South Korea's food delivery apps are stepping up competition to improve service quality using artificial intelligence and data, correcting map coordinates so riders no longer hunt for restaurants and narrowing the margin of error in estimated delivery times.
Baedal Minjok, the country's largest delivery platform, will introduce a system next month that uses AI to automatically predict and calculate delivery times and display them to customers at the point of order, industry sources said on the 20th. Until now, restaurant owners had to estimate cooking and delivery times and enter them manually. The company developed the system to reduce that burden while cutting forecasting errors and giving customers more accurate arrival times.
Baemin draws on 58 types of data, including delivery volumes at individual restaurants, local congestion levels and rider availability. The company said the accuracy of its AI-based delivery-time forecasts now exceeds 50%, more than 1.7 times the accuracy of the previous method in which owners estimated the times themselves.
Rival Coupang Eats recently developed what it calls store-coordinate optimization technology. Rather than simply supplying GPS coordinates, it analyzes pickup locations, delivery partners' movement data and road information to guide riders to the exact location of a restaurant. The technology grew out of complaints from the field that the position shown on a map alone was not enough to find a store. A Coupang Eats official said inquiries about store locations have fallen sharply since the technology was adopted, and that cases in which delivery took more than an hour after an order also declined.
The industry is investing in accuracy because it sees the delivery quality that users actually experience as the factor determining repeat use. Even if free-delivery promotions bring in users, complaints such as late deliveries can pile up and drive customers away.
Competition in the delivery app market is also intensifying. Baemin's monthly active users stood at 24.4 million last month, up 5.8% from 23.06 million a year earlier. Over the same period, Coupang Eats grew 23.0% to 14.44 million from 11.74 million, sharpening its pursuit.
An official in the retail industry said reducing uncertainty so that customers receive their food when they expect it is a key factor in raising satisfaction and repeat use. "The fiercer the competition among delivery apps becomes, the more this will emerge as an important service advantage," the official said.
