Line Man Wongnai aims for unicorn status by 2023
The merger between restaurant review platform Wongnai and on-demand and delivery app Line Man is intended to create a unicorn startup and hold the pole position in the country's end-to-end food platform by 2023.
Competition in the segment is expected to intensify as other key players adjust business strategies. Gojek plans to outline its strategy tomorrow after rebranding from Get, while Foodpanda is gearing up for delivery of fresh food and grocery items.
Line Man Wongnai completed the merger on Sept 2 after receiving 3.3 billion baht in funding from growth capital firm BRV Capital Management in July.
"The pandemic accelerated online food delivery adoption by 1-2 years. Thais' behaviour changed, opening the door for a huge opportunity in the segment, which accounts for 5% of total food and beverage market valued at 700 billion baht," said Yod Chinsupakul, Line Man Wongnai's chief executive.
Last year the online food delivery market was valued at 35 billion baht and it is expected to grow by 84% this year, he said.
The food and beverage market records annual growth of only 2-4%, said Mr Yod.
The merger should increase the efficiency and profitability of its business as Line Man Wongnai aims to become the first Thai unicorn startup, he said.
"We have 600 staff with no plan for layoffs," said Mr Yod. "An IPO and the next funding round are in the pipeline."
In Thailand, consolidation in the segment can be expected, driven by the intense competition, he said.
Strong financial support is still needed as the players have to subsidise delivery cost and roll out promotion campaigns.
Mr Yod said if the rumour about a merger between Grab and Gojek comes to pass, Line Man Wongnai could face tough competition as Grab is a big app.
Yet Line Man Wongnai has insights into local merchants and customers that can differentiate its service, he said.
"The online food delivery war in Thailand began in 2018 and is expected to continue for three years through price cutting, service efficiency and new products and services offered," said Mr Yod.
Line Man has 3 million monthly active users while Wongnai has 10 million users. The merger will be a boon for the online-to-offline food segment, he said.
Line Man has engaged with 200,000 restaurant partners.