One Month of Baemin Win-Win Pricing Plan... Concrete Support Effects for Small Business Owners

Up to 37% Reduction in Delivery Costs for Business Owners at Baemin

Baedal Minjok's 'Win-Win Pricing Plan' implemented this year is showing concrete effects in supporting small business owners. Since applying the Win-Win Pricing Plan at Baemin from the end of February, the delivery cost burden on business owners has decreased by up to 37% over one month. Starting this month, Coupang Eats has also launched a pricing plan with the same rate as Baemin, and the effect is expected to spread throughout the industry.

According to Baemin on the 9th, a comparison of the delivery cost burden (intermediary commission and delivery fee) on business owners before and after the implementation of the Win-Win Pricing Plan on February 26 showed a 36.7% decrease in the top 80?100% sales bracket. This result was based on analyzing the business owners' burden for 25 days each from February 1 to 25 before the plan and from February 26 to March 22 after the plan was implemented. Additionally, the top 50?80% sales bracket saw a 13.5% decrease, and the 35?50% bracket saw a 10.2% decrease. However, in the top 35% bracket, the reduction in business owners' burden was only 0.2%.

The effect of the Win-Win Pricing Plan, which required business owners with lower sales to pay lower commissions and delivery fees, has been confirmed in actual figures. Baemin applied differentiated intermediary fees and delivery costs based on four sales brackets according to the win-win agreement reached last year in the delivery platform win-win council. The top 35% sales bracket was charged 7.8%, the 35% to 80% bracket 6.8%, and the 80% to 100% bracket 2.0%. Delivery fees ranged from 1,900 to 3,400 KRW, with lower fees for lower sales.

Comparing business owners with similar order volumes before and after the Win-Win Pricing Plan confirms its benefits. For example, a franchise cafe in Seoul had a business owner burden of about 305,000 KRW for 67 orders in the 25 days before implementation, but despite an increase to 69 orders after implementation, the burden decreased by about 30% to around 213,000 KRW, Baemin explained.

Moreover, business owners in the lower sales brackets were able to generate sales through the reduced commissions. In fact, comparing February and March on Baemin, a fruit and beverage franchise in Daejeon was previously passive about delivery with only one delivery order in February before the Win-Win commission was implemented, but increased to 465 orders in March, actively boosting sales.

According to Baemin, even in the upper sales brackets where delivery fees increased, the reduction in commission led to a slight decrease in business owners' delivery costs. For example, a yogurt shop in Seoul received 99 delivery orders during the same period before and after the Win-Win Pricing Plan, but the business owner’s burden decreased from about 549,000 KRW to 530,000 KRW. An industry insider said, "Considering that the average order value on delivery apps is around 25,000 KRW, the business owners' burden, which was about 5,000 KRW per order, has diversified to between 3,000 and 5,000 KRW per order. Starting from the 1st of this month, Coupang Eats has also launched a Win-Win Pricing Plan with the same commission rate but a different operating method, so the impact on the industry is expected to expand further."