Korea’s Leading Food-Delivery App Aims Global Market
Food-delivery apps are taking the market by storm with ever-increasing consumer demand for a more convenient way to enjoy food at home. Asia is emerging as a hot market for this new growing sector of business given the recent rise of middle class population across the continent. Amidst fierce competition, the German food-delivery giant Delivery Hero SE has agreed to buy South Korean rival Woowa Brothers Corp., and its application Baemin for $4 billion, making the company the forerunner in Asian markets and the owner of Woowa, Bong-jin Kim, the biggest shareholder.
The deal is a continuum of the current trend of consolidation around the food-delivery sector. Companies and applications have been met with difficulties in standing out against their competitors due to limited room for innovation in their products and have turned their eyes to joining forces with rivals to grow in size as a way to appeal to customers. Woowa Brothers and its founder Bong-jin Kim read this trend and saw it as a chance to expand its impact over to a broader Asian market that could open new windows for them to reach the global market as well. Under one of the biggest inbound investments into South Korea’s technology sector, Woowa’s founder Kim will be in charge of managing Asian business including South Korea, Vietnam and Hong Kong, which are the biggest parts of Asian markets that accounted for about 38% of its total orders and 32% of its total revenue. In addition, Woowa can go up against one of its biggest competitors Coupang, funded by Softbank Group Corp., and seeks to continue its leading form in Korea as well. Delivery Hero also expects to consolidate its position in the Korean market and continue their expansion outside of Europe. Woowa said that “The establishment of the joint venture arises against the backdrop of the changing market environment.”, and that the joint venture will be mutually beneficial to both parties. Coming off of 36 million orders in South Korea in the past month, Woowa is taking aim at the next level.
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