Thailand’s online food delivery sector is becoming more sustainable with fewer players, according to an industry observer.
Over the past three years the industry’s major players have racked up combined losses of 20.7 billion baht from 110 billion baht in revenue.
Pawoot Pongvitayapanu, an e-commerce founder, said the industry would be more stable and sustainable as existing players find new growth engines, such as advertising enterprises.
The major players have already reported improvements in terms of losses and found more new businesses, he said.
Last year, the four major players — Grab Group, Foodpanda Group, Line Man Wongnai and Robinhood — reported a combined revenue of 41.1 billion baht.
However, Foodpanda, Line Man Wongnai and Robinhood posted combined losses of 3.14 billion baht.
On Tuesday SCB X announced the cessation of services on the Robinhood application. The app is operated by Purple Ventures Co Ltd, a subsidiary of SCB X Group.
The service is due to be discontinued on July 31, 2024.
According to SCB X, the holding company for Siam Commercial Bank, as the pandemic ended and the business sector stabilised, Robinhood had “completed its mission” to help small businesses.
Creden Data, a corporate performance service, reported that Purple Ventures posted an accumulated loss over the past four years of 5.56 billion baht.
The data service reported the total revenue of Grab Group, Line Man Wongnai (comprising Line Man Thailand and Wongnai Media), Foodpanda, and Purple Ventures expanded from around 29 billion baht in 2021 to 40.6 billion in 2022 and 41.1 billion last year.
Growth slowed last year as the industry matured and the economy faced challenges, according to Creden Data.
Grab Taxi (Thailand) posted a profit for a second consecutive year in 2023, with revenue expanding 2.8% to 15.6 billion baht, the lowest growth rate in recent years. However, the company’s profit tallied 1.3 billion baht, surging 127% year-on-year.
Line Man Wongnai’s revenue totalled 18 billion baht in 2023, surpassing Grab, but it reported a loss of 563 million baht.
For Line Man (Thailand) alone, it posted revenue of 11.6 billion baht in 2023, up 49% year-on-year. The company recorded a loss of 253 million baht last year, a vast improvement from the loss of 2.7 billion baht recorded in 2022.
Foodpanda also improved from losses of 4.7 billion baht in 2021, to 3.6 billion in 2022 and 596 million last year.
Robinhood was the only player to post rising losses the past three years, from 1.3 billion baht in 2021 to 1.9 billion in 2022 and 2.1 billion last year.
Anantaporn Lapsakkarn, senior researcher at Kasikorn Research Center, told the Bangkok Post that Robinhood’s market exit reflects intense competition as the business requires huge amounts of capital to offer promotional campaigns that attract customers.
In addition, Robinhood does not charge gross profit fees to the restaurants on its platform, unlike other players.
Mr Anantaporn said the market is not difficult to enter, but it has been dominated by a few major players in recent years, making it hard for new entrants to survive.
Yod Chinsupakul, chief executive of Line Man Wongnai, said the closure of Robinhood is unlikely to have a significant impact on the food delivery industry as it aligns with market mechanisms, and users still have multiple platform options.
He said the market is still growing. If the government allows the use of digital wallets for food delivery, it would increase revenue for small restaurants and revitalise the eatery industry, said Mr Yod.
Line Man Wongnai said it is committed to welcoming restaurants, stores and delivery drivers, both two-wheeled and four-wheeled, who have been affected by Robinhood’s closure.
Details would be announced through the company’s channels, he said.
