The Korea Times close
National
  • Politics
  • Diplomacy
  • Defense
  • Labor & Environment
  • Law & Crime
  • Health & Welfare
  • Embassy
  • Seoul & Provinces
  • Education
  • Foreign Communities
  • Obituaries
  • Multicultural Youth Award
Biz & Tech
  • Auto
  • IT
  • Game
  • Manufacturing
  • Retail & Food
  • Energy
  • Construction
  • Airlines
Finance
  • Policies
  • Economy
  • Markets
  • Banks
  • Non-banks
  • Economic Essay Contest
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
Lifestyle
  • Arts
  • Books
  • Travel & Cuisine
  • Trend
  • Fashion
  • Around Town
  • Fortune Telling
Entertainment
  • K-pop
  • K-dramas & Shows
  • Movies
  • Music
  • Performances
  • Asia Model Festival
Sports
  • Football
  • Golf
  • Baseball
  • Other Sports
World
  • Asia Pacific
  • Americas
  • Europe & Africa
  • SCMP
Video
  • On the Spot
  • Feature
  • News
Photos
  • Photo News
  • Darkroom
Community
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Biz & Tech
  • Auto
  • IT
  • Game
  • Manufacturing
  • Retail & Food
  • Energy
  • Construction
  • Airlines
Tue, January 19, 2021 | 17:24
Retail & Food
Delivery Hero-Woowa Brothers deal going through hardship
Posted : 2020-06-26 23:09
Updated : 2020-06-26 23:09
Mail
Print Preview
Font Size Up
Font Size Down
Logos of food delivery applications Yogiyo and Baedaltong operated by Delivery Hero / Courtesy of Delivery Hero
Logos of food delivery applications Yogiyo and Baedaltong operated by Delivery Hero / Courtesy of Delivery Hero

By Kim Jae-heun

Delivery Hero's $4 billion deal to acquire Woowa Brothers is faltering despite earlier predictions it would proceed smoothly.

The Korea Fair Trade Commission (KFTC) recently imposed a 468 million won ($388,156) penalty on Yogiyo, the No.2 player in the food delivery service market operated by Delivery Hero, for illegal price fixing of client restaurants' dishes.

Although the antitrust watchdog denied that one case would have such an effect on the M&A deal, it showed how Yogiyo could abuse its power to hurt both restaurant owners and customers at the same time. This clashes with several elements that the KFTC is considering on whether to approve the deal.

The antitrust watchdog's main role here is to make sure that customers are not negatively affected from the German and Korean firms' business combination.

"We cannot say much about this deal as it is a sensitive issue. But what we can say is that the M&A deal should not bring down the quality of service, increase delivery fees or prevent other competitors from joining the market," a KFTC official said.

Currently, Woowa Brothers operates the No.1 food delivery application Baedal Minjok (Baemin), which takes up a 55.7 percent market share, according to the Korea Franchise Association. Yogiyo and No.3 player Baedaltong, which is also operated by Delivery Hero, have a 33.5 percent and 10.8 percent, respectively.

If the KFTC approves Woowa Brothers' acquisition by Delivery Hero, the combined entity will monopolize the market with a 100 percent share.

Civic group Consumers Korea expressed its deep concern that people will face steeper prices because there will be no competitors in the market offering a better service or lower prices.

The antitrust watchdog said consumers don't order food with mobile applications that often, and when it expands the notion of the market to include phone and online orders, mobile application orders only make up 15 percent of the share in the food delivery service market, worth 20 trillion won in 2018.

When looking at the M&A between Auction and Gmarket, the top two players in the e-commerce market in 2009, the KFTC approved the deal under the condition that they would not increase their commission fees for three years.

If the antitrust watchdog does not limit the market to only mobile application services when reviewing the deal, experts predict it could approve Delivery Hero's acquisition of Woowa Brothers without any conditions.

KFTC Chairwoman Joh Sung-wook also mentioned that the Woowa acquisition could promote innovation in the field and she will balance this factor with other aspects that can harm consumers in the case of a monopoly when making her final decision.


Emailjhkim@koreatimes.co.kr Article ListMore articles by this reporter









 
WooriBank
 
  • Man jumps to death inside shopping mall in Seoul
  • Foreign residents left out of digital-oriented banking service
  • Lee's jail sentence casts cloud on Samsung's business
  • Samsung heir Lee Jae-yong imprisoned again
  • Heavy snow advisory issued for Seoul
  • Moon calls on Biden to move forward from Singapore agreement with North Korea
  • Will Prestige BioPharma's upcoming IPO continue frenzy in bio market?
  • K-pop expands from entertainment to activism
  • Shake Shack introduces Korean-inspired chicken sandwich in US
  • LG Energy Solution IPO could test Citigroup's friendship with SK
  • Boy group Cravity features in Airbnb's 'Inside K-pop' program Boy group Cravity features in Airbnb's 'Inside K-pop' program
  • Music publishing sector booming with high-profile sales Music publishing sector booming with high-profile sales
  • 'The Uncanny Counter' writer leaves show despite soaring ratings 'The Uncanny Counter' writer leaves show despite soaring ratings
  • Selena Gomez: Big Tech 'cashing in from evil' Selena Gomez: Big Tech 'cashing in from evil'
  • Netflix to roll out more original series based on Korean webtoons in 2021 Netflix to roll out more original series based on Korean webtoons in 2021
DARKROOM
  • Biden-Harris inauguration is taking shape [PHOTOS]

    Biden-Harris inauguration is taking shape [PHOTOS]

  • Second Trump impeachment

    Second Trump impeachment

  • Pro-Trump rioters breach the US Capitol

    Pro-Trump rioters breach the US Capitol

  • Our children deserve better (Part 2)

    Our children deserve better (Part 2)

  • Migrants hard hit by COVID-19: UN migration agency

    Migrants hard hit by COVID-19: UN migration agency

WooriBank
  • About Korea Times
  • CEO Message
  • Times History
  • Content Sales
  • Media Kit
  • Contact Us
  • Location
  • Privacy Statement
  • Terms of Service
  • Mobile Service
  • RSS Service
  • Ombudsman
  • hankookilbo
  • Dongwha Group
  • Code of Ethics
Copyright