Baedal Minjok Is Now Free for Shop Owners

Baedal Minjok, top food delivery app in South Korea, has announced yesterday that it will get rid of commissions charged for every order. It will focus instead on attracting new users and more customers to generate long-term profits.

Known as Delivery Nation in English, the company normally gets around 5.5% to 9% as handling fee for each transaction. It might be a considerable cut on the shop owners' earnings but the service has been very successful, with 5 million orders in a month from approximately 3 million smartphone users.

Well, they're in for some good news though. "Such fees will be abolished starting in August", Woowahan Brothers, the group behind Baedal Minjok, has stated. They have realized that expanding their customer base is more important than raking in short-term earnings from commissions, which accounts for more or less 30% of the company's combined 29 billion won revenue (in 2014). Getting rid of transaction charges won't have a significant effect on their profits.

But while they're going to implement this change, they will still require shop owners to pay a monthly subscription fee of 30,000-50,000 won. They'll also attract more clients and customers through Baemin Fresh. The new service will offer door-to-door delivery of fresh goods, such as cooked dishes and fruits, from 10:00 p.m. to 7:00 a.m.

Baedal Minjok currently has around 150,000 shops registered as members; contributing an estimated 1.7 trillion won to the combined 12-14 trillion won annual earnings of South Korea's food delivery sector. It was first launched on June 2010 and then received funding from a U.S.-based investor.

Goldman Sachs, which has also invested in food delivery service GrubHub, offered Woowahan Brothers 40 billion won on November 2014 to help improve their technology and service. According to the investment firm's officials, food-ordering apps and programs are innovative and they're willing to provide assistance for their development.