Baemin to Waive Fees for Orders Under 10,000 Won... Agrees on Additional 300 Billion Won Win-Win Plan

Woowa Brothers and Merchant Groups Reach Interim Social Dialogue Agreement
Full Fee Waiver for Orders of 10,000 Won or Less
Tiered Support for Orders up to 15,000 Won
Up to 300 Billion Won in Support Over Three Years

Baedal Minjok has decided to fully waive intermediary service fees for all orders of 10,000 won or less, based on order amount. The company also plans to provide tiered support for delivery fees to reduce the burden on business owners. Baemin predicts that this win-win initiative will generate support effects of up to 300 billion won over the next three years.

Woowa Brothers, the operator of Baemin, announced on the 19th that it had reached an interim agreement on these additional win-win measures during social dialogue with franchisee organizations such as the National Franchisee Association and the Association for Fair Platforms, mediated by the Democratic Party of Korea’s Eulji Protecting People's Livelihood Practice Committee (Euljiro Committee). This outcome comes just one month after discussions between Baemin and business owner groups were reorganized into a social dialogue under the mediation of the Euljiro Committee in May.

On the 19th, Min Byungduk, chairman of the Euljiro Committee of the Democratic Party of Korea, spoke at the briefing announcing the interim agreement of the social dialogue body for delivery apps (Baedal Minjok) held at the National Assembly Members' Office Building. Second from the left is Kim Beomseok, CEO of Woowa Brothers. Photo by Kim Hyunmin

This win-win plan includes measures to ease the burden on business owners, promote sales growth through increased orders, and improve operational convenience for business owners using the Baemin application. According to the agreement, Woowa Brothers will first fully waive intermediary fees for Baemin merchants on orders of 10,000 won or less, and will provide tiered support for delivery tips that are currently borne by business owners. Additionally, intermediary fees will be discounted on a tiered basis for orders exceeding 10,000 won but not exceeding 15,000 won. The specific support methods will be determined at a later date.

The reason this plan focuses on supporting small-amount orders is the recent surge in demand for small orders in the delivery market, driven by the increasing trend of single-person households. Baemin’s recently launched “Hangureut” service, which is dedicated to small orders with no minimum order amount, saw its order volume in the first week of June increase more than fourfold compared to the previous month, demonstrating rapid growth.

This is analyzed as a result of the continued increase in single-person households, which has led to greater demand for “honbap” (eating alone) and the convenience of resolving a meal with delivered food. However, as the order amount decreases, the proportion of the burden borne by business owners increases. For example, for a 10,000 won order, the burden rate for business owners, including intermediary service fees and rider delivery fees, exceeds 40%.

In response, Woowa Brothers plans to implement support measures that increase support for business owners as order amounts decrease, including waiving fees for orders of 10,000 won or less, to prevent the burden on business owners from becoming excessively high. With this additional win-win plan, business owners are expected to significantly reduce their burden for intermediary service fees on single-serving orders, and to pursue increased order volume and sales growth.

An official in the food service industry stated, “If a customer is satisfied after trying a single-serving meal, it is highly likely to lead to a repeat order with a higher amount,” adding, “For business owners, small-amount orders can serve not only to increase order volume but also as a marketing tool.” Woowa Brothers expects that as the burden of intermediary service fees on business owners is eased, users will also benefit from more choices at lower prices, leading to an overall improvement in consumer welfare.

Woowa Brothers and the franchisee organizations also agreed to deduct intermediary service fees for the portion of franchise headquarters-issued discount coupons that are contributed by business owners. While Baemin has already been deducting intermediary fees for discounts borne by business owners, it was previously difficult to include franchise headquarters-issued coupons in the deduction because Baemin could not determine in advance whether business owners were responsible for the discount. Baemin will now establish a system to share this information in advance, so that deductions will also be applied to franchise headquarters-issued discounts, further reducing the burden on business owners.

In addition, agreements were reached on establishing a dedicated consultation center for franchisees, improving the loss compensation application system, simplifying the written procedure forms for business owners, and building a communication system between franchisees and riders. Through these measures, Baemin expects to significantly improve the convenience of delivery operations for its franchisees.

Woowa Brothers estimated that, under this additional win-win plan, up to 100 billion won per year and up to 300 billion won over three years would be provided in support to franchisees. The current win-win fee system, under which intermediary service fees for Baemin1 Plus franchisees are applied on a tiered basis from 2% to 7.8%, will remain unchanged and is not affected by this additional win-win plan.

Kim Beomseok, CEO of Woowa Brothers, said, “With this interim agreement, we have not only alleviated the burden on our franchisees but also created a new opportunity for growth. In a situation where single-person households are increasing, support for small-amount orders is expected to bring convenience and benefits to consumers, and increased order volume and reduced burden for business owners.”