The Seoul Metropolitan Government has launched a bold initiative for its public delivery app, "Ttanggyeoyo" (땡겨요, meaning "It pulls you in" or "You want it"), with the slogan, "When you crave chicken, it's 'Ttanggyeoyo'." The strategy is to establish the perception that even if consumers purchase other menu items through existing dominant delivery apps like "Baedal Minjok" (배달의 민족, "Nation of Delivery") and "Coupang Eats," "Ttanggyeoyo" will always offer the cheapest chicken.
However, there are clear limitations. While attempting to lower prices through various discount coupons, the already inflated chicken prices remain unchanged, raising concerns about the sustainability of this approach.
On April 25th, the Seoul Metropolitan Government announced on the 27th that it had signed an agreement at Seoul City Hall with Shinhan Bank, the operator of the public app "Ttanggyeoyo," and 18 chicken franchise companies to introduce the "Seoul Delivery Plus Pricing System."
The Seoul Delivery Plus Pricing System is a method where the Seoul Metropolitan Government, Shinhan Bank, and franchise headquarters jointly subsidize the price of chicken to lower it for consumers. When a consumer orders chicken through Ttanggyeoyo, they can receive discounts of up to 30% through a 15% discount using Seoul Sarang Gift Certificates (local currency vouchers) or other delivery-specific gift certificates, a 5% Ttanggyeoyo discount coupon, and a 10% promotional discount from the franchise headquarters.
For example, ordering BBQ's Golden Olive Chicken (23,000 won) and a 1.25L Sprite (2,500 won) via Baedal Minjok's single-order delivery (fee of 3,400 won) costs 28,900 won. However, ordering the same through Ttanggyeoyo, even with a delivery fee (up to 4,000 won), would cost around 20,000 won after applying the various discounts.
Franchise headquarters in the chicken industry, belonging to the Korea Franchise Industry Association, are discussing a plan to implement a "public delivery app-exclusive pricing system" that differentiates the selling price on the public app from the selling prices on private apps by utilizing discount coupons. They are also aiming to have approximately 8,000 chicken franchise locations in Seoul join Ttanggyeoyo in time for the peak "chimaek" (chicken and beer) season in the summer.
Despite offering benefits such as a low 2% commission for listed businesses and shortening the settlement cycle for self-employed individuals, Ttanggyeoyo has struggled to attract consumers, resulting in low subscription rates among business owners. Consumers have also pointed out the app's inconvenient user interface as a problem.
As of the end of last year, Baedal Minjok held a market share of 58.7%, with the top three companies, including Coupang Eats (22.7%) and Yogiyo (15.1%), accounting for 96% of the total market share. Ttanggyeoyo's market share remains at around 3%.
An association representative stated, "We hope to create the perception that at least for chicken, 'Ttanggyeoyo' is the cheapest, and that this will serve as a stepping stone for expansion into other food service sectors." Chicken accounts for approximately 39% of all delivery app orders, indicating high consumer demand.
The main concern is the sustainability of the "Seoul Delivery Plus Pricing System." To receive the 15% discount on delivery-specific gift certificates, consumers must purchase Seoul Sarang Gift Certificates issued by each autonomous district. Even though consumers can purchase chicken at a discount of up to 30% through promotions by Ttanggyeoyo and various franchise companies, it is uncertain whether these discounts will be available year-round.
Lee Jung-hee, an economics professor at Chung-Ang University, pointed out, "The core of the business going forward will be who pays for and how the benefits to attract consumers are provided."
Professor Lee also stated, "If the differentiated pricing system being discussed in the chicken industry is applied, discount rates on private apps could decrease, leading to a drop in sales. In this case, the headquarters must continue to bear the costs without passing them on to the franchisees. Success will depend on finding sustainable support to provide benefits to public app consumers."
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