This study analyzes the impact of food delivery service platforms on the restaurant market in South Korea. The appearance of a delivery app leads to many changes in the food service industry. Using monthly sales panel data of restaurants nationwide in 2020 provided by a credit card company, this study examines the revenue growth of restaurants which use a delivery platform. It also relates to sales redistribution among restaurants that use a delivery platform.

The study finds that restaurants which use a food delivery service platform have higher sales than those which do not. During the COVID-19 pandemic in 2020, sales through delivery apps played a role in compensating for the sharp decline of in-person dining at many restaurants. In particular, restaurants with low sales are more likely to raise their position in the market with a food delivery platform. It implies that small restaurant owners should be more actively encouraged to use a delivery platform.

Second, it also shows that sales changes occurred when a restaurant started or stopped using a delivery service platform. Each restaurant can expect a 33.0% sales growth due to the use of delivery apps. In addition, it turns out that restaurants with lower sales have higher expectations of sales growth with a food delivery platform than those with higher sales.

Finally, this study shows sales inequality of entire markets could worsen due to food delivery service platforms. As a result of the Gini index, a food delivery sales component has a more significant contribution to worsening inequality as compared to dine-in sales.

Based on the above empirical analysis, this report can suggest several implications for the growth and distribution of the delivery platform market. Food delivery platforms increase consumers’ convenience and benefit owners of both small and large restaurants. Therefore it is essential to set a policy direction that does not hinder this effect. However, as all restaurants begin to use delivery apps, the larger restaurants are able to increase their market share more than smaller restaurants. It suggests that new policies address ways to maintain a competitive market.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Literature Review

Chapter 3 Current Status of the Domestic and International Food Delivery App Markets
　Section 1 Domestic Market
　Section 2 International Market

Chapter 4 Structure and Key Issues of the Domestic Food Delivery App Market
　Section 1 Structure of the Food Delivery App Industry
　Section 2 Key Issues in the Food Delivery App Industry

Chapter 5 Empirical Analysis of Revenue Impact on Restaurants Using Food Delivery Apps
　Section 1 Data Overview and Descriptive Statistics
　Section 2 Impact of Food Delivery Apps on Restaurant Revenue

Chapter 6 Policy Implications and Conclusion

References
Appendix
ABSTRACT