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| Scooters for delivering orders placed on Yogiyo, the No. 1 food delivery service, are parked in front of its office in Seoul last June. / Yonhap |
By Kim Jae-heun
Yogiyo, operated by Delivery Hero, and eBay Korea have drawn attention since they were put up for sale early this year. They have the second largest shares of their markets and acquiring these two brands could instantly elevate buyers to the top rank or at least in a position to pose a threat to the No. 1 player in the market.
However, there seem to be no potential buyers jumping at the chance to acquire either. Their ambiguous positions in the market is the biggest reason.
No one can be certain how much longer Yogiyo will manage to retain its No. 2 position as No. 3 player Coupang Eats is in hot pursuit. Yogiyo accounts for a 19-percent market share and Coupang Eats 5 percent. There is still a gap, but not in the posh Gangnam district of southern Seoul where demand for Coupang Eats' service has reportedly surpassed that of market leader Baedal Minjok (Baemin) operated by Woowa Brothers.
Many feel it is only a matter of time before Coupang Eats takes over the No. 1 spot, backed by massive investments from its parent company Coupang. At present, coupang Eats only delivers in Seoul. But its market share is likely to soar when it starts delivering food in other parts of the country.
Yogiyo has also failed to offer differentiated services in the market and is currently losing many of its users to Coupang Eats. This has halved Yogiyo's enterprise value from 2 trillion won to 1 trillion won.
"Coupang is preparing for an initial public offering in the United States and if the listing is successful, it is very likely that it will engage in a money game in the food delivery market like it is doing in the e-commerce scene," an industry source said.
At the same time, Yogiyo's market share gap with Baemin is too big. Baemin has a 78 percent share of the market and is just too far ahead for Yogiyo to catch up. As a former owner of Yogiyo, Berlin-based Delivery Hero knows all the business secrets of the food delivery company and the German firm will share it with Woowa Brothers to make sure Yogiyo does not catch up with Baemin.
The situation for eBay Korea is quite the same. Although it is the only e-commerce firm that is running a profit at the moment, its two rivals ― Coupang and Naver ― dominate the market.
Coupang owns the largest number and size of distribution centers in the country and not only runs an open market business as a third party, but also sells its own products as a dealer. Coupang's overnight delivery service is the biggest advantage that guarantees its position as the top online retailer.
Naver is also running an open market business and signed a memorandum of understanding with CJ Logistics last year to beef up its e-commerce sector. Naver's advantage lies in its information technology skills that can be used in the live commerce business, which is a future growth driver.
eBay Korea's market share of 14 percent is nothing to laugh at. But potential buyers question how long its users will remain loyal. Customers appear to favor the ability to compare the prices of products on Naver before purchases, instead of shopping on G-Market or Auction, operated by eBay Korea, which do not offer many options to choose better prices.
