Baemin to introduce packaging fees for new merchants

[Photo by Yonhap]

Baedal Minjok (Baemin), South Korea’s leading food delivery app, announced plans to charge a “packaging fee” from new merchants starting July 1st, 2024. While existing merchants will have this fee waived until March 2025, the packaging brokerage service is expected to become a paid service for all merchants moving forward.

According to industry sources on Sunday, Woowa Brothers, the company behind Baemin, unveiled this new policy on May 31st, 2024, via its “Baemin Food Service Plaza.” According to the notice, merchants who join Baemin’s packaging order service after July 1st will be required to pay a brokerage fee. However, those who have been using the packaging service or who sign up by June 30th will have their fees waived until March 31st, 2025.

The packaging brokerage fee is set at 6.8 percent, the same rate as the general delivery fee. If a customer places a 30,000 won food packaging order, for example, the restaurant will need to pay Baemin a fee of 2,040 won ($1.48).

Baemin had previously indicated its intention to monetize packaging fees in an April announcement from the Korea Fair Trade Commission, which had drawn criticism as a step back from its mutual growth strategies.

The implementation of this paid service starting in July 2024 aligns with the previously announced paid service policy. Rival service Yogiyo currently charges a brokerage fee for packaging orders, while Coupang Eats will maintain its no-fee policy until March 2025.

The introduction of packaging fees is expected to lead to an increase in food prices as merchants pass on the added costs to customers. Baemin’s move is seen as an effort to offset losses incurred from its free delivery policy that was implemented to compete with Coupang Eats. With Baemin’s market share at over 60 percent, the financial burden from offering free delivery has been more substantial compared to its competitors.

Baemin has been trialing a subscription service called “Baemin Club” since May 28th, 2024, to secure loyal customers. The subscription service is free during the trial period but is expected to transition to a paid model as well.