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Korean Retail Giant’s Yogiyo Deal Heats Up Food Delivery Battle

By News Creatives Authors , in Business , at August 18, 2021

South Korean conglomerate GS Group’s retail arm, together with two private equity firms, is buying food delivery app Yogiyo from Delivery Hero in a deal that will intensify competition in the world’s third-largest online food delivery market.

GS Retail, which made Forbes Asia’s Best Over A Billion list in 2019, is teaming up with Hong Kong-based private equity firm Affinity Equity Partners and Permira in London in a deal valuing Yogiyo at $685 million.

Analysts say GS Retail expects the acquisition to grab consumers who shop largely online during the pandemic, especially younger shoppers. “The pandemic has redesigned society,” says Abishur Prakash, cofounder of consulting firm Center for Innovating the Future. “It has made online and app-based shopping the de facto method for millennials and Gen Z. This has created new opportunities for large companies, like GS Retail, to seize.”

South Korea’s food delivery market has doubled to become the world’s third-largest since the start of Covid-19 in early 2020, according to data from market research firm IHS Markit, as consumers in the hyperconnected country place orders online rather than venturing out to shop.

More on Forbes: Grab Says Growth Momentum In Food Deliveries To Continue After Robust First Quarter Net Sales

GS Retail can handily use Yogiyo to sell its existing goods, Prakash notes. Migration to online grocery shopping “has made it increasingly important for GS Retail to have a strong online food delivery platform in order to compete effectively and maintain market share in the South Korean consumer market,” says Rajiv Biswas, Asia-Pacific chief economist with IHS Markit.

GS Retail-Yogiyo would take on South Korea’s biggest food delivery service, Woowa Brothers. Woowa Brothers, which owns Korea’s food delivery market leader Baedal Minjok, plans to enter 15 countries in the Indo-Pacific region, Biswas says. Delivery Hero acquired Woowa Brothers in March for $4 billion, and the sale of Yogiyo was part of the condition to win regulatory approval for the Woowa Brothers deal.

“Consequently, the two online food delivery firms, which are the market leaders in South Korea, will continue to compete strongly against each other to win market share,” Biswas forecasts. “They will also face competition from other existing food delivery apps as well as new competitors entering the South Korean market.”


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