Uber buys its way into Korea's delivery war, this time through Baemin

Uber’s planned takeover of Delivery Hero would return the U.S. delivery and ride-sharing company to Korea’s food delivery market together with Baedal Minjok, commonly known as Baemin, the market leader in a tightening race with Coupang Eats.

Last week, Uber announced that it had agreed to buy the German company in a cash offer of approximately 13 billion euros ($14.8 billion). The deal covers Delivery Hero's operations in 50 markets, Korea among them, and is subject to regulatory approval, with closing expected in the second half of 2027. Uber was already Delivery Hero's largest shareholder.

Uber has tried Korea before. It launched Uber Eats here in 2017 and pulled out two years later after weak results.

Coupang Eats, the delivery arm of the e-commerce company Coupang, had 11.36 million monthly active users at the end of last year, up from 5.53 million at the end of 2023, according to mobile data analytics firm IGAWorks on Monday. 

Baemin went from 22.45 million to 22.6 million over the same period, a gain of 150,000. Coupang Eats grew 5.7 percent from January through June this year, ahead of Baemin's 4.6 percent.

Baemin is Korea's largest food delivery app operated by Woowa Brothers. Delivery Hero bought an 82 percent stake in Woowa Brothers back in 2019. 

The gap between Coupang Eats and Baemin widened while Delivery Hero hesitated over reinvesting in Baemin. Coupang Eats used the opening to offer free delivery and hand out discount coupons, and the IT industry expects Uber to fight back with a fierce marketing push to defend Baemin's share.

"Growth in the domestic delivery market has slowed, and it has turned into a fight over share," a source in the delivery industry said. "In that situation, a 'game of chicken' fought with capital is unavoidable."

Both companies are already carrying high costs. Coupang Eats posted revenue of 2.9 trillion won ($1.9 billion) last year, but net profit of only 61.4 billion won. Baemin took in 5.28 trillion won and spent 3.15 trillion won on outsourced services, the line that covers rider fees.

Uber’s interest in Korea reflects its effort to establish a larger base in Asia, industry sources say.

Japan is the only market on the continent where it holds the leading share, and the Korea Agro-Fisheries and Food Trade Corporation puts the Japanese food delivery market at around 8 trillion won, about a fifth the size of Korea's roughly 40 trillion won.

Uber and DoorDash currently split the global market between them, and both have been buying their way to footholds outside the United States. DoorDash took over the Finnish company Wolt in 2022 and completed its purchase of Britain's Deliveroo last October. Uber took a 27.5 percent stake in Grab in 2018, when it handed its Southeast Asian ride-hailing and delivery operations to the Singapore-based company and withdrew from the region.

For Uber, Baemin brings assets no other Korean platform has. It has built more than 80 urban fulfillment sites, which it calls Pick Packing Centers. That has given it experience in quick commerce, the term for deliveries within a radius of about 2 kilometers (1.2 miles).

The combination opens a path to a super app pairing groceries and restaurant delivery with Uber's taxi service, with a single membership designed to lock users in. Success there could put pressure on Kakao Mobility, which leads the Korean taxi-hailing market.

Uber is also known for insisting on a single app worldwide. Careem, the ride-hailing service it runs in the Middle East, is the only global subsidiary that has kept its own brand. Baemin may run separately for now, but the apps could be merged later. In the Korean taxi market, Uber built the UT brand with TMAP Mobility in 2021, then switched it back to Uber Taxi in 2024.

"Uber has been a perennial second in the Korean market, and integration with a delivery app is inevitable if only to get its taxi business off the ground," said Lee Eun-hee, a professor of consumer studies at Inha University.

The industry is watching what Uber does to delivery commissions. Uber Eats charges up to 30 percent in the United States. Baemin's brokerage commission tops out at 7.8 percent. Competition with Coupang Eats should hold Korean rates down in the near term, but there is concern that Uber would import its American pricing once it has the market to itself.

"Uber will cover the cost of discount coupons early on," a source at a fried chicken franchise said. "But once a monopoly is in place, there is no telling when it will raise fees."

BY OH HYEON-WOO [[email protected]]