77.6% of Consumers Expect Higher Delivery Fees
Significant Decline in Usage Anticipated If Free Delivery Is Reduced
A recent survey found that the cap on delivery application (app) fees could increase the burden on consumers and lead to a decline in sales for small business owners.
On December 26, the Korea Consumer Education Support Center announced the results of a consumer perception survey on delivery app usage, which included these findings. The survey was overseen by Lee Eunhee, Professor Emeritus of Consumer Studies at Inha University and research director at the Korea Consumer Education Support Center. It was conducted by the online research firm Open Survey and targeted 1,000 domestic delivery app users in their 20s to 50s, including 100 parents with young children. The analysis focused on consumer perceptions of increased burden if a fee cap is introduced, expectations for menu price reductions, the potential reduction of consumer benefits such as free delivery, and changes in usage behavior.
The results showed that 77.6% of respondents believe that if a fee cap is implemented, the delivery fees directly paid by consumers will increase. In particular, this proportion rose to 82% among households with young children, indicating that the burden from policy changes may disproportionately affect certain consumer groups. Among those in their 20s and 30s, 61.7% responded that the fee cap would increase their burden, a higher rate than those in their 40s (56.9%) and 50s (53.4%).
Additionally,62.3% of respondents said that menu prices would not decrease even if the fee cap is implemented, while only 6.7% expected menu prices to drop. On the other hand,consumers expressed concerns about increased delivery fees and a reduction in free delivery benefits as a result of the fee cap.58% cited the potential disappearance of free delivery as their greatest concern regarding the introduction of the fee cap. The Korea Consumer Education Support Center explained that if consumers face higher delivery fees and the loss of free delivery, a decrease in usage is inevitable, which could directly lead to reduced sales for small business owners and a contraction of the market.
Looking at changes in consumer behavior due to increased delivery fees, only 6% of parents with young children said they would dine out more often if free delivery disappeared. In contrast, 86% responded that they would cook at home after grocery shopping or opt for ready-made or instant meals. The analysis suggests that artificial regulation of delivery app fees could lead to a 'demand cliff' not only in the delivery app market but also across the entire food service industry, resulting in unpredictable side effects.
In response, the Korea Consumer Education Support Center called for: ▲an official consumer welfare impact assessment involving experts before introducing a fee cap ▲the formation of a policy consultative body including key consumer groups such as young adults, parents with young children, and delivery riders as actual stakeholders ▲refraining from pushing legislation without measures to address increased consumer delivery fees and the reduction of free delivery or discounts ▲a comprehensive review of ongoing policies to ensure precise policy design that balances the protection of small business owners with consumer welfare.
Lee Eunhee, Professor Emeritus of Consumer Studies at Inha University, stated, "Consumers do not expect a fee cap to result in lower food prices; instead, they are concerned about increased delivery fees and reduced benefits."She added, "If changes in consumer welfare and actual consumer behavior are not thoroughly considered during the policy design stage, the structural problem of reduced consumer usage leading directly to lower sales for small business owners may be repeated."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
