Baemin sales surge 70-fold from 2014 on pandemic delivery demand

Korea’s food delivery app Baemin logged 2.3 trillion won ($1.8 billion) in sales last year, a 70-fold surge from 2014 when it started filing financial reports to authorities, its operator Woowa Brothers said in a regulatory filing Tuesday.

“The stellar performance in recent years was largely driven by COVID-19, with many restaurant partners joining our app,” said an official from Woowa Brothers.

In 2020, the first year of the pandemic, the company surpassed 1 trillion won in revenue for the first time.

Woowa Brothers’ profit, however, decreased on-year by 82.8 percent to 10 billion won in 2021.

“We have spent on extra costs to cover for low commission rates in order to secure more restaurants and customers amid the heated competition in the food delivery business,” the official said.

To make the business profitable, the company scrapped a promotional discount policy and introduced a new price list. But the new pricing of the service has been under criticism both from customers and partner restaurants.

The company had charged customers 5,000 won for Baemin1, the single-order express delivery service within the app, with partner restaurants paying an additional 1,000 won as commission per order.

Under a new pricing system implemented since last Friday, restaurants have to pay 6.8 percent of the order as commission to Woowa Brothers and jointly cover the 6,000 won delivery fee with users.

Due to the increased price burden, some restaurant owners are asking customers to refrain from using Baemin1, industry sources said.

The company has defended the pricing system, saying that compared to other delivery services, “Baemin1’s commission rate is considerably low.”

“We advise those who need to get food delivered in around 24 minutes to use the premium service,” it added.

Founded in 2010, Woowa Brothers started off as a small startup with only 30 million won of capital. It has now become one of the largest food delivery app operators alongside e-commerce giant Coupang.

By Byun Hye-jin (hyejin2@heraldcorp.com)