Effective March 26, Coupang WOW members will no longer have to pay delivery fees, the platform announced Monday, regardless of factors such as minimum order amounts, delivery distances, or order frequencies. Additionally, members will still be able to apply multiple discount coupons simultaneously.
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GLOCoupang Eats, the third-largest player in Korea’s food delivery market, is rolling out unlimited free food delivery for its 14 million paid members.
Effective March 26, Coupang WOW members will no longer have to pay delivery fees, the platform announced Monday, regardless of factors such as minimum order amounts, delivery distances, or order frequencies. Additionally, members will still be able to apply multiple discount coupons simultaneously.
The initiative seeks to grow the company’s market presence by encouraging more customers to choose its complimentary delivery subscription service over the traditional 10 percent discount on food prices introduced in April 2023.
Initially, the free delivery service will be offered in major urban areas like Seoul and Busan, as well as in regions such as Chungcheong, Gangwon, Gyeongsang, Jeolla, and Jeju Island. Coupang Eats plans to gradually expand this service to encompass more areas in the future.
However, the free delivery service is restricted to “Save Delivery,” where multiple orders are collected by a driver and delivered to neighboring houses simultaneously, and does not extend to “Direct Delivery” orders taken directly to individual households. Coupang Eats was the first food delivery platform in Korea to introduce individual house delivery for single orders.
This move comes at a time when food delivery app consumption is declining due to increasing delivery fees and food costs. According to Statistics Korea, the online transaction volume for food delivery services decreased by 0.6 percent compared to the previous year, totaling 26.4 trillion won ($19.8 billion) last year.
“Coupang aims to ease the burden on consumers and offer restaurant owners a chance to increase sales without additional cost pressure by eliminating delivery fees,” the company stated.
This decision is also viewed as a direct challenge to Baedal Minjok, commonly known as Baemin, which holds approximately 60 percent of the domestic market share with 21.3 million monthly active users (MAUs) as of February. Yogiyo has 6.4 million MAUs, and Coupang Eats closely follows with 5.9 million, according to the mobile market research firm Wiseapp, Retail, and Goods.
In addition to enhancing customer loyalty through free delivery, Coupang plans to use its WOW membership program to further retain consumers by offering additional benefits such as Rocket Delivery, Rocket Fresh, and the OTT service Coupang Play, available for a monthly fee of 4,990 won.
Despite potential benefits, restaurant owners and consumers express concerns about the possibility of increased food prices in the future.
“Coupang has clarified that the free delivery policy applies to delivery fees paid by consumers, not those borne by restaurant owners, with a commission fee of 9.8 percent per order,” noted an industry insider requesting anonymity. “If customers heavily opt for bundled deliveries, restaurant owners may feel increased pressure.”
Currently, there are no indications that competitors like Baemin or Yogiyo will adopt Coupang Eats’ free delivery model.
“We have provided a continuous 10 percent discount coupon to all members,” a Baemin official stated. “While we are not considering free delivery at the company level, we are attentive to industry trends.”
Source: Korea JoongAngDaily
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