The online food delivery market in Vietnam is always considered to have great potential. This type of service can be provided directly by food service businesses (restaurant delivery), or by an intermediary delivery platform linked to partners who are providing food services (platform delivery).
As of now, Vietnam has up to 73.2% of the population regularly using the Internet, and 53% of them use online food delivery services. In 2023, the number of orders placed through intermediary food delivery platforms is expected to increase significantly, with over 12 million people ordering food, representing an annual user growth rate of 17.5%, equivalent to 1.8 million people. The estimated average revenue per capita in 2023 is 39.66 USD. This sector is projected to grow by 19.1% compared to the same period last year, and the compound annual growth rate for the 2023-2027 period is expected to reach around 5.48%.
After conducting a survey on the most widely used online food delivery applications in 2022, Vietdata found that ShopeeFood is the most popular platform, followed by GrabFood, Baemin, Gofood, ...
Chart of the usage rate of some online food delivery apps in 2022
Grab - GrabFood
On 27/02/2014, the Grab technology ride-hailing app made its debut in Vietnam under the name GrabTaxi. By June 2018, Grab introduced a new product called Grabfood - the fastest-growing food delivery service in Vietnam.
Currently, GrabFood is available in 19 provinces and cities from the North to the South. Grabfood is experimenting with a new feature, different from other food delivery apps, called "Delivery Options". Specifically, GrabFood users can choose one of three delivery modes: Save; Fast; Priority. These options will help optimize delivery time or the cost for customers. As for registering to open a restaurant or sell on GrabFood, GrabFood is currently charging its restaurant and eatery partners 25% to 30%. In the first year, the discount is 25%, and in the following years, the discount will increase to 26% to 30%. When registering a restaurant with GrabFood, there is a shop registration fee of 1 million VND. In June 2023, Grab officially entered into an exclusive partnership with the MICHELIN guide. This will help GrabFood become a channel for promoting cuisine, effectively reaching diners and increasing revenue for many restaurant and eatery partners across Vietnam.
The net revenue for 2020 and 2021 fluctuated insignificantly and reached around 3,500 billion VND, with a significant increase in 2022 of nearly 100%. After-tax profits fluctuated significantly, decreasing by nearly 230% in 2021, then increasing by over 200% in 2022 to reach approximately 210 billion VND.
Net revenue chart of some online food delivery companies 2020 - 2022
ShopeeFood
ShopeeFood is the new name of the Now app (formerly known as Delivery Now), which is one of the popular food delivery apps in Vietnam at present, launched in 2016 by Foody Joint Stock Company. Shopee's parent company, Sea Group, acquired Foody for $64 million in 2017.
Since its launch, ShopeeFood has been available in 21 major provinces and cities nationwide with over 50,000 drivers. Leveraging on the large voucher sale events of Shopee on 12/12, 1/1, and 2/2, ShopeeFood also applies similar time frames to release significant discount vouchers, which is one of its special strategies. When partners register to open a store, ShopeeFood applies a 25% commission rate. The cost of opening a store is completely free.
The brand's net revenue has been recorded to increase from 2020 to 2022. Specifically, it reached about 850 billion VND in 2020, increased by over 40% in 2021, and continued to increase by nearly 70% in the following year. Despite the positive growth rate in post-tax profit, the brand is still incurring losses. The loss was approximately 1,500 billion VND in 2020, increasing by nearly 60% and 70% in the following two years respectively.
Baemin
Launched in 2019, the Baemin brand belongs to Woowa Brothers Vietnam Limited Company. It is a food delivery app known for its friendly image and creative, dynamic, and relatable advertising campaigns.
The brand recently withdrew from the Vietnamese market at midnight on December 8, 2023. Prior to this, at the end of September, Baemin had scaled back its operations in Vietnam, ceasing activities in certain locations such as Hoi An, Thai Nguyen, Bac Ninh, reducing employment, and appointing a new CEO for the region. Unlike the "global delivery super apps," Baemin, as a standalone food delivery app, received less investment in marketing budgets. Additionally, in the e-commerce race, Baemin faced limited cash flow due to its focus on a restricted market segment and competition from other super apps. Moreover, Vietnamese consumer culture still favours traditional dining, with app users seeking substantial discounts, leading to reduced revenue when discounts are cut. These factors may have contributed to Baemin's inability to achieve the desired level of profitability, prompting its exit from the market.
