Delivery
Overview
Delivery refers to the act and industry of directly transporting food, goods, services, etc., from producers or sellers to consumers. In particular, since the 2010s, with the spread of smartphones and the development of online platforms, the delivery market has exploded. With the COVID-19 pandemic making non-face-to-face consumption a daily routine, delivery has become an essential service beyond simple food ordering, permeating all aspects of life. Currently, the delivery industry is expanding its scope to include food delivery, grocery delivery, pharmaceutical delivery, pet supplies delivery, etc., deeply influencing the economy and social structure.
Main Content
History and Development of the Delivery Industry
The origins of delivery can be traced back to food delivery in ancient Rome or dim sum delivery in 19th-century China, but the modern delivery industry began with pizza delivery in the mid-20th century United States. In South Korea, chicken and pizza delivery via phone orders became common in the 1990s, and internet ordering was introduced in the 2000s. With the emergence of mobile app-based platforms such as Baedal Minjok (Baemin), Yogiyo, and Coupang Eats in the late 2010s, the delivery market underwent a rapid restructuring.
Business Models of Delivery Platforms
Major delivery platforms have three revenue models. First, they charge restaurants a commission rate (typically 12–20%) per order. Second, they impose delivery fees and separate service fees on consumers. Third, they earn advertising and promotion fees. Recently, a mix of 'in-house delivery' models employing dedicated delivery personnel and 'open ride' models utilizing existing riders has emerged. Representative examples include Baedal Minjok's 'Baemin One' and Coupang Eats' 'Rocket Delivery.'
Delivery Labor and Social Issues
The growth of the delivery industry has brought about issues related to rider (delivery driver) labor. As platform workers, riders are often classified as special employment workers, frequently lacking adequate protection such as minimum wage, industrial accident insurance, and the four major social insurances. The 'Baedal Minjok Rider Death Incident' in 2021 sparked active social discussions on rider safety and rights. Additionally, rising delivery fees, conflicts between consumers and restaurants, and delivery waste have emerged as major issues.
Evolution of Delivery Technology
The delivery industry is closely linked to technological innovation. Technologies such as drone delivery, autonomous robot delivery, AI-based optimal route algorithms, and real-time location tracking systems are being introduced. In 2023, a drone delivery demonstration project was conducted in Sejong City, South Korea, and in 2024, autonomous robot delivery was piloted in some areas of Seoul. These technologies are expected to contribute to reducing delivery times and costs.
Economic Impact of the Delivery Industry
As of 2023, the delivery industry formed a market of approximately 30 trillion KRW in South Korea, growing at an average annual rate of over 15%. While delivery platforms provide new sales channels for small business owners, they are also criticized for worsening restaurant profitability due to high commissions. Additionally, increased delivery demand leads to greater use of packaging materials, causing environmental problems. Some local governments are implementing policies mandating the use of reusable containers to reduce delivery waste.
Latest Trends
From 2024 to 2025, the delivery industry is undergoing the following changes. First, the debate over 'delivery app fee reduction' continues, with active discussions on government-level regulations. The Fair Trade Commission launched an investigation into unfair practices by delivery platforms in 2024. Second, competition between Coupang Eats and Baedal Minjok has intensified, leading to expanded promotions such as free delivery and discount coupons. Third, 'local delivery' services are gaining attention, with increasing partnerships with neighborhood grocery stores, pharmacies, laundromats, etc. Fourth, AI-based order prediction systems are being introduced to optimize restaurant inventory management and delivery times. Fifth, due to strengthened environmental regulations, the use of eco-friendly packaging materials is becoming mandatory, and some platforms have introduced 'zero-waste delivery' options. Sixth, discussions on enacting a 'Platform Worker Act' to protect the rights of delivery workers are ongoing in the National Assembly.
Related Topics
- [[Food Delivery]]
- [[Platform Economy]]
- [[Baedal Minjok]]
- [[Rider Labor]]
- [[Drone Delivery]]
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