South Koreans are known to love to dine out. Especially in Seoul, the price of the ingredients to cook a meal at home are often not that much higher than just going to a restaurant, getting takeout, or ordering food delivery. According to a survey in 2018, households in South Korea spent an average of 111.1 thousand South Korean won per month to dine out together, on top of another 51.7 thousand won for food delivery and takeout. Those figures do not include the costs of dining out with friends. Additionally, the country’s work culture often includes work dinners, which happen regularly, adding even more value to the industry.
In 2017, McDonald’s had a market share of 1.2 percent based on value sales, making it the leading foodservice company in South Korea. Nevertheless, South Korea’s foodservice market is made up mostly by small- to medium-sized, family-owned businesses and in terms of sales, independent operators lead the market. In 2018, sales of independent restaurants were almost twice as much as the sales of chain restaurants. While chain restaurants are expected to grow faster than other restaurant types, independent operators are still forecasted to go strong against their competitors.
When South Korea introduced the 52-hour work week in 2018, concerns were raised by the foodservice industry about fewer work dinners and business drinks. The law started coming in effect for companies with more than 300 employees in 2018 and has only been affecting smaller companies since January 2020. Whether or not this will have a huge impact on the industry is yet to be determined. Another major concern are the increased prices for beer and soju, as foodservices become worried about selling less drinks. Additionally, due to the coronavirus (COVID-19) outbreak in the beginning of 2020, less people go out to public spaces. Nevertheless, many tend to compromise and order food delivery. How deeply COVID-19 will harm the foodservice industry is still unclear.
One of the biggest headlines in the foodservice industry in South Korea in 2019 was the four billion U.S. dollar acquisition of the South Korean company Woowa Brothers by the Germany-based Delivery Hero. Woowa Brothers operates the most downloaded and used food delivery application Baedal Minjok, also known as Baemin, as well as other services. With the acquisition of the company, Delivery Hero, the company behind the popular food application Yogiyo, bought their biggest rival in the South Korean market.