Consumers 'Welcome' the Disappearance of Delivery Fees... Store Owners 'Frown'

Delivery fees have long been the main driver of rising dining-out prices. During the COVID-19 period, the dining-out delivery market expanded, and ordering food through delivery platforms became common, causing delivery fees to rise sharply.

Even considering that delivery fees fluctuate frequently depending on distance, delivery type, time, and weather conditions, there have been cases where delivery fees exceeded the food price, leading to criticism that "the tail is bigger than the belly." The government introduced the Dining-Out Delivery Price Index to understand how much delivery fees contribute to the rise in dining-out prices.

With delivery fees becoming free, consumers are rejoicing. According to the "Delivery App Market Analysis Report" released by the app analysis platform Mobile Index on the 9th, Coupang Eats, which ranked third in user numbers, surpassed second-ranked Yogiyo after declaring free delivery. The number of Coupang Eats app installs, which was only in the 10,000 range in early March, surged to the 40,000 range on the 18th of the same month, the day the free delivery announcement was made.

The problem is that self-employed business owners may suffer from the cutthroat competition in the delivery industry. They already bear significant costs such as intermediary and card fees and delivery charges paid to delivery platforms, but this year, major delivery apps raised commissions, effectively shifting the burden of "free delivery fees" onto store owners.

Baemin launched a fixed-rate fee plan called "Baemin 1 Plus" in January, where store owners bear an intermediary commission of 6.8% and payment fees of 1.5?3%. Previously, store owners' delivery fee burden was around 1,000?2,000 won, but under the new plan, delivery fees are set between 2,500 and 3,300 won. Moreover, since it is a fixed-rate system, commissions increase as sales grow. Coupang Eats' newly introduced "Smart Fee Plan" charges a commission of 9.8% based on sales. Additionally, there is a delivery fee of 2,900 won, a payment fee of 3%, and a 10% VAT.

The new fee plans are not mandatory. However, since only store owners using the new plans receive benefits such as free delivery, discounts, and increased app screen exposure, store owners are forced to choose them reluctantly.

A store owner expressed complaints about delivery app fees in the largest self-employed community, "Apeunikka Sajangida." Photo by Apeunikka Sajangida capture.

The largest self-employed community, "Apeunikka Sajangida" ("Because It Hurts, I'm a Boss"), is flooded with posts lamenting "there's nothing left after selling." One store owner said that although sales were 31,000 won, after deducting order intermediary fees (3,038 won), card and payment fees (930 won), delivery fees (2,500 won), and VAT (647 won), the settlement amount was only about 23,000 won, raising their voice, "Is this commission for one delivery even reasonable?"

Chicken brand store owners also complain that delivery commissions and fees are being passed on to them. Recently, representatives of the five major chicken brands nationwide?BHC Chicken, Kyochon Chicken, Goobne Chicken, BBQ Chicken, and Puradak?stated that if this situation continues, they will have no choice but to raise chicken prices.

They said, "When selling a 20,000 won chicken, 6,000 won is deducted for delivery commissions and fees," adding, "Instead of making a profit, loss-making reverse margins are occurring all over the country as sales increase." They warned, "If this continues, we may have to close our businesses or raise food prices, leading to an extreme situation. The day when a chicken costs 30,000 to 40,000 won is not far off."