German Delivery Hero orders up South Korea's Woowa

Forming a new joint venture, Germany's Delivery Hero agreed to buy Sout Korea's top food delivery app operator Woowa Brothers. It will cost $4 billion and is meant to take on heavyweights such as Uber Eats in other fast-growing Asian markets.

Woowa announced the deal on Friday, reports Reuters. This deal is the biggest global play so far for a food delivery app. According to the South Korean company, the sale is a "survival strategy" in a very competitive market. It would be the biggest deal involving a South Korean internet firm as well. Delivery Hero’s Yogiyo app ranks second behind Woowa’s Baedal Minjok. However, the sector leader faces stiff competition from rivals such as e-commerce firm Coupang, backed by Japanese investors.

The South Korean Food Market

South Korea’s online market for food delivery and pickup has more than doubled over the past five years to $5.9 billion. This makes it bigger than the Japanese and German market combined, trailing only the Chinese, United States and the United Kingdom. The South Korean market has a very high smartphone penetration rate and is the fourth largest market for online food orders. A huge jump in the number of single households is also boosting online food delivery services. The competition in the market is intense. UberEats restaurant delivery business pulled out of Southe Korea earlier this year, reflecting the intensity in the market. The South Korean food market is expected to jump to $9 billion by 2023.