Woowa Brothers, 'We Had No Choice but to Follow Competitors' on Fee Increases

 

 

 

 

The excessive fee increases and demands for the most-favored-nation treatment by Woowa Brothers, the operator of the delivery app Baedal Minjok (Baemin), are causing controversy.

On the 21st, Ham Yoon-sik, Vice President of Woowa Brothers, explained at the National Assembly's Fair Trade Commission audit that the company had no choice but to follow the fee increases and policies due to proactive measures taken by competitors.

He claimed that Baemin had to follow suit because the competitor Coupang Eats applied a higher fee rate first.

In response to a question from Democratic Party lawmaker Kim Nam-keun regarding the identical fee rate of 9.8% maintained by Baemin and Coupang Eats, raising suspicions of collusion, Ham acknowledged that they could not avoid following the competitor's actions.

Woowa Brothers has explained that after raising the delivery fee rate by 3 percentage points to 9.8% in August, it was similar to the fee rates of Coupang Eats and Yogiyo, amid criticism.

However, the Fair Trade Commission is currently investigating whether Baemin increased its fees without a legitimate reason, following a report from the Korea Franchise Association.

The controversy surrounding the demands for the most-favored-nation treatment is also ongoing.

This policy forces partner companies to set prices that are the same or lower than those on other delivery apps, and Ham explained that Baemin followed the competitor's policy.

However, Han Ki-jeong, Chairman of the Fair Trade Commission, stated, "We will quickly determine whether the demand for the most-favored-nation treatment constitutes a legal violation," and indicated plans for a thorough investigation.

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Woowa Brothers, 'We Had No Choice but to Follow Competitors' on Fee Increases