No. 156 / Mar 7, 2022
Delivery costs in the delivery market are increasing. High delivery fee is a burden to consumers, so residents living in apartments have begun to order packaging or make group purchases to lessen the cost. However, the government has developed a method to solve this problem: The Delivery Fee Disclosure System. The Ministry of Economy and Finance said that beginning in February 2022, the Korea National Council of Consumer Organizations (KNCCO) will investigate the status of delivery fees once a month and disclose them on the websites of KNCCO and the Korea Consumer Agency (KCA).
Then, people need to know the cause of the increase in delivery fee, which is the background of this system’s implementation. First, the supply is insufficient compared to the demand for delivery men. Recently, the demand for delivery has increased in fact, it has more than tripled compared to pre-COVID-19 times. However, the number of delivery men who can afford it is currently insufficient, so their labor costs have risen, and delivery costs have naturally risen, too. Second, competition for short-term delivery has intensified. Following Coupang Eats, which originally do the delivery to only one house, Baemin also provided a short-term delivery system through Baemin One. The two companies have begun to offer various benefits to delivery men to increase their market share, and delivery men have left to short-term delivery companies that can give high salary. For this reason, delivery platforms which do not run the short-term delivery system have no choice but to raise delivery fees to attract delivery men.
Therefore, The Delivery Fee Disclosure System is raising people’s expectations and they hope that it will improve this situation. If this system is implemented, people can check information in one place, so they can consume more conveniently. In addition, a transparent delivery fee will allow for wise consumption. Further, consumers prefer to use platforms with cheaper delivery costs, so this system can induce competition that allows sellers to lower delivery fees.
On the other hand, the system has also been criticized. Delivery fees are high due to the shortage of delivery men, but if the delivery fee is further lowered through The Delivery Fee Disclosure System, it will be difficult to solve the fundamental problem practically. Also, if price competition intensifies due to this system, there is a problem that delivery rejection may become more frequent because delivery men will not prefer low-cost delivery. If this happens, the delivery system created for people’s convenience may not work properly and will cause an issue.
Currently, The Delivery Fee Disclosure System is in the stage of implementation stage. The KNCCO said that they are reviewing various investigation methods on a trial basis and will soon conduct the investigation and disclose it at the end of February. Since there are many concerns, it may be difficult to predict how this system will be evaluated after implementation. However, as the KNCCO said, in the long run, it is expected that publicly comparing prices will be effective in terms of consumers’ rights to know.
By Lee Ga-eun, AG Reporter
dlrkdms2231@ajou.ac.kr
Comments