Analysts expect Thailand’s food delivery market will have only two to three major players as market maturity requires economies of scale and players diversifying to businesses with better profit margins, reports the Bangkok Post.
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%.
Delivery Hero (Thailand) Co Ltd posted an accumulated net loss of B13.8bn from 2014-2023, according to business analytics firm Creden Data.
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 B522 million compared with a loss of B3.2bn 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 US$100mn.
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 B64mn from revenue of B138mn.
In that year, the food delivery business posted the highest revenue for the Thai unit of Delivery Hero, recording B3.8bn, but had a loss of B522mn.
Delivery Hero Logistic (Thailand) recorded revenue of B1.6bn that year, with a loss of B90mn.
According to Creden, the Foodpanda group recorded a loss of B596mn in 2023 on revenue of B6bn.
Yod Chinsupakul, chief executive of Line Man Wongnai, said earlier Thailand’s online food delivery market should have two to three 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 B120-150bn, while Thailand’s total food market is worth B800-900bn, 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.