Gyeonggi Provincial Government Office (Image courtesy of Gyeonggi Province)
UIJONGBU, Oct. 17 (Korea Bizwire) – In a bid to support small business owners grappling with high commissions and delivery fees, Gyeonggi Province is taking steps to stimulate the market for private delivery apps that charge commission rates of 2% or less.
The provincial government announced on October 16 that it would be accepting applications from delivery app operators until October 25 as part of a public-private partnership initiative.
The move comes as many small businesses face deteriorating profit margins due to the 9.8% commission rates charged by major delivery platforms, coupled with substantial delivery costs.
Under the new program, all delivery app operators offering commission rates of 2% or below are eligible to apply.
Successful applicants will be selected based on a proprietary evaluation system, with those meeting a specified threshold gaining approval. Selected operators will enter into a two-year agreement and gain access to the Gyeonggi local currency payment system.
The province cites the promotion of low-fee delivery apps as the primary motivation behind this initiative.
While there are already private delivery app companies in South Korea that advertise commission rates of 2% or less, Gyeonggi Province aims to expand this market segment through collaboration between these enterprises, the provincial government, and the Gyeonggi Corporation.
Officials argue that allowing these low-fee delivery apps to utilize the local currency payment system will not only boost their sales but also promote the use of local currency. As these apps gain traction, it is expected to naturally increase their usage, thereby reducing the commission burden on small business owners.
Additionally, selected delivery app operators will have the opportunity to participate in social contribution activities benefiting small business owners.
Seol Jong-jin, head of business development for Gyeonggi Province, emphasized that the partnership “requires no budget allocation.”
He expressed hope that the initiative could serve as a buffer in the ongoing dispute over commission rates between major delivery app platforms and their partner stores, with the broader aim of eventually reducing delivery app fees.
Private operators interested in participating in Gyeonggi Province’s public-private partnership delivery app initiative can submit their applications to the Business Policy Team of the Business Development Division (031-8030-2995) by October 25.
M. H. Lee (mhlee@koreabizwire.com)
