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๐Ÿ‡ฐ๐Ÿ‡ท South Korea /Economy & Trade

Baemin's Coupon Policy Change Sparks Merchant Backlash Over Increased Fees

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Delivery app Baemin has changed its coupon system, prioritizing discounts on delivery fees over food prices.
  • This shift increases the commission fees merchants pay, as commissions are calculated on the food price, which is now effectively higher after delivery fees are discounted first.
  • Merchants face higher monthly commission costs and a temporary refund system, with concerns about the long-term sustainability and fairness of the policy.

Delivery platform Baemin is facing backlash from merchants over a change in its discount coupon system that critics say unfairly shifts costs onto business owners. Previously, coupons directly reduced the food price. Now, the platform applies discounts primarily to delivery fees first, before calculating commissions based on the food price.

This change means that while the final price for consumers may remain similar, merchants are effectively paying higher commission fees. For example, if a 3,000 won coupon is applied to a 20,000 won order, under the old system, the merchant paid commission on 17,000 won. Under the new system, the delivery fee is discounted first, and the commission is calculated on a higher food price of 19,000 won, resulting in an increased commission payment for the merchant.

The new policy will increase the commission fees I pay to Baemin by over 1 million won per month.

โ€” Franchise ownerDescribing the financial impact of Baemin's new coupon policy.

Baemin defends the policy change, stating it aims to increase customer order conversion rates by making delivery fees more attractive. The company also announced a plan to refund 12% of the delivery fee discount amount to merchants, arguing this offsets the increased commission. However, merchants are skeptical, pointing out that the refund is temporary, only lasting three months, and its extension is uncertain. Furthermore, they must first pay the increased commission before receiving the refund the following month.

Merchants are expressing strong dissatisfaction, with one franchise owner estimating an increase of over 1 million won in monthly commission payments. New merchants joining Baemin after a specific date are forced to adopt the new policy without choice. Industry observers suggest Baemin's move is a response to competitor Coupang Eats' free delivery promotions, creating a system that offers consumers the illusion of lower delivery costs while burdening merchants with increased expenses.

Baemin's integrated discount policy creates a visual effect of lower delivery fees for consumers, while shifting the cost and commission burden onto merchants.

โ€” Industry insiderAnalyzing the strategic implications of Baemin's policy change.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.