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BAEMIN Turns Profitable Amid Pandemic, Future Growth Uncertain

Source: Woowa Brothers

South Korean food delivery platform BAEMIN, operated by Woowa Brothers, successfully turned around its business last year, achieving profitability after previous losses.

The company posted revenues of KRW 2.9471 trillion and an operating profit of KRW 424.1 billion, starkly contrasting the KRW 75.7 billion loss in the previous year.

Three major factors contributed to BAEMIN’s success:

BAEMIN restaurants have doubled from 136,000 in 2019 to more than 300,000 in 2022. In addition, the COVID-19 pandemic has created a surge in demand for delivery services.

BAEMIN’s business model, centered on its monthly subscription-based advertising product UltraCall, benefited from the increase in participating restaurants, leading to increased advertising revenue.

Efforts to restructure the business and end promotions improved profitability, particularly for BAEMIN1, a single delivery service that accounted for 15% of BAEMIN’s total food orders.

However, BAEMIN’s future growth remains to be determined.

The easing of social distancing measures has already impacted the company, with a 0.6% decline in monthly active users between April and August last year.

In addition, delivery apps’ gross merchandise value (GMV) began to decline in the second half of 2022.

This year, the growth effect of the pandemic is no longer expected to affect BAEMIN’s revenue.

In addition, market competition remains intense, adding further uncertainty to the company’s future performance.

Although BAEMIN achieved profitability last year, its future growth remains to be determined as the impact of the pandemic wanes, and the market competition continues.

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