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Revenue club

Korea’s top delivery app operator Woowa joins 1 trillion won sales club

By Mar 31, 2021 (Gmt+09:00)

Korea’s top delivery app operator Woowa joins 1 trillion won sales club

Woowa Brothers Corp., the operator of South Korea’s top food delivery app Baedal Minjok, commonly known as Baemin, has joined the 1 trillion won revenue club, driven by a sharp increase in online orders amid the pandemic.

Woowa Brothers reported 2020 sales of 1.1 trillion won ($971 million) through a regulatory filing on Mar. 30. That’s up 94.4% from the previous year. Small store owners’ transactions via Baemin surpassed 15 trillion won last year.

But the company posted an operating loss of 11.2 billion won due to higher marketing and promotional costs, although the shortfall was narrowed by 69.2% from 2019.

Woowa joins the 1 trillion won sales club a decade after its founder and chief executive Kim Bong-jin launched the Baemin service in 2010 with 30 million won in capital.

The company attributed the sales growth to the growing use of its delivery services from traditional clients in their 20s to all age groups amid the spread of COVID-19 infections last year.

According to the Korea Fair Trade Commission, the domestic food delivery market reached 23 trillion won in 2020, up 53% from 15 trillion won two years earlier.

COMPETITION TO HEAT UP

Industry watchers expect competition among food delivery services to heat up this year, particularly among Baemin, Yogiyo and Coupang Eats, run by Coupang Corp.

Currently, Baemin is Korea’s largest food delivery service firm with a 63.2% market share, followed by Yogiyo at 29% and Coupang Eats at 6.3%.

Korea’s top delivery app operator Woowa joins 1 trillion won sales club

As part of its efforts to increase market share, Woowa said in mid-March that it will join hands with Hyundai Motor Co. to develop delivery robots capable of traveling through various building structures and equipped with a payment service.

Woowa Brothers, which aims to enter the Southeast Asian market this year, is in the middle of selling a controlling stake in Baemin to Germany’s Delivery Hero SE.

In December 2019, Woowa Brothers agreed to sell the food delivery app Baemin to Delivery Hero for $4.3 billion on the regulatory condition that the German company divests of a big chunk of its existing stake in Yogiyo, Korea’s second-largest food delivery app, to avoid a market monopoly.

Write to Bo-Ra Kim at destinybr@hankyung.com

In-Soo Nam edited this article.

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