[Consumption value-May Project-Delivery app④] Delivery Apps are trying to lower delivery cost..Will this turn the consumer's choice?
[Consumption value-May Project-Delivery app④] Delivery Apps are trying to lower delivery cost..Will this turn the consumer's choice?
  • HueSoung, Jun Reporter / Yohan, Bok Reporter
  • 승인 2023.06.02 13:54
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In the time of high inflation, as more customers stop using delivery apps because of the expensive delivery cost, delivery business owners are strategically lowering the price. / Photo: Consumerwide DB, pictures are provided by each company (website capture or directly provided from)

[Consumerwide_ HueSoung, Jun Reporter / Yohan, Bok Reporter]  In a time of high inflation, more customers stop using delivery apps because of the expensive delivery cost. On the 15th, followed by Statistics Korea, the national statistics website, the transaction of the delivery food service was 2.156 trillion won in March, which is a 13% decrease from the same month last year. This is the maximum range of decrease in Statistics Korea history since the 2017 statistics restructure.

On the same day, referring to the Mobile-Index announcement regarding 'May presentative delivery app consumer state', there were 19,548,529 Baemin users (Monthly Active Users) during the month, which is a 650 thousand decrease from the same month last year. Yogiyo had 6,682,000 users (MAU) in May, which is a 1.3 million decrease from the same month last year. Coupangeats had over a 2million user decrease during the same period of time. (5,065,177 to 3,031,235)

Some see that users are decreasing rapidly in the Korean market because of the delivery cost. According to a Korea Agro-Fisheries & Food Trade Corporation (aT) research done between 2022 Sept and Oct for adult customers from the ages of 20 to 69 (1267) and restaurant workers in Korea (582), the top second reason considered for using delivery apps is known to be the cost (15.1%). In addition, from a consumer data platform business research, 83.9% of consumers answered high delivery cost as a main reason for using less food delivery service. (multi-choice answering) As the market goes down, delivery apps are beginning a strategic delivery cost diet. Strategy varies, including the limitless free subscription service, time-limited unconditional discount, and paid memberships. Now, consumers have more choices about using three major delivery app services.

First of all, Baemin, which held the top gainer in the delivery app market, jumped into the market by promoting an additional max 15% discount card for all customers. Baemin promoted with a slogan, "Neither membership required nor a pass", which seemed to target their competitors, Yogiyo and Coupangeats. The max. 15% discount benefit is offered only in the Capital and some Gyounggi areas. In particular, a 10% discount coupon is offered limitlessly on Baemin1. Everyday, between 3 and 5 pm, a 15% discount coupon which one can use on Baemin1 is offered only once.  Besides, coupons worth 1 thousand for the Baemin app, excluding the Baemin1, are offered for the same duration of time, till the end of the month. Depending on the market responses and the internal assessment, the coupon promotion can be extended or stopped before the date.

A Baemin related person said during the interview with Consumerwide, "We've been organizing various services for the users of Baedal, Hanjibbaedal, Altteulbaedal. The Baemin 1 10% discount coupon can be issued again after the first issued coupon has been used. Besides, we are also offering additional coupons (+ coupon) which you can use with the former coupons. We are looking forward to seeing more customers getting benefits."

Meanwhile, Coupangeat offers delivery discount benefits exclusively for Coupang Wow memberships. Wow members can use additional discount coupons with a 10% discount when they use food delivery service at Coupangeats. Additional discount coupons vary depending on the food restaurants. However, it seems to bring costs down by getting a double discount. If a customer orders a Jokbal dish which costs 42 thousand won in the restaurant that provides a coupon worth 5 thousand won, he can get a total of 9.2 thousand won discount by getting an additional discount from Wow membership, which is a 10% discount (4.2 thousand won).

Yogiyo is entering the market promoting a subscribed product worth 9.9 thousand won offering limitless delivery service on the condition of using co-operative restaurants with a Yogi-PassX badge and a minimum order cost of over 17 thousand won. The Yogi-PassX badge is visible to users based on the Yogiyo delivery algorithm, and all the Yogiyo cooperating restaurants are accountable for the service. A Yogiyo related person said, "After the Covid19, the delivery industry had a big change. We are hoping that customers will lessen the burden of the cost and enjoy more taste through our app promotion, 'Yogiyo PassX'"

Just comparing the discount conditions of the businesses, Baemin seems to offer the most discount benefit. Especially, for those who do not consider paying for extra expenses for membership or monthly pass. Nevertheless, if you are already a member of Wow, Coupang, then, Coupangeats can be a budget consumption. If delivery cost was the biggest concern for ordering delivery food, then Yogiyo can be considered a choice for you. I conclude that depending on the lifestyle and consumption patterns, the best consumption can vary.


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