Summary
- Market Slowdown: South Korean delivery platforms are experiencing a growth slowdown, with Delivery Hero's(DHER:DE) market share declining.
- Competitive Landscape: Coupang Eats(CPNG:US) shows impressive growth, capturing market share with strategic discounts for Wow members.
- Card Transaction Data: Insights from card transactions reveal the shifting dynamics between major players like Baemin(Delivery Hero) and Coupang Eats.
- User Retention: Despite intense competition, user retention rates remain a critical factor for sustained growth.
Korean delivery is on a new phase
The South Korean delivery industry is facing a new phase marked by changing consumer behaviors and intense competition. This article examines the latest trends and insights from card transaction data and user retention metrics, highlighting the performance and strategies of key players like Baemin(Delivery Hero), and Coupang Eats.
Market Slowdown and Competitive Landscape
Recent Market Trends
The growth of South Korean delivery platforms has slowed recently. Delivery Hero (DHER.DE), that owns Baemin, in particular, is experiencing a noticeable decline in market share according to Aicel Technologies' consumer transaction data. The company's stock price has been underperforming since it failed to meet market expectations for annual gross merchandise value (GMV) in 2022. This year-over-year decline can be partly attributed to the overall market contraction as daily life returns to normal.
Coupang Eats' Strategic Growth
In contrast, Coupang Eats has demonstrated impressive growth, capturing market share from its competitors. Since April, Coupang Eats has offered Wow members a 10% discount, successfully reversing a decline in transaction volume and the number of users. Though Coupang Eats' payment volume is currently only around 25% of Baemin's, it has shown a remarkable increase since the promotion.
Insights from Card Transaction Data
Payment Volume and Market Share
Card transaction data from Aicel Technologies reveals significant shifts in the payment volumes of major delivery platforms. While Baemin has recently turned a profit, the intensifying competition from Coupang Eats may lead to a lower profit margin. It is crucial to observe which players can secure a larger portion of the market amidst the declining overall demand.
User Retention Trends
Despite the competitive pressure, user retention rates remain a critical factor for sustained growth in the delivery industry. Coupang Eats' ability to retain users through strategic discounts and promotions underscores the importance of customer loyalty in a saturated market.
Future Outlook for the Korean Delivery Industry
Market Share Dynamics
The ongoing competition between major delivery platforms like Baemin(Delivary Hero), and Coupang Eats will shape the future landscape of the Korean delivery industry. Monitoring card transaction data and user retention trends will be essential for understanding market dynamics and identifying growth opportunities.
Strategic Implications
For professionals in hedge funds and asset management, tracking the performance and strategies of key players in the delivery industry is crucial. The consolidation of market share and the effectiveness of user retention strategies will determine the long-term viability and profitability of these platforms.
