(C) KED Global

SEOUL— The South Korean food delivery market is undergoing a dramatic reshaping, driven by aggressive membership strategies and government-backed consumer incentives. Data reveals that Coupang Eats, leveraging its 'free delivery' offer tied to the massive Coupang Wow membership, has seen its user base nearly triple over the past two years, reaching an all-time high. Conversely, the market leader, Baedal Minjok (Baemin), and former second-place holder, Yogiyo, are experiencing user attrition as the competition heats up.

The Rise of Coupang Eats and the Power of 'Wow' 

According to an analysis of app and payment data by market research firm WiseApp/Retail, the total combined monthly users of the major delivery apps (Baemin, Coupang Eats, Yogiyo, Tanggyeo, Meokkkaebi) stood at 27.05 million in October, a 4% increase from 25.95 million in the same month last year. While the overall market is growing, the distribution of users is shifting fundamentally.

Coupang Eats has emerged as the most aggressive gainer. In October, its Monthly Active Users (MAU) hit a record 12.3 million. This represents a staggering increase of nearly 3 million users (32%) compared to the previous year (9.33 million) and a near-threefold leap from just two years ago in October 2023 (4.45 million).

This explosive growth is directly attributable to the free delivery service launched in March of last year, exclusively for members of the Coupang Wow membership program. With an estimated 15 million active Wow members, Coupang has successfully integrated its e-commerce ecosystem with its food delivery arm, making the free delivery perk a compelling reason to use Coupang Eats over competitors, effectively turning delivery fees into a powerful customer retention tool for the entire Coupang ecosystem.

Baemin’s Stagnation and Yogiyo’s Decline 

Despite remaining the largest player, Baemin is feeling the pressure. Its MAU stood at 21.7 million in October, a decrease of 370,000 users from the previous year (22.07 million). While the drop is marginal, it signals a halt in growth for the market leader in the face of Coupang’s aggressive strategy. Baemin has attempted to counter this by introducing its own differentiated service models, such as "Ala Carte Delivery" (알뜰배달), but the simple and comprehensive appeal of Coupang’s blanket free delivery appears to be a more significant draw for consumers already subscribed to Wow.

The situation is more severe for Yogiyo. Having been relegated to the third spot by Coupang Eats last year, Yogiyo’s MAU dropped to 4.44 million in October, a loss of 780,000 users from the previous year (5.22 million). Compared to two years ago (6.56 million), the app has shed over 2 million users, highlighting a substantial market share erosion. Yogiyo's inability to match the ecosystem integration of Coupang or the market dominance of Baemin has made it vulnerable in the high-stakes, fee-sensitive delivery landscape.

Government Initiatives Fuel Public Delivery Apps 

In a separate but notable development, smaller, public-sector delivery apps are also experiencing unprecedented growth, thanks to government-supported consumption vouchers and local economic support measures.

Tanggyeo (땡겨요), operated by Shinhan Bank, saw its MAU surge to 3.45 million. This represents a massive 235% spike from the 1.03 million users recorded in October last year. As a public-interest delivery app, Tanggyeo allows users to apply various consumption coupons issued by local governments, and the central government's policy of supporting these coupons has significantly boosted its user numbers. Tanggyeo's model, which offers lower commission rates for merchants and various benefits for customers, is proving to be a viable alternative to the dominant private platforms, particularly when combined with financial incentives.

Similarly, Meokkkaebi (먹깨비), another public delivery platform, doubled its user base, reaching 810,000 users compared to the previous year.

The Future of the Delivery Ecosystem 

The current state of the market suggests that competition is no longer solely about user interface or restaurant selection, but about ecosystem integration and pricing power. Coupang’s ability to bundle free delivery with its retail membership has fundamentally changed the competitive dynamic, forcing established players to re-evaluate their pricing and loyalty programs.

Analysts suggest that Baemin will need to intensify its counter-strategies, possibly by offering a more compelling, tiered membership program or by aggressively expanding its non-food delivery services to retain its vast user base. Yogiyo, having been passed by, faces the greatest challenge in finding a unique value proposition that justifies its use over the free-delivery giant and the established market leader.

Meanwhile, the rapid ascent of public apps like Tanggyeo, driven by government policies, indicates a growing segment of consumers who are highly responsive to financial incentives. This trend suggests that while private sector dominance continues, government and financial institutions can effectively leverage economic policy to introduce competition and provide alternatives that are more favorable to both small business owners and price-sensitive consumers. The delivery war is no longer a two-horse race, but a multi-faceted battle over convenience, price, and loyalty.