BackFoodpanda, Uber take meal apps battle to Bangkok’s food paradise
Bangkok's famed love affair with food is spilling over to meal-delivery apps, a fledgling sector that Foodpanda projects will surge in 2018 as competition intensifies
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Bangkok: Bangkok’s famed love affair with food is spilling over to meal-delivery apps, a fledgling sector that Delivery Hero AG’s Foodpanda projects will surge in 2018 as competition intensifies.
Foodpanda, Line Corp.’s Line Man and Uber Technologies Inc.’s Uber Eats are using promotions, such as free delivery or discounts, to woo customers in a sector they see as underdeveloped compared with Hong Kong or Singapore. Bangkok may have some of the best regional potential for meal apps as it has so many street stalls and great restaurants, said Foopanda’s Thailand chief executive Alexander Felde.
“Thailand has a strong food culture and everyone has a specific connection to food," said Felde, who expects Foodpanda deliveries in the country to roughly double this year to 16,000 per day. “We’re still in the very early stage of the delivery business in Thailand."
Felde said Foodpanda leads in Thailand by revenue but is girding for more competition, predicting Indonesia’s Go-Jek and Roofoods Ltd.’s Deliveroo may start up in Bangkok in 2018. That signals a costly fight for customers using subsidies and, in time, consolidation when the competition becomes too painful, according to the Thailand Tech Startup Association.
“In the end, it’ll be like the ride-sharing business here where the smaller players will have to disappear," said Vachara Aemavat, the group’s president.
Thailand’s market for online food ordering is on course to hit 31.7 billion baht ($1 billion) this year, more than doubling since 2014. That’s faster than about 80% growth in the Asia-Pacific region as a whole, according to researcher Euromonitor International. But the latter market is far bigger, an estimated $87.5 billion in 2018.
Foodpanda started in Bangkok, a city of some 10 million people, in 2012 and makes the vast bulk of its sales in the capital. The Thai business has already broken even but margins are under pressure, Felde said.
Other competitors in Thailand include Grab and Vietnam-based Foody Corp.’s Now service. While the industry’s current approach of “throwing money at customers" can’t last long term, some rivals are well funded and could spark a “crazy war" for market share, Felde said. Bloomberg
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