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Journal of Economic Theory and Econometrics
Journal of the Korean Econometric Society
The Cannibalization Effect of Food Delivery Platforms on Sales
Vol.35, No.3, September 2024, 1–12
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Kyeongbae Kim
(Sejong University)
Gong Lee
(Korea Development Institute)
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Abstract
Utilizing novel credit card transaction data from 2020 that encompass all Korean restaurants, we quantify the restaurant-level impact of platform sales on total restaurant sales and the degree of cannibalization of other sales channels, including on-premise dining and takeout orders. We observe a robust positive effect of platform sales on total sales, with limited cannibalization effects on other sales. For each additional Korean won earned from food delivery platforms, total sales revenue increases by 0.858 to 0.965 won, while the platforms cannibalize between
0.035 to 0.142 won from other sales. Notably, while the extent of cannibalization varies by restaurant type, substantial sales growth is observed across all restaurant types.
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Keywords
Food delivery platforms, sales cannibalization, online shopping, on-premise dining, COVID-19. |
JEL classification codes
L81, L83, L10. |
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