[Inside Chodong] The Other Side of the Packaging Order Commission Controversy

Kim Cheol-hyun, Deputy Director of the Bio Startup and Venture Department

"There’s nothing left after paying the commission," "We need to stop the packaging discount." On the 31st of last month, when Baedal Minjok announced its plan to impose a commission fee on packaging orders, restaurant owners poured out their complaints. As negative reactions continued, some politicians also joined in, condemning it as the bullying of a monopoly company. They even called the 6.8% cut for just taking orders 'petty.'

However, Baedal Minjok seemed caught off guard by the overwhelmingly critical response. The restructuring of the packaging intermediary fee was already announced last April as an additional measure for voluntary regulation by the Fair Trade Commission, and competitors are already charging packaging order commissions exceeding 10%. They have operated the service free of charge for four years since its launch, and most existing registered merchants will continue to be exempt from fees until next year, so they clearly feel unfairly accused of 'bullying.'

To understand this difference in stance, it is necessary to closely examine the packaging order commission policies of Baemin and other delivery platform companies. Baemin announced that starting next month, it will impose packaging order commissions on newly registered merchants. The commission rate is set at 6.8%, the same as for delivery. Existing merchants will have the fee imposition deferred until March next year, maintaining the free policy for now.

Here, Baemin emphasized extending the free policy by one year until the end of March next year. Since most Baemin-registered businesses use the packaging order service, they believe there will not be many 'newly registered merchants' immediately affected by the fee. There is also a view that packaging accounts for only a single-digit percentage of Baemin’s total orders, so the burden on merchants will not increase significantly. However, from the merchants’ perspective, they cannot help but focus on the fact that the free policy will not be maintained after next year. Given how tough things already are, news of increased burdens is hardly welcome.

So, is it necessary to impose a commission fee on packaging order services? If so, what is an appropriate commission rate? Like delivery, the packaging order service exposes the store through the app and generates orders that translate into sales for the registered restaurants. The platform claims that system operation costs are the same as for delivery services.

Both domestic and international delivery platforms charge packaging order commissions comparable to those for delivery orders. In fact, domestically, Yogiyo charges a 12.5% packaging order commission, the same as for delivery. Overseas, Deliveroo in Europe charges 12%, and GrabFood in Southeast Asia charges up to 15% for packaging orders. DoorDash and Uber Eats require merchants to subscribe to the packaging order service mandatorily, with commissions around 6%.

Looking at competitors and global market cases, it is somewhat unreasonable to accuse Baemin of 'bullying.' Nevertheless, the reason Baemin faces concentrated criticism is likely because it is the domestic leader and exerts enormous influence on the ecosystem’s members. Even a small policy change by Baemin stirs up the livelihoods of countless restaurant owners. Even if charging commissions on orders through the app’s intermediary function is justified, if it is clear that the burden on merchants will increase, there should have been consultation and explanation regarding the decision-making process and countermeasures.

Baemin has continuously improved its packaging service functions. It also announced plans to implement policies to activate packaging orders. Now is the time to discuss with merchants not vague plans, but how to create a virtuous cycle structure where commissions are reinvested into service activation.