Econ
Vietnam's food delivery market heats up with new players
Vietnam’s US$33 billion food delivery market has remained appealing to investors with more new service providers deciding to jump on the bandwagon.
Malaysia-based ride-hailing firm Grab has recently launched GrabFood in Ho Chi Minh City, setting to break into the lucrative food delivery market in Vietnam. The company has 500 partners which are restaurants and food shops in the city.
Grab is no stranger to the food delivery market in Vietnam. In fact, many restaurants already use their ride-hailing app for deliveries. With GrabFood, however, the company hopes to expand their role by acting as the intermediary between restaurants and customers, giving Grab a distinct advantage over other, more established food delivery services in Vietnam.
Earlier, the market also saw a newcomer, Lala, which is invested by Ho Chi Minh City-based information technology and service provider Scommerce Group. Lala is considered a rising star in food delivery sector by industry insiders, having the advantage of hi-tech know-how from its parent firm. Lala connects its users directly with restaurants before its shippers from Ahamove, also a child of Scommerce Group, delivers food.
Currently, the local market has two best names – Delivery Now, and Vietnammm.com. Delivery Now is a product of Foody Corporation under Singapore-based internet firm Sea LTD, while Vietnammm.com is a subsidiary of Takeaway.com, one of the world’s largest online food ordering websites based in the Netherlands.
The market also has some other food delivery service providers, such as Eat.vn and Chonmon.vn invested by Hanoi-based tech firm VCCorp. While Chonmon.vn targets local customers, Eat.vn focuses on serving expats and foreign visitors to Vietnam.
Though there is no official figure about market share, a survey by Havas Riverorchid confirmed that Delivery Now is the first name consumers would think of when asked about food ordering service in Ho Chi Minh City.
Battle in fertile market
The demand for ordering food online and getting deliveries at given addresses in the country’s large cities has increased rapidly. According to the Vietnam Retailers’ Association, only 30 percent of urbanites ordered food online in 2017 in Hanoi and Ho Chi Minh City, but the figure soared to 70 percent in the first six months of 2018. This means that the number of service users increased by 40 percent just within one year.
UK-based market research firm EuroMonitor International values the food delivery market in Vietnam at around US$33 million this year and at more than US$38 million in 2020. It also puts the annual growth rate of the market at 11 percent.
However there are fears that despite the strong growth of the local food delivery market, Vietnamese firms could be pushed out of the game, leaving the field exclusively for foreign investors.
According to industry insiders, if a fierce battle started around 4 years ago for the ride-hailing service in Vietnam, it is time now for a yet another battle in the food delivery market.
Vu Hoang Tam, co-founder and director of Lala, said that Delivery Now has already gained great popularity in the country and GrabFood poses a serious threat. Obviously, GrabFood is already equipped with an army of drivers, which makes it so easy for its delivery service.
Do Xuan Quang, deputy head of the Vietnam Logistics Business Association, said that the food delivery market is clearly a fertile ground for businesses but if Vietnamese firms do not prepare themselves for the race, they will repeat the failure of the logistics sector, allowing foreign companies to take over the market.
Vietnam’s food delivery market is forecast to value at over US$38 million in 2020
|
Earlier, the market also saw a newcomer, Lala, which is invested by Ho Chi Minh City-based information technology and service provider Scommerce Group. Lala is considered a rising star in food delivery sector by industry insiders, having the advantage of hi-tech know-how from its parent firm. Lala connects its users directly with restaurants before its shippers from Ahamove, also a child of Scommerce Group, delivers food.
Currently, the local market has two best names – Delivery Now, and Vietnammm.com. Delivery Now is a product of Foody Corporation under Singapore-based internet firm Sea LTD, while Vietnammm.com is a subsidiary of Takeaway.com, one of the world’s largest online food ordering websites based in the Netherlands.
The market also has some other food delivery service providers, such as Eat.vn and Chonmon.vn invested by Hanoi-based tech firm VCCorp. While Chonmon.vn targets local customers, Eat.vn focuses on serving expats and foreign visitors to Vietnam.
Though there is no official figure about market share, a survey by Havas Riverorchid confirmed that Delivery Now is the first name consumers would think of when asked about food ordering service in Ho Chi Minh City.
Battle in fertile market
The demand for ordering food online and getting deliveries at given addresses in the country’s large cities has increased rapidly. According to the Vietnam Retailers’ Association, only 30 percent of urbanites ordered food online in 2017 in Hanoi and Ho Chi Minh City, but the figure soared to 70 percent in the first six months of 2018. This means that the number of service users increased by 40 percent just within one year.
UK-based market research firm EuroMonitor International values the food delivery market in Vietnam at around US$33 million this year and at more than US$38 million in 2020. It also puts the annual growth rate of the market at 11 percent.
However there are fears that despite the strong growth of the local food delivery market, Vietnamese firms could be pushed out of the game, leaving the field exclusively for foreign investors.
According to industry insiders, if a fierce battle started around 4 years ago for the ride-hailing service in Vietnam, it is time now for a yet another battle in the food delivery market.
Vu Hoang Tam, co-founder and director of Lala, said that Delivery Now has already gained great popularity in the country and GrabFood poses a serious threat. Obviously, GrabFood is already equipped with an army of drivers, which makes it so easy for its delivery service.
Do Xuan Quang, deputy head of the Vietnam Logistics Business Association, said that the food delivery market is clearly a fertile ground for businesses but if Vietnamese firms do not prepare themselves for the race, they will repeat the failure of the logistics sector, allowing foreign companies to take over the market.
