Gov't supports public delivery apps

[Anchor]

Crispy textured and sweetly seasoned chicken is a beloved dining option for Koreans.

The Seoul city government has stepped in to reduce the burden of chicken prices, which account for 40% of delivery orders.

They are utilizing a public delivery app. Now, how effective will it be?
Reporter Lee Soo-yeon has the story.

[Report]

[“Ddaenggyeoyo order~ ddaenggyeoyo order~.”]

The public delivery app is 'Ddaenggyeoyo', meaning to crave.

About 1 in 8 delivery orders from this restaurant comes through 'Ddaenggyeoyo'.

By ordering through Ddaenggyeoyo, customers receive a 10% discount and free delivery, thanks to direct advertisement.

The choice was made out of necessity due to the high fees and advertising costs associated with existing delivery apps.

[Yoon Tae-kyung/Restaurant Operator: “The advertising costs alone are almost 7 to 8 million won a month with Baemin (Baedal Minjok). They take over 30% as a commission from the sales amount.”]

Despite a low commission rate of less than 2%, the market share of public delivery apps is only in the 3% range.

This is the combined result of all 12 currently operating apps.

To increase usage, the benefits of the public delivery app discounts are expanding.

Recently, the Seoul city government introduced a pricing system exclusive to the public delivery app.

If you order chicken through the Ddaenggyeoyo app, you can receive a 5,000 won discount coupon for first orders, a 4,000 won discount from the chicken company, and if you use a gift certificate that offers a 15% discount, you could save over 10,000 won.

The plan is to attract users to the public delivery app starting with the chicken sector, which accounts for 40% of delivery orders.

The issue is sustainability.

Public delivery apps primarily offer discounts through local currency or gift certificates, which requires funding from local government budgets.

Local governments have spent millions to billions of won, but in the past four years, 14 public apps have ceased operations.

[Local Government Small Business Official/Voice Altered: “They only use it during promotional events and then immediately go back to Baemin or Coupang Eats. As a result, there’s no profitability, and consumers are inconvenienced. Most have shut down.”]

The government has allocated 65 billion won in the supplementary budget under the guise of revitalizing public delivery apps.

It remains to be seen whether this time it will be effective.

This is KBS News, Lee Soo-yeon.