UberEats, a delivery app, will withdraw from the South Korean market two years after its debut.
According to Uber Korea representative on the 9th, UberEats will end its service on the 14th of next month.
“After much consideration, we have reached a difficult decision to suspend UberEats’ business in Korea,” UberEats said in a message to its members. “We will focus on minimizing the impact on our restaurant and delivery partners as well as our customers who have loved UberEats.”
However, Uber Mobility business will still be operating in the country.
How UberEats can’t help but withdraw from the market
UberEats entered South Korea in August 2017. Then it started expanding its market by recruiting riders for general consumers pretty fast.
But a local startup came out, called the Delivery Nation. Then Yogiyo by Deliver Hero Korea followed entering the on demand delivery industry. And UberEats could not overcome the competition put up by locals.
According to industry sources, Delivery Nation has a hold of 50 percent shares in the South Korean delivery service market. And Yogiyo has 30% of the share. Meanwhile, UberEats’ shares are only staying in single digits, despite the 20 percent left of the chart.
The entrance of Coupang into on-demand food delivery industry might also affected UberEats to withdraw. The country’s leading e-commerce company puts a big threat even to the older players. Coupang Eats, as it called, has been attracting many consumers thanks to the popularity of its e-commerce site.
Food delivery itself has a very big market in South Korea. The country has had the privilege of having their burgers, chicken, pizza and Chinese delivered to wherever they are.
It is not the first time Uber has to admit defeats in the Asian market.
Previously, Uber had to give up its Southeast Asian units to be acquired by Grab. The acquirement puts Grab to be the first unicorn in the region. As well as the biggest player of ride hailing industry, alongside Gojek.
