Delivery.ethnic Fee Hike: Impact on Restaurant Owners and Consumers

Delivery.ethnic Fee Hike: Impact on Restaurant Owners and Consumers

Starting next month, Delivery.ethnic (Bae Min) will raise its delivery brokerage fee by 3 percentage points to 9.8% (excluding VAT). This decision aligns Bae Min’s fees with those of its competitor, Coupang Eats, and aims to bolster profitability amid fierce market competition. However, it may increase the cost burden on both restaurant owners and consumers.

Currently, Bae Min’s delivery brokerage fee stands at 6.8%. With the upcoming increase, restaurant owners will pay 9.8% of the food price as brokerage fees, bringing the total to 10.8% with VAT. To alleviate some of this burden, Bae Min will lower delivery fees by 100 to 900 won per order, depending on the region.

This fee increase is expected to spark backlash from restaurant owners who already find the fees burdensome. Additionally, consumers might see higher food prices or delivery fees as restaurant owners pass on the increased costs.

The competitive landscape between Bae Min and Coupang Eats is intense. In April, Coupang Eats launched a free delivery service for Wow members, significantly boosting its market share in Seoul and other major metropolitan areas, bringing it close to Bae Min’s market share.

Elegant Brothers, Bae Min’s operator, is under significant pressure from its German parent company, DeliveryHero, to improve profitability. DeliveryHero, which acquired Bae Min, recently announced potential antitrust fines exceeding €400 million ($600 million) from the European Union, causing a 17% drop in its stock price. Additionally, DeliveryHero distributed over 400 billion won in dividends last year, the first time since acquiring Bae Min.

Last year, Elegant Brothers reported consolidated revenue of 3.415 trillion won ($2.971 trillion), a 15.9% increase from the previous year, and an operating profit of 698 billion won ($424.1 billion), up 65% year-on-year.

 Delivery.ethnic (Bae Min) announced it will raise its delivery brokerage fee by 3 percentage points to 9.8% (excluding VAT) starting next month. This change, aimed at improving profitability, aligns Bae Min’s fees with those of Coupang Eats but may increase the cost burden on restaurant owners and consumers. Key points include:

• Current and Future Fees: The fee hike from 6.8% to 9.8%, including VAT, will total 10.8%.
• Regional Fee Adjustments: Bae Min will lower delivery fees by 100 to 900 won per order, depending on the region.
• Market Competition: The increase aims to boost profitability amid fierce competition from Coupang Eats.
• Profitability Pressure: Elegant Brothers, Bae Min’s operator, is under pressure from its German parent company, DeliveryHero, to improve financial performance.

FAQs

1. What are the current and new brokerage fees for Bae Min? Currently, the fee is 6.8%. Starting next month, it will increase to 9.8%, or 10.8% with VAT.

2. How will the fee increase affect restaurant owners? Restaurant owners will face higher brokerage fees, potentially sparking backlash as they already complain about the high fee burden.

3. Will consumers be affected by the fee increase? Yes, higher brokerage fees might be passed on to consumers through increased food prices or higher delivery fees.

4. Why is Bae Min increasing its fees? The fee hike aims to improve profitability amid intense competition from Coupang Eats and pressure from Bae Min’s parent company, DeliveryHero.

5. How is Bae Min adjusting delivery fees regionally? Bae Min will lower delivery fees by 100 to 900 won per order, depending on the region.

1. #DeliveryEthnic
2. #FoodDelivery
3. #RestaurantFees
4. #MarketCompetition
5. #ConsumerImpact