SEOUL, April 12 (Korea Bizwire) — Food delivery app owner Woowa Brothers saw its sales nearly double in 2021 from a year earlier as the prolonged COVID-19 pandemic pushed up demand for food deliveries.
Woowa Brothers posted 2.008 trillion won (US$1.62 billion) in sales on a consolidated basis last year from 1.033 trillion won a year ago, the company said in a regulatory filing.
South Korea is the world’s fourth-biggest food delivery market, backed by its high smartphone penetration and dense population.
Woowa’s Baedal Minjok leads the country’s food delivery app market, followed by GS Retail Co.’s Yogiyo app and Coupang Eats, the food delivery arm of e-commerce leader Coupang.
In December 2019, German online food delivery service Delivery Hero acquired South Korea’s top food delivery app operator Woowa Brothers for $4 billion.
Delivery Hero owns an 89.55 percent stake in Woowa Brothers.
South Korea’s online food delivery market grew sharply to reach 25 trillion won last year amid the extended pandemic from 2 trillion won in 2017, according to Statistics Korea.
As of January, Baemin accounts for 69 percent of the market, with Yogiyo and Coupang Eats holding 20 percent and 11 percent, respectively, according to data from mobile platform analysis service Mobile Index.
But Woowa reported widened operating and net losses in 2021 compared to the previous year.
Its operating losses widened to 75.69 billion won from 11.23 billion won, while net losses also deepened to 141.46 billion won from 48.59 billion won.
“Woowa’s low commission rates amid tougher competition with rivals and increased spending to cover extra delivery service charges to its riders ate into the bottom line last year,” a Woowa spokesman said.
To reduce losses and improve profitability, the company has stopped offering promotional delivery prices and introduced new, reasonable commission rates, he said.