Super apps eye other realms
Online food delivery market has matured
Super app players are focusing more on non-food delivery businesses to seek new growth opportunities in response to the maturity of the online food delivery service market.
Food delivery service remains unprofitable as operators subsidise the cost of the delivery drivers and allocate high marketing budgets while paying high fuel prices.
According to data analytics firm Creden Data, the four major players — Line Man Wongnai, Grab Thailand, Foodpanda and Robinhood — in 2021 posted combined losses of more than 8.6 billion baht.
In 2022, Line Man reported a loss of 2.7 billion baht, according to information updated by Creden Data.
Anantaporn Lapsakkarn, senior researcher at Kasikorn Research Center (K-Research), said Thailand’s online food delivery business is reaching maturity, as people have resumed normal life by eating outside and the price of food has also increased prompting consumers to spend less on ordering food via digital platforms.
K-Research predicts the value of Thailand’s online food delivery market will decline between 0.8% and 6.5% in 2023.
The market value is expected to tally 81-86 billion baht in 2023 but the value still exceeds the pre-pandemic level.
Food delivery operators need to find non-food revenue sources as consumer spending has still not rebounded. Consumers are still focused on ordering fast food or instant food, said Mr Anantaporn.
Yod Chinsupakul, chief executive of Line Man Wongnai, said although the food delivery market is not expected to perform well, gross merchandise value for Line Man from January 2022 to April 2023 grew 33%.
The market is expected to grow in 2024, said Mr Yod.
Bangkok and the metropolitan region recorded a 25% increase in orders and a 27% growth in the company’s users. Other provinces experienced a 17% growth in orders and a 10% growth in users.
Line Man is planning to continue to invest in marketing to attract more users and increase the options for restaurants across Thailand.
It has introduced new features to enhance customer convenience, such as group ordering, allowing users to order food together with friends or family in a single order.
The market is no longer heavily influenced by subsidies, as there are fewer players compared to last year, said Mr Yod, adding that the company will focus more on non-food business, which has continued to grow.
Messengers and taxi services also show good potential. Last year, Line Man Messenger, which provides urgent delivery of goods, documents and bill payment services, recorded double usage nationwide and quadruple usage in some provinces.
Line Man Mart, a service for ordering urgent goods, saw orders increase by 1.6 times. The service has expanded by including more than 11 leading brand stores with over 2,000 branches nationwide.
Line Man Taxi, a taxi-hailing service, has experienced continuous high demand, with double growth in 2022.
Line Man is using technology to enhance the efficiency of assigning jobs to taxi drivers.
The company also aims to expand its use of point of sales solutions in dine-in restaurants nationwide, enabling restaurants to leverage technology for better management.
Earlier, Worachat Luxkanalode, country head of Grab Thailand, said the company continues to focus on building sustainable growth.
Grab focuses on operational efficiency, driven by innovation and technology to enhance all operations, covering the four core services of mobility, delivery, financial and enterprise solutions.