Delivery application Baemin will not be charging stores for brokerage fees on small orders of 10,000 won ($7.20) or less, the operator of the largest online delivery service in Korea said Thursday.
Woowa Brothers Corp., the app's operator, said it has reached a provisional agreement with local trade associations representing franchise store owners, including the Korea Franchisee Union. This is part of the company's three-year plan to subsidize 300 billion won for the store owners using its service.
Orders placed via the Baemin app is accompanied by a delivery fee and a brokerage fee, with the latter amounting to 2-7.8 percent of the order amount. In case of "free delivery options" for Baemin members, franchise stores also shoulder a portion of the delivery fees.
Small orders, which despite handling efforts yield minimal profits, have posed a dilemma for store owners, especially as a growing share of the population lives alone and tends to order in small quantities. A 2024 data by the Statistics Korea showed that 35.5 percent of all households in the country comprise of single person.
The new measure is to reduce the financial burdens for stores in such cases. In addition to the commission exemption, Woowa Brothers will provide partial subsidies for the delivery fees for small orders, if the plan is finalized.
Orders exceeding 10,000 won and 15,000 won will be subject to commission subsidies, in rates yet unconfirmed in the recent agreement.
"With increase in one-person households, we believe the support for small orders will grant convenience and benefits for the consumers, and increase in sales while reducing costs for business owners," said Kim Bum-seok, chief executive officer of Woowa Brothers.
minsikyoon@heraldcorp.com
