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By APD writer Alice
The US food delivery company Uber Eats said on September 10 it has decided to pull out of South Korea after two years due to mounting losses amid intensifying competition with home-grown players.
Uber Eats, which will cease operations in South Korea on October 14, promised to provide "adequate services" to customers until then.
"After careful consideration, we've decided to discontinue our service in Korea as of October 14," Uber Eats Korea said. "We'll focus on minimizing the impact on our restaurant partners, staff and fleet of riders."
The decision to withdraw from South Korea comes at a time of intense competition in the food delivery sector, as home-grown companies push for greater scale and launch new services.
South Korea is the world's fourth-largest market for online food orders. Koreans spend far more on food delivery than customers in other countries.
According to data from the Fair Trade Commission, Koreans placed 150 million orders a month on average last year. Payment via major delivery apps was estimated at over 4 trillion won ($3.4 billion).
Leaving South Korea is an acknowledgement by Uber Eats that Baedal Minjok has emerged as the hard-to-beat leader in the notoriously difficult market.
Baedal Minjok, which has a market share hovering around 75 percent, launched a crowdsourced delivery service titled "Connect" in July.
Like Uber Eats, this service provides on-demand deliveries from restaurants and allows partners to become riders to deliver the food during peak periods.
In June, South Korea's largest e-commerce firm Coupang joined the food delivery race by launching Coupang Eats.
Uber offers high-end taxi-hailing and licensed taxi-hailing services in Korea. It discontinued a ride-hailing service using private cars in 2015 due to strong opposition from taxi drivers.
Uber Eats launched its business in South Korea in August 2017 and offered its services in Seoul and Incheon, and Seongnam, Gyeonggi Province. As of August, it had 2,400 restaurant partners.
(ASIA PACIFIC DAILY)
