Kwak Yeon-soo is a digital editor at The Korea Times creating, editing and curating digital content for the newspaper’s website, mobile app and social media. She previously covered a diverse array of cultural, political and business topics.
Woowa Brothers reports Coupang to antitrust agency
By Kwak Yeon-soo
Woowa Brothers CEO Kim Bong-jin
By Kwak Yeon-soo
Woowa Brothers, which owns the “Baedal Minjok” food delivery service, has asked the Fair Trade Commission (FTC) to investigate e-commerce giant Coupang for alleged unfair trade practices, the company said Monday.
According to Korea's largest food delivery app operator, Coupang recently terminated a contract with Baedal Minjok to launch its own food delivery service, Coupang Eats.
While preparing for its launch, Coupang allegedly solicited restaurant owners by promising to cut commission fees if they signed an exclusive contract with Coupang Eats.
The e-commerce company also promised to pay them more than 10 million won ($8,380) for possible sales losses, according to Woowa Brothers.
These actions are a violation of the Monopoly Regulation and Fair Trade Act Article 23, which prohibits trading under terms and conditions which unfairly restrict business activities of a transacting party and disrupting business activities of another enterprise.
Launched in 2010, Baedal Minjok's monthly orders grew from about 5 million in early 2015 to more than 29 million by April 2019, the company said.
Woowa Brothers also expanded to offer a service for providing food and supplies to restaurants.
Coupang's founder and CEO Kim Bom
Currently, the leading food delivery app in Korea's 15 trillion won market is Woowa Brothers' Baedal Minjok, which accounts for about 65 percent market share, followed by RGP Korea's YoGiYo and Baedaltong, which have 26 percent and 9 percent, respectively.
Coupang, well known for its one-day rocket delivery services, said, “It's regrettable that a delivery powerhouse with over 60 percent stake in this market is trying to impede our business. We are only trying our best to safely enter into a new market. As the competition ramps up, consumer benefit increases accordingly.”
"We didn't steal the competitor's information or conduct any unlawful action," it also said.
Coupang Eats is reportedly aiming to take around 20 percent sales as commission, which is higher than the 7 percent charged by Woowa Brothers.