Last year Goldman Sachs' PIA invested USD35 mil. to a start-up called Baedal Minjok(BM) in South Korea. BM is a food delivery application which offers similar services as Seamless. However, it made a significant shift in its business model this summer.
BM announced that it will abolish commissions imposed on every order handled through its platform in order to focus on expanding the number of users.
BM currently charges shop owners a commission of around 5.5 percent to 9 percent of the price per order made through its direct-payment system. (This is very similar to what Seamless does) The existing commissions accounted for around 30 percent of its combined revenue the rest being advertisement fees from shop owners.
Customers complained that the quality of foods they get through BM's platform was significantly lower than they usually get because restaurant owners had to bear the fees charged from BM.
Instead, the company said it will tap into other businesses by capitalizing on the wide scope of those using the app, which boasts 5 million orders monthly from around 3 million smartphone users.
This might be the first of the series of strategic shifts of food delivery application providers I think.
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