Struggles persist for Kyochon Chicken amidst regulatory challenges, as the brand strives to rebuild its image
In a move that could reshape the delivery app landscape in Seoul, Kyochon Chicken, a renowned player in the Korean fried chicken market, is shifting towards an exclusive delivery agreement with Baemin, operated by Woowa Brothers. This decision effectively excludes Coupang Eats from the delivery options for some franchisees who opt in.
The company asserts that this move is intended to provide franchise owners with more choices and the freedom to reduce delivery fees. However, franchisees can still use both Baemin and Coupang Eats if they wish, albeit with incentives tied to exclusivity with Baemin.
This exclusive partnership has sparked controversy, with critics, including the Association for Fair Platforms representing business owners, arguing that tying incentives to exclusivity restricts consumer choice and may potentially violate fair trade laws, constituting "conditional exclusive dealing." The Association referenced President Lee Jae Myung's campaign pledge against fee discrimination among delivery platforms, framing this deal as unfair under that principle.
Industry analysts view Kyochon's aggressive tactics as a response to losing its leading position in the Korean fried chicken market, now falling behind competitors such as BHC and bb.q after raising prices and facing stiff competition. The partnership with Baemin is part of Kyochon's strategy to regain market share amid challenging conditions.
The controversy surrounding the Baemin deal could have implications for Kyochon's public perception, given the potential violation of fair trade laws and the restriction of consumer choice. The deal could also impact Kyochon's marketing strategies, as the company relies on celebrity endorsements, such as actor Byun Woo-seok, to promote its brand on Instagram.
It's worth noting that this marks a significant shift in Kyochon's delivery strategy, as the company's logo was previously visible on a branch in Seoul on Nov. 21, 2021, and a restaurant in the city was advertised on Baemin on Jan. 22, 2025. The potential resumption of Brazilian chicken imports could further impact the Korean fried chicken market, as the industry is experiencing a return to its original locations.
As the legal and consumer choice implications of this move continue to be debated, the Baemin deal, if it occurs, represents a notable development for Kyochon Chicken and the delivery app industry in Seoul.
- The exclusive partnership between Kyochon Chicken and Baemin, fueled by concerns over consumer choice and potential violations of fair trade laws, has sparked debate within the international financial circles and business communities, questioning the legitimacy of incentivizing exclusivity.
- Given the controversy surrounding the Baemin deal, Kyochon Chicken's reputation in the Korean market may be adversely affected, with concerns voiced by various industry analysts who argue that the deal may lead to negative public sentiment and potential consumer backlash.
- With the potential resumption of Brazilian chicken imports and the shift in Kyochon's delivery strategy, the Korean fried chicken industry is witnessing a significant transformation, both domestically and internationally, as competitors respond to Kyochon's move and the market evolves.
- As the ongoing debate surrounding the Baemin deal unfolds, the culture of consumer choice, fair competition, and transparency within the South Korean delivery app industry is being placed under scrutiny, with Kyochon Chicken at the forefront of this new and unprecedented industry trend.
