Food delivery firms offer hefty discounts as online orders drop
Baedal Minjok delivery drivers seen on a road in Seoul on Aug. 30, 2020. Korea Times file
By Kim Jae-heun
Food delivery platforms are offering more discounts to encourage consumers to order food online as more people choose to visit restaurants after the end of COVID-19 lockdowns, according to company officials, Monday. Soaring food prices and higher delivery fees have also dampened demand for food delivery.
Coupang Eats took the initiative to offer 5 percent to 10 percent discounts for Coupang Wow Membership users in 18 districts of Seoul on a trial basis. The company introduced the promotional event in southern Seoul's Songpa and Gwanak districts starting on April 10 to overcome the current difficulties facing the food delivery industry. It added 16 more districts to the areas eligible for the service in order to attract more customers.
The country's largest food delivery platform, Baedal Minjok (Baemin), also introduced a “bundle delivery” service offering cheaper delivery fees starting April 25 in Gwanak District. On May 3, the company expanded the service area to Incheon's Yeonsu District, Gunpo in Gyeonggi Province and five more districts in Daegu Metropolitan City.
The country's second-largest food delivery service, Yogiyo, operated by Delivery Hero Korea, also began offering 12 percent discounts on delivery fees anywhere in Seoul until the end of this month.
“You know all the food delivery firms are going through hardships now and we decided to give 2 percent more discounts than the other two rival firms. Considering that our margin is 12.5 percent, we barely make any profit from this,” a Yogiyo official said.
This comes as Koreans are spending less on food delivery.
According to the March 2023 Online Shopping Trend released by Statistics Korea this month, the amount of online shopping transactions for food services in March fell 13 percent year-on-year to 2.1 trillion won ($1.59 billion).
“Various factors contribute to the current slump in the online food delivery service here. May is the most difficult time of the year for us as many people go out for dinner or travel abroad to celebrate Family Month. But most importantly, people are starting to find delivery fees to be too expensive and they are avoiding placing orders through food delivery apps. The three companies are giving out promotional discounts to lure customers back,” a local food delivery firm official said.