[Public Voices] Commission Fees on Pickup Sales: What Are the Long-term Impacts on the Takeout Market?

"We Need a New Perspective on the Positive Functions of Delivery App Commissions"
Negative Perceptions Persist, but User Convenience and Market Growth Should Also Be Considered

Recently, Baemin decided to impose a 6.8% commission fee on takeout orders as well. Restaurant owners, already struggling with high prices, demanded a reversal of the decision, arguing that even takeout orders are now being charged. Some consumers also expressed their intention to boycott takeout, fearing that the commission fees would lead to higher menu prices.

In our society, there is a fundamentally negative perception toward intermediary fees (commissions) imposed by platforms. The prevailing view is that it is unreasonable for platforms to simply act as intermediaries between consumers and restaurants and take a commission for it. Considering the proportion and significance of platform companies in the consumer market, as well as the ongoing controversies, it is difficult to ignore these sentiments. Companies also need to listen to these voices and actively communicate in order to secure consumer trust and foster a healthier market environment.

Nevertheless, it is important to recognize that platforms play a positive role by using commission fees to provide convenience and benefits to consumers, thereby driving the growth of the market itself. No market, including the food service industry, can grow unless it attracts consumers. This is especially true in Korea, where competition among businesses is extremely fierce.

"We Should Not Overlook the Positive Role of Platforms"

The total number of restaurants in Korea is reportedly similar to that of the United States, which has a population 6.7 times larger. This suggests that the intensity of competition is beyond imagination. Therefore, it is more important to increase the absolute number of orders and the overall sales volume in the market, rather than focusing solely on competition among individual business owners. In this context, it is noteworthy that, despite the overall food service industry entering a recession after the endemic, the online food service order market alone has recovered its growth trend.

According to Statistics Korea's 2024 Online Shopping Trends Analysis, the value of online food service orders in December last year reached a record high of 2.8439 trillion won, up 17.5% from a year earlier. Experts attributed the market's growth mainly to the "free delivery" services offered by delivery platforms last year, which reduced the delivery fee burden for consumers. The benefits provided by platforms to consumers led to increased order activity, which in turn drove the growth of the online food service market.

"Could Be the Catalyst for Growth in Total Order Volume"

It is worth considering whether the same logic could apply to the takeout market. If platforms target consumers who prefer takeout by offering discount coupons and other benefits, as well as convenience, the total number of orders could increase. If the total number of takeout orders grows, restaurant owners' total sales are likely to rise, along with improvements in profit margins.

Moreover, as takeout orders increase, restaurant owners can reduce delivery costs. Therefore, focusing solely on the new burden of takeout intermediary fees for business owners may be shortsighted. Rather than demanding that platforms eliminate their profit models altogether, it is more desirable to allow them to maintain reasonable profitability and, based on that, provide consumer benefits and convenience, thereby encouraging the overall expansion of the market.

On Baemin, takeout menus are displayed intuitively, whereas on other applications, this is not the case. There is a need to consider, in the long term, whether it is truly better for restaurant owners and consumers to have takeout services offered for free but placed in less visible locations, or to have them prominently displayed with enhanced marketing to boost orders.

Bae Ilhyeon, Professor of Distribution Management, Hyupsung University