Line Man Wongnai has reported that the online food delivery market continues to grow, but the unfavourable economy could cause more than 50,000 to 100,000 small restaurants to close.
Thailand has a total of 700,000 restaurants, including mobile street vendors, with the total business value estimated at 800 billion baht. Of the total value, online food delivery services account for 15%.
"We recorded 10% growth for online food delivery in the past five months and we expect the growth to continue this year," said Yod Chinsupakul, chief executive of Line Man Wongnai.
Food is a necessity, so it less affected by the challenging economy, he said.
Usually around 50% of food sellers close their business within the first year of opening, while another 20-30% shutter their business later, said Mr Yod.
On Line Man Wongnai's platform, usually 50,000-100,000 restaurants close per year but this year the number might be higher, said Mr Yod, adding that most of the shuttered restaurants were small ones.
Mr Yod said the online food delivery market in Thailand is worth 100 billion baht.
"I estimate 50% of restaurants have embraced digital technology," said Mr Yod.
The company also sees growth in business-to-business (B2B) solutions, mainly those related to payment, merchant management and point of sale solutions, aimed at serving restaurants.
Mr Yod said the company has three main businesses, namely an on demand service covering food delivery and ride hailing, B2B solutions, and online financial and payment services. Food delivery is the main contributor to the company's revenue, he noted.
To grow its B2B solutions, the company signed a memorandum of understanding with the Business Development Department to support the food business by equipping operators with technology and helping them expand to the online channel.
He said Line Man Wongnai has successful food merchants who have been able to expand to more than 20 branches by selling their wares on the Line Man Wongnai platform and by using its point of sale system and an electronic menu to support their operations.
Napintorn Srisunpang, deputy commerce minister, said Thailand has more than 300,000 food operators of which 90% are small and medium-sized enterprises (SMEs).
Under the MoU, the ministry will bring up to 500 of the "Thai SELECT" food operators to be trained on digital technology and participate in the Line Man Wongnai platform.
Thai SELECT is a certification awarded by the ministry that guarantees the authentic taste of Thai food products.
Mr Yod said 50,000 food operators had adopted the company's point of sale system and the addressable market could be 50% of all restaurants in Thailand.
The company will offer more types of financial services and is likely to offer loans for merchants through partnerships such as one with Line BK. It also has a partnership with TQM's lending service.
"We're also in discussion with potential businesses for 1-2 acquisition deals to complement our ecosystem," said Mr Yod. Previously, the company acquired Foodstory and Linepay.
The company also aims to be the market leader in terms of revenue, while believing that in terms of order numbers, Line Man Wongnai is already No.1.
Mr Yod said Line Man Wongnai is making headway in terms of a positive business performance and is preparing to launch an initial public offering by the third quarter of 2025 at the earliest in Thailand. It is also considering a dual listing in Thailand and the US.