Woowa Brothers focusing on CSR as FTC reviews M&A
Baedal Minjok's scooters are parked outside of Woowa Brothers' facility in Seoul. / Courtesy of Woowa Brothers
By Kim Jae-heun
Woowa Brothers, operator of the country's No.1 food delivery firm Baedal Minjok (Baemin), has recently been focusing on corporate social responsibility activities in order to get on the government's good side.
The Korea Fair Trade Commission (KFTC) is currently reviewing whether or not to approve a $4 billion won acquisition deal between Woowa Brothers and Delivery Hero.
Because Woowa Brothers has been embroiled in number of scandals, which have had a negative effect on the merger review, it wants to improve its public reputation.
Its latest effort was revealed Thursday, when Baemin said it had signed a memorandum of understanding with the Road Traffic Authority to promote safe-driving by deliverymen when they ride scooters to make deliveries. There has been an increasing number of scooter accidents following soaring demand for food delivery, and Woowa Brothers has hopes of curbing these.
Last Wednesday, it sent daily necessities, food and beverages to victims of heavy rain that struck Korea for nearly two weeks. Woowa Brothers provided 16,000 meals worth 20 million won each along with 200 towels, tooth brushes and toothpaste.
A week later, Baemin announced it would refund advertising fees to restaurant owners that pay 80,000 won per month for priority exposure of their business name on the food delivery platform.
Restaurant owners can place more than one advertisement on Baemin's mobile application and Woowa Brothers said it will give back 100,000 won depending on each client's monthly expenditure.
“All three programs were carried out to help our interested parties. They are closely linked to our business. We need them and they need us. It's necessary if our relationship is to be of mutual benefit,” a Woowa Brothers' official said.
Though the official denied that those efforts were aimed at winning favor with the antitrust watchdog.
“We are not doing them because our acquisition deal with Delivery Hero is under review by the KFTC. It wouldn't be a big help anyway,” the official said.
A KFTC official said he could not provide any information about the ongoing review, and the antitrust watchdog will only make its decision based upon the law and its guidelines.
Woowa Brothers applied for the review of the acquisition by Delivery Hero with the KFTC, Dec. 31 last year.
The result was expected to come out April 28, considering the 120-day deadline. However, the KFTC said it needed more time as it did not look over all the relevant documents.
During the nearly nine-month review, Woowa Brothers has been hit for attempting to raise advertising fees, which brought on a severe backlash from restaurant owners.
Also, the fact that the company marketed itself via a nationalistic image that emphasized Baemin as a “proud Korean firm,” has led to it now being called a “traitor to the nation” since it is being sold to a German company.