Leaked phone recordings reveal managers from Baedal Minjok and Coupang Eats pressuring partner merchants to align prices and minimum order amounts [1].
These practices suggest a coordinated effort to control pricing across the South Korean delivery market, potentially limiting a merchant's ability to offer competitive discounts on specific platforms. If platforms dictate pricing parity, it may stifle competition and increase costs for consumers.
In one recording, a manager from Baedal Minjok, known as Baemin, said to a merchant that having different prices on different platforms lacked consistency [2]. The manager said the merchant should unify the pricing across the services [2].
Similarly, a Coupang Eats manager said to a merchant that a standard exists requiring the maintenance of the same conditions as other platforms [2]. The manager said that certain benefits, such as the Wow discount, could be removed if the merchant did not comply with these standards [2].
Kim Jun-hyung, chairperson of the Association of Presidents for Fair Platforms, said managers call to ask if merchants can raise prices on rival apps [2]. Kim said that being removed from membership benefits means consumers cannot access free delivery from that store. This results in the store not being exposed to users, which he said is effectively telling the merchant not to do business in the delivery market [2].
Platform managers reportedly use these tactics to ensure profitability and maintain a level playing field across apps by forcing price policies [1]. They allegedly threaten to lower a store's score or limit its visibility if the merchant refuses to match prices with other platforms [1].
““If you are operating at this price on this platform and at this price on Baemin, there is no consistency,” said a Baedal Minjok manager.”
The allegations point to a potential abuse of market dominance by South Korea's leading delivery platforms. By leveraging their control over search algorithms and visibility scores, these companies can effectively dictate the pricing strategies of small business owners. This creates a system where merchants cannot use flexible pricing to attract customers to a specific app, potentially leading to higher overall prices for consumers and reduced autonomy for vendors.