Baemin's net revenue saw a steady increase from 2020 to 2022, specifically rising by nearly 70% in 2021, 8% in 2022, reaching around 800 billion VND. Despite the increase in net revenue, the brand recorded the largest losses compared to other apps for three consecutive years, fluctuating around 1,400 billion VND.
Profit after tax chart of some online food delivery companies 2020 - 2022
GoFood - Gojek
The online food ordering application GoFood was officially launched in November 2018. GoFood is integrated directly into the Gojek app (previously known as Go-Viet) owned by the technology trading company Go Viet.
With over 200,000 drivers and tens of thousands of restaurants in Hanoi, Ho Chi Minh City, Binh Duong, and Dong Nai. In July 2023, the online food ordering feature of GoFood was introduced on the MoMo platform by Gojek, further promoting extensive cooperation between Gojek and MoMo. Without having to leave the MoMo platform but still maintaining connectivity to the Gojek ecosystem, consumers can easily search for their favourite dishes, place food orders, and make payments through MoMo. When selling food on GoFood, the store owners will share a 25% discount with GoFood for each order, and registering a store is completely free.
The brand's net revenue has fluctuated from 2020 to 2022. Specifically, it reached about 260 billion dong in 2020, increased by nearly 30% in 2021, and then sharply decreased by over 70% in 2022. After-tax profits recorded continuous losses for 3 consecutive years. In 2020, the loss was over 700 billion dong, decreased by nearly 40% in 2021, and continued to decrease by nearly 30% in the following year.
Be - BeFood
On April 8, 2022, Be Group Joint Stock Company - the owner of the Be app, officially resumed its BeFood food delivery service. Previously, this project had to be temporarily suspended to focus on its core business of ride-hailing, in order to narrow the gap between Be and its number 1 competitor - Grab.
Currently, BeFood has around 300,000 drivers. Up to now, BeFood has been present in over 28 provinces and cities. BeFood is the pioneering unit that waives fees for orders with a total food value of less than 50,000 Vietnamese dong. Specifically, previously in addition to the order value, customers also had to pay additional fees for food orders, including platform usage fees, small order fees, etc. In total, buyers could have to pay up to an additional 13,000 dong per order, not including delivery fees and other special additional fees. With the new policy, users only need to pay 3,000 - 5,000 dong (excluding other special additional fees). For partners, BeFood charges a 25% commission for each order, and it is completely free to register a store on the platform.
The net revenue for the period 2020 - 2022 has fluctuated, decreasing by over 25% in 2021, increasing by nearly 140% in the following year, and reaching around 850 billion dong. The company has incurred losses for 3 consecutive years. Specifically, in 2020, the loss was nearly 500 billion dong, increasing by over 20% in 2021, and then decreasing sharply by nearly 150% in 2022.
Loship
In November 2017, Lozi Vietnam Joint Stock Company launched the Loship service, delivering food and drinks to users.
Loship is now present in over 12 provinces and cities nationwide, with about 50,000 drivers and 200,000 partner restaurants. The platform is serving over 1.5 million customers nationwide and handling around 70,000 transactions per day. In 2021, Loship partnered with Viettel Money to allow consumers to order food online through the Viettel Money app. The commission rate that Loship is currently charging its restaurant partners is 27.5%. The registration fee for each area varies, ranging from 550,000 to 1,000,000 Vietnamese dong.
The net revenue growth has been maintained during the 2020-2022 period. It reached around 50 billion in 2020, increased significantly by nearly 200% in 2021, and had a slight increase in 2022. However, the brand recorded a post-tax loss for 3 consecutive years with fluctuations. Specifically, in 2020, the loss was around 100 billion, decreased sharply by nearly 250% in 2021, and increased by over 40% in the following year.
The Covid-19 pandemic has almost changed the consumer behaviour in the F&B market, including the shift from direct to online shopping. Customers have seen that online applications provide more convenience and transparency, as they can compare menus and prices of different restaurants. They offer a variety of traditional Vietnamese dishes, Western cuisine, and Asian cuisine without the need to travel to different places. However, due to the price comparison of orders, it has created a significant disadvantage for small market share apps, leading to years of loss in business results, as they find it difficult to frequently offer food discounts and delivery charges to compete on prices with their increasingly competitive rivals.
Source: Vietdata's 2022 market report on the online food delivery industry.
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