Yogiyo Seeks New Path with 'Commission Counterattack'
The competition between Baedal Minjok (Baemin) and Coupang Eats over ‘free delivery’ subscription services is heating up. Baemin launched its subscription service ‘Baemin Club’ in May to counter Coupang Eats’ free delivery service for Wow members, but with a free trial period in place, it has only been a ‘preliminary battle’ so far. During this period, both Baemin and Coupang Eats saw an increase in users. The initial outcome of the intensified subscription service competition between the two companies is expected to become clearer after August, as variables such as Baemin Club’s transition to a paid model and Coupang’s Wow membership fee increase will coincide this month.
On the 8th, data company IGAWorks reported through Mobile Index that last month, the number of users (MAU) for Baemin, Coupang Eats, and Yogiyo were 22.28 million, 7.54 million, and 5.53 million respectively. Compared to the previous month, Baemin and Coupang Eats increased by approximately 150,000 and 200,000 users respectively, while Yogiyo saw a slight decrease.
What stands out is that Baemin, which had been on a continuous decline until April this year, reversed to an upward trend starting in May after launching its subscription service. Compared to April, Baemin’s users increased by more than 540,000. The subscription strategy emphasizing free delivery is proving effective in the market. Riding this momentum, Baemin plans to expand its free delivery service, which was previously limited to restaurants delivering with Baemin riders, to also include restaurants that use separate delivery personnel, allowing them to participate in Baemin Club. Baemin currently has the largest number of restaurants among domestic delivery apps, with a total of about 320,000 restaurants including those using Baemin rider delivery and store delivery, which is expected to give it an advantage in securing free delivery restaurants.
Due to Baemin’s aggressive moves, Coupang Eats’ growth, which had been increasing users by offering discounts and free delivery to Wow members, has slowed down. Although Coupang Eats saw a steep user growth of nearly 10% after launching its free delivery service this year, last month’s growth was limited to 2.8% compared to the previous month.
The real competition between the two companies begins this month. Until now, Baemin Club services were applied to anyone without separate registration or procedures. However, starting from the 20th of this month, users must subscribe and register a payment method to receive free delivery benefits. Baemin is actively working to secure subscribers by offering free usage coupons and other incentives. Another variable is that Coupang’s Wow membership price increase will also apply to existing Coupang members this month. If members leave due to the price hike, Coupang Eats users could decrease as well. However, Coupang itself believes this increase will not have a significant impact. Although it announced plans in April to raise the monthly fee from 4,990 won to 7,890 won, the number of active Coupang customers in Q2 was 21.7 million, a 12% increase compared to the same period last year.
Yogiyo, which has fallen to third place, is launching a counterattack through commission fees, which could also influence changes in the market landscape. On the 1st of this month, Yogiyo lowered its basic order mediation commission to 9.7%. Considering that Baemin raised its commission last month from 6.8% to 9.8%, the same as Coupang Eats, Yogiyo has set the industry’s lowest commission rate. Additionally, Yogiyo emphasizes that for stores eligible for its free delivery subscription product, it supports customer delivery fees regardless of the delivery type and also covers delivery fees for store’s own delivery services.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
