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Analysts expect Thailand's food delivery market will have only 2-3 major players as market maturity requires economies of scale and players diversifying to businesses with better profit margins. Delivery Hero, the world's leading delivery platform, announced on Wednesday that Foodpanda, its Asia-based business, will stop operating its platform, food and grocery delivery services in Thailand on May 23. According to Singapore-based research firm Momentum Works, Thailand's food delivery market in 2024 tallied US$4.
2 billion, with Grab claiming a market share of 46%, Line Man Wongnai 40%, ShopeeFood 7%, Foodpanda 5%, and Robinhood 2%. Business analytics firm Creden Data reported Delivery Hero (Thailand) Co Ltd posted an accumulated net loss of 13.8 billion baht from 2014-2023.
Delivery Hero said it is focusing on optimising its geostrategy, as shown by previous exits from Denmark, Ghana, Slovakia and Slovenia. The company will continue to concentrate efforts in other parts of Asia-Pacific where the group sees greater returns, said Delivery Hero. The firm's regional team that provides services such as marketing and administration for Asia-Pacific is based in Thailand, and it continues to operate as usual.
According to Creden Data, Delivery Hero (Thailand) improved its reported loss in 2023, losing 522 million baht compared with a loss of 3.2 billion baht in 2022. The company has never posted a profit since its establishment 13 years ago, said Pawoot Pongvitayapanu, an e-commerce pundit.
In 2022, the media reported a rumour that Delivery Hero wanted to sell its Thai business, with Line Man Wongnai a potential buyer. According to Bloomberg, the deal was worth $100 million. Mr Pawoot said the price may have been too high.
Last year SCB X Plc sold Purple Ventures Co Ltd, the provider of the Robinhood application, to a group of investors led by Yip In Tsoi Group. Mr Pawoot said there are six subsidiaries under Foodpanda. In 2023, its only profitable business was the advertising arm Delivery Hero Promotion (Thailand), posting a profit of 64 million baht from revenue of 138 million baht.
In that year, the food delivery business posted the highest revenue for the Thai unit of Delivery Hero, recording 3.8 billion baht, but had a loss of 522 million baht. Delivery Hero Logistic (Thailand) recorded revenue of 1.
6 billion baht that year, with a loss of 90 million baht. According to Creden, the Foodpanda group recorded a loss of 596 million baht in 2023 on revenue of 6 billion baht. Yod Chinsupakul, chief executive of Line Man Wongnai, said earlier Thailand's online food delivery market should have 2-3 players as they need economies of scale in terms of restaurants, drivers and users.
Line Man Wongnai did not break even last year, but expects to post a profit this year, he said. The company's ride-hailing business has a low market share, but a substantial share in food delivery. The online food delivery market still has ample room for growth, with a market value of 120-150 billion baht, while Thailand's total food market is worth 800-900 billion baht, said Mr Yod.
The online food delivery market is expected to expand by 10% this year as users, particular those in Gen Z, continue to place orders online, he said "The online food delivery market comprises 15% of the total offline food restaurant market. This rate can increase to 25-30%, similar to China," said Mr Yod..
