Food delivery apps were once the darling of the South Korean food industry, providing convenience and accessibility to millions of customers across the country. But as prices continue to skyrocket, consumers are turning their backs on the once-popular service in droves. In March alone, an estimated 200,000 users abandoned food delivery apps, sparking concern in the industry.
According to data from mobile index platform AIWorks, the number of monthly active users for delivery apps like Baemin, Yogiyo, and Coupang Eats fell to 28.97 million in March, a drop of more than 200,000 from the previous month. This is the 11th consecutive month of decline, and a stark contrast from the 30.21 million users in January.
Industry experts say that rising prices are the main cause of the exodus. Delivery fees have soared from around 2,000 won to as much as 10,000 won for some orders, leaving many customers frustrated and angry. A survey conducted by the Korea Consumer Agency in February found that 50.1% of consumers and 75.9% of small business owners believe delivery fees are too high.
In response to the exodus, food delivery app companies are scrambling to find ways to reduce prices and retain customers. Baemin, for example, has introduced a new service called “Smart Delivery,” which optimizes delivery routes to reduce costs for both customers and businesses. The company has also eliminated packaging order fees to encourage more customers to use its service.
Coupang Eats has taken a similar approach by waiving packaging order fees and offering other benefits, such as free delivery for certain restaurants. The industry as a whole is also exploring ways to reduce the cost of delivery fees, including partnerships with logistics companies and other cost-sharing measures.
Despite these efforts, some analysts predict that the exodus will continue unless prices come down significantly. As one food industry analyst noted, “Consumers are becoming more price-sensitive, and they are not willing to pay exorbitant fees for the convenience of food delivery. Unless the industry finds a way to reduce prices, we may see more customers abandoning these apps in the coming months.”