Input 2020.12.29 16:47
The Fair Trade Commission has implemented’behavioral measures’ as a preventive measure, but measures to neutralize it still remain
DHK’s sub-brand’Delivery Box’ is no longer… Yogiyo, step on the delivery box train–
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The industry suggests that it is highly likely to use a strategy to move the 30% market share of Yogiyo secured by DHK (Nielsen KoreaClick as of September) to Baemin (59.7% market share), and that monitoring should be actively conducted.
DH’s Yogiyo sale scenario from the investment industry is as follows. With the Fair Trade Commission nailing the point of sale, companies or private equity funds that are willing to purchase make a decision to take over at an amount lower than the market evaluation. Yogiyo delays the sale schedule as much as possible, saying that he cannot get his price from the market. Meanwhile, Baemin conducts aggressive marketing, and Yogiyo’s management is neglected so that customers naturally settle in Baemin. Through this, Baemin’s market share can be raised to the 70% level, and Yogiyo can sell it in time for the deadline.
The FTC was also concerned about such tricks and issued a measure to DH called a “preservation order”. It was instructed to guarantee independent operation between each delivery app, and changed the commission rate or prohibited discrimination in promotional amounts.
However, there are many tricks to neutralize such measures, according to investment industry officials well-versed in M&A. A typical example is the method of significantly raising the price of a service while launching a new service. In fact, Yogiyo’s newly introduced’Yogiyo Express’ is famous for its higher delivery cost compared to other delivery apps. Yogiyo Express is a service that shortens delivery time by applying an AI solution.
After a pilot operation in Seocho, Seoul in July, the service area was expanded nationwide this month. One user said, “When ordering at a spaghetti store in Banpo, Coupang Itsu costs 1900 won for delivery and 1100 won for Baemin, while Yogiyo Express costs 4900 won for the same distance.” It costs a lot,” he said.
In the Internet community, there is a saying that “when a new service is introduced, most of them do aggressive marketing at low prices, but Yogiyo Express is the opposite.” An official from the investment industry pointed out that “new products or services can be sufficiently directed as a carnivalization (self-market encroachment) phenomenon that reduces sales of the same products and services.
Delivery Tong, another DHK delivery app, is also on the decline in the market according to DHK’s management strategy focusing on Yogiyo. According to the share of delivery app companies of mobile app analysis company App Any, the share of delivery boxes in January 2019 was 7.9%, but fell to 3% in December 2019. Delivery box share in September was 1.6%. That’s 6.3 percentage points in 20 months.
The biggest reasons for the crash of the delivery box are the decline in service quality and the reduction in publicity and marketing. In this year’s National Assembly audit, it was pointed out that such a reduction in market share is a trick to create an advantageous environment in the corporate combination screening. Dong-ju Lee, a Democratic Party member of the Democratic Party, said, “Baemin and DH deliberately killed the delivery box in order to show the possibility of a new business entering the market,” he said. “Government authorities should investigate closely.”
Earlier, at the end of last year, DH changed its corporate form from a limited company to a limited liability company from a Korean branch, DHK. Limited companies are obligated to disclose their performance, but limited liability companies do not. In response, there were many interpretations in the industry that the corporate form was changed to avoid monopoly claims after taking over Baemin. An industry insider said, “It is true that there are many doubts about DH’s actions, such as the change in the form of DHK and the sudden crash of delivery boxes.” “There is also a reason for securing a dominant position in the market. DH will not be able to give up the profit.”
There is also an objection. It is said that the’strategy to boost people’s people’ emerging from the investment industry is somewhat overkill. This is because it will be difficult for DH to ignore the behavioral measures of the Fair Trade Commission under the circumstances that the media and the government are watching. In addition, it is analyzed that the decline in the value of Yogiyo will eventually lead to a depreciation of the sale price, which will not benefit DH.
“According to the behavioral measures taken by the FTC, DH cannot discriminate against Yogi-yo and Bae-min’s promotion or marketing,” said Bong-eui Lee, a professor at Seoul National University Law School, who majored in economic law. “It is realistically difficult to reduce the corporate value of the company to a meaningful level in the competitive landscape.”
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