Foreign Startups Target the Korean Food Industry

Foreigners in South Korea have long contributed to a diversified food scene, with everything from authentic home cuisine to fusion menus. The demand has been growing among domestic customers, who travel and study abroad in record numbers. The supply of international cuisine has also increased as more foreigners settle in South Korea long term. Itaewon remains a central hub among Western immigrants, famous for its diverse kitchen and dynamic club scene. The popularity of international eateries has led to a revitalization of the surrounding neighborhoods of Itaewon, including Gyeonglidan-gil and Hannam-dong. 

While the global food industry in South Korea has expanded steadily over the past years, it is only recently that foreigners started to approach the industry with technological solutions. In particular, the two apps ShuttleDelivery and DamaGO have received much attention. Both companies have developed apps that connect restaurants with customers, but their approaches are unique. 

ShuttleDelivery is a food delivery service that combines an online order function with offline delivery. The customer can look up nearby restaurants and have ShuttleDelivery pick up the takeout menu to be delivered at the door. The core business concept is in many ways similar to other food delivery services, including domestic competitor Baedal Minjok and the German company Foodora. However, ShuttleDelivery distinguishes itself from other apps by targeting a niche market. In particular, the company has applied two mutually reinforcing strategies. First, the app provides services in English. This has been crucial in attracting foreign consumers because many expats and migrants to South Korea have little knowledge of the language, and therefore find it difficult to navigate local apps. Adding to this is a complicated verification system that can be daunting to first-time users. Second, ShuttleDelivery connects customers with international restaurants that are not available in competitor apps. A strong outreach among foreign food businesses has provided ShuttleDelivery with a competitive advantage that attracts both migrants and native customers.   

DamaGO is another food app that connects customers with local restaurants. The platform is modeled in a way that reduces food waste while promoting business. Many restaurants are left with unsold quantities by closing time, and end up throwing away significant amounts of food. The problem is not unique to restaurants in South Korea, and various entrepreneurs across Europe and America have sought to come up with ways to promote more sustainable food consumption. A popular solution is apps that allow restaurants to put up their remaining food for sales at the end of the working day at discounted prices. By doing so, the environment is saved from additional food waste, while customers benefit from a reduced price and companies enjoy more sales. The founders of DamaGO observed this growing trend in other parts of the world and saw it apt for the Korean market, which hosts a significantly sized restaurant industry. Furthermore, the sustainable approach to business fits within an emerging trend towards more conscious consumption in South Korea, which is still in its early stages but showing signs of steady expansion. Similar to ShuttleDelivery, DamaGO is also focused on a culturally diverse cuisine and enables customers to navigate the market in English as well as Korean. 

Both DamaGO and ShuttleDelivery draw their strengths from a tailored approach and timely entry into a booming market for technological solutions that connect customers with a unique range of restaurants. Foreign consumers represent a steadily increasing customer segment. Additionally, there is a strong demand for international food, also among native consumers. Key factors to further growth for both companies will be continued multilingual service, targeted marketing, and geographical diversification. 

AUTHOR

Felicia Istad is a PhD student in Public Policy at Korea University, Seoul. Her research is primarily focused on diversity policies and entrepreneurship.