Motorbikes for food delivery are parked outside an outlet of food delivery app Yogiyo in Seoul on June 2, 2020. (Yonhap)
SEOUL, Aug. 28 (Korea Bizwire) — A recent survey has showed that most of South Korea’s delivery app-affiliated restaurants are feeling a huge burden from the costs that they have to pay to delivery app operators.
The Seoul Metropolitan Government, the Incheon Metropolitan Government and the Gyeonggi Provincial Government jointly carried out a survey of 2,000 restaurants operating in urban areas which are affiliated with delivery apps.
At 79.2 percent, the vast majority of the respondents said that the advertising fees and commissions charged by the delivery app companies were set excessively high.
The delivery app-affiliated restaurants complained that other services that they have to offer in addition to advertising are placing a bigger burden on their operations.
Such non-advertising services include ‘the provision of extra food in return for customer reviews’ (28.5 percent), ‘the issuance of discount coupons’ (22.1 percent) and ‘contributing to delivery costs’ (15.3 percent).
As a way to cope with the cost burden, the largest share of the restaurants (41.7 percent) said they charge extra to customers in the form of delivery fees, followed by those that have raised prices (22 percent) and those that have generated savings by reducing the amount of food served and the number of menu items, or changing the ingredients (16.3 percent).
At 78.6 percent, more than three quarters of the delivery app-affiliated restaurants agreed that lowering advertising costs and commissions should be a priority to improve delivery market practices.
M. H. Lee (mhlee@koreabizwire.com)
