In a parliamentary audit on October 21, Ham Yoon-sik, vice president of Woowa Brothers, defended his company’s controversial fee increases by pointing to similar moves by competitor Coupang Eats. (Yonhap)
SEOUL, Oct. 22 (Korea Bizwire) – In a parliamentary audit on October 21, Ham Yoon-sik, vice president of Woowa Brothers, defended his company’s controversial fee increases by pointing to similar moves by competitor Coupang Eats, highlighting growing tensions in South Korea’s competitive food delivery market.
During the National Assembly’s political affairs committee audit of the Fair Trade Commission, Ham faced tough questioning about Baemin’s decision to raise its commission rate from 6.8% to 9.8% in July, matching Coupang Eats’ rate.
“We had no choice but to follow their lead,” Ham said, responding to Democratic Party lawmaker Kim Nam-geun’s criticism that the country’s top two delivery platforms appeared to be colluding by charging identical maximum commission rates.
The hearing took an interesting turn when Kim noted the absence of Coupang CEO Kang Hanseung, who was initially scheduled to testify but was ultimately excluded from the final witness list. When asked if he felt unfairly singled out, Ham responded, “Not necessarily.”
Kim also scrutinized Baemin’s recently announced “preferred commission system,” unveiled during the 7th meeting of the Delivery Platform-Merchant Cooperation Council on October 14. The lawmaker suggested that the new system, which maintains the 9.8% commission rate for the top 60% of merchants by revenue, effectively preserves the status quo.
Recently, Woowa Brothers, the company behind Baemin, announced that it would raise its fees shortly after the government’s announcement to support delivery fees, a move that the chairman of the Korea Fair Trade Commission told the National Assembly on Monday was ‘quite disconcerting’. (Yonhap)
Ham attributed the high commission rates to the introduction of free delivery services, which began after Coupang Eats launched its own free delivery option in March. “I understand there are concerns about the 9.8% commission being too burdensome for merchants. We will review this,” he added.
When questioned about the company’s most-favored-nation requirements for partner restaurants, Ham acknowledged the practice but again pointed to Coupang Eats as the initiator. According to Ham, Coupang Eats first began requiring restaurants not to set higher menu prices or delivery fees compared to other platforms.
M. H. Lee (mhlee@koreabizwire.com)
