Delivery Win-Win Council Develops Commission Reduction Plan... From 9.8% to 2.0?7.8%
System Overhaul by Delivery Platform Operators to Be Implemented Early Next Year
The ‘Delivery Platform-Merchant Win-Win Council’ has dramatically succeeded in deriving a commission win-win plan. The existing brokerage commission of 9.8% will be applied differentially at rates ranging from 2.0% to 7.8% depending on the transaction amount. Baedal Minjok and Coupang Eats, which had shown differences in position until now, created a unified plan at the last minute, and this plan gained the consent of the public interest committee and merchants based on the judgment that it could help small business owners who are currently facing difficulties. According to this win-win plan, the commission revenue of delivery platforms such as Baemin and Coupang Eats is expected to decrease somewhat. The delivery fee paid by consumers ordering food will remain unchanged.
On the 15th, the Delivery Platform-Merchant Win-Win Council announced at the 12th meeting held the previous afternoon that it had prepared a brokerage commission reduction win-win plan after reviewing the final win-win plan of Coupang Eats and Baemin. The win-win plan agreed upon by Baemin and Coupang Eats this time is the plan proposed by Baemin, which charges brokerage commissions based on transaction amounts as follows: for the top 35%, a brokerage commission of 7.8% with a delivery fee of 2,400 to 3,400 KRW; for the 35-50% middle tier, a brokerage commission of 6.8% with a delivery fee of 2,100 to 3,100 KRW; for the 50-80% middle tier, a brokerage commission of 6.8% with a delivery fee of 1,900 to 2,900 KRW; and for the bottom 20%, a brokerage commission of 2.0% with a delivery fee of 1,900 to 2,900 KRW. The application period is for the next three years. Coupang Eats had proposed a plan with a higher commission rate than this, but decided to implement the same plan after judging that Baemin’s lower commission proposal aligns better with the purpose of the Win-Win Council.
If this plan is implemented, it is expected to provide practical help to small business owners. Both Baemin and Coupang Eats will reduce their commission rates by up to 7.8 percentage points and at least 2.0 percentage points from the existing 9.8%. The delivery fee will increase by 500 KRW in the highest tier. In Baemin, which has the most merchants, stores in the bottom 65% of transaction amounts will see their commissions reduced from 6.8% before the 9.8% increase, easing their burden. Baemin explained that about 130,000 merchants will benefit from reduced cost burdens. In particular, the bottom 20% will be subject to a significant reduction, applying a 2% commission rate comparable to public delivery apps. This is evaluated as reducing the burden on struggling small self-employed business owners and providing new growth opportunities. Lee Jeong-hee, chair of the public interest committee and professor of economics at Chung-Ang University, said, “Considering the delivery fee, the reduction effect is 2.3 percentage points in the 35-50% tier, 3 percentage points in the 50-80% tier, and 7.8 percentage points in the 80-100% tier.”
Regarding the win-win plan agreed upon by Baemin and Coupang Eats, merchant organizations expressed that since many small business owners are facing difficulties due to the recent economic situation, it is desirable to implement this win-win plan even if there are some shortcomings, as it can help them.
Some opinions were also raised that the win-win plan proposed by the two companies is not sufficient to ease the burden. According to participants in the Win-Win Council, the Korea Foodservice Industry Association and the National Franchisee Association expressed opposition, while the Small Business Federation, the National Merchants Federation, and public interest committee members approved the plan, leading to its passage. The opposing organizations appeared to have disagreements because they represent the positions of large franchise companies or major franchise owners. Chair Lee Jeong-hee said, “Although there was opposition from some merchant organizations, we decided to accept the final revised plan of Baemin and Coupang Eats out of concern that delays would increase the damage to small business owners.” Baemin and Coupang Eats plan to carry out system preparations for implementing the win-win plan so that it can be applied and enforced early next year.
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