Grab bucks the trend of struggling food delivery operators
The food delivery market in 2024 continues to experience a downward trend, and would be valued at around 86 billion baht, a 1% year-on-year contraction, according to Kasikorn Research Center.
The declining trend is persisting even though the average price per order is expected to increase by approximately 2.8% from the 2023 average, or around 185 baht per order.
This price increase affects both the frequency and volume of orders, leading to a reduction, the centre said.
According to the financial performances of the four major food delivery service providers in Thailand — Grab, Line Man, Robinhood, and foodpanda — only Grab has managed to be profitable for two consecutive years.
Data from Creden Data shows that Grab, registered under the name Grab Taxi (Thailand) Co Ltd, had a revenue of 15.197 billion baht in 2022, its 10th year of operations in Thailand, and a profit of 576 million baht. In 2023, Grab’s revenue increased to 15.622 billion baht with profits rising to 1.308 billion baht.
Line Man (Thailand) Co Ltd had a revenue of 7.802 billion baht in 2022 with a loss of 2.730 billion baht. In 2023, its revenue increased to 11.634 million baht, while losses saw a considerable reduction to 253 million baht.
Foodpanda, registered under Delivery Hero (Thailand) Co Ltd, had revenue of 3.628 billion baht in 2022 and a loss of 3.255 million baht. In 2023, Foodpanda’s revenue increased slightly to 3.843 billion baht with losses decreasing to 522 million baht.
Robinhood, registered under Purple Ventures Co Ltd in the SCBX group, had a revenue of 538 million baht in 2022 and a loss of 1.986 billion baht. In 2023, its revenue increased to 724 million baht but losses surged to 2.155 billion baht.
Over the past four years since its launch, Purple Ventures has accumulated losses of over 5.565 billion baht.
Recently, SCBX Pcl announced the termination of the Robinhood app, effective from 8pm, July 31.
Thana Thienachariya, CEO of Purple Ventures Co Ltd, said that while he regrets the closure of the Robinhood brand due to his attachment, he understands SCBX's decision to terminate the service due to concerns about the financial performance.
Robinhood is not the first food delivery service to shut down. Previously, “GET” ceased operations on September 15, 2020, to transition into the Gojek app, which operated until July 31, 2021, before being officially taken over by AirAsia Digital, a leading e-commerce and mobile payment platform in ASEAN.
Assistant Professor Buppa Lapawattnaphun, a branding and marketing communications expert at the University of the Thai Chamber of Commerce, analysed the competition in the food delivery business and the termination of the Robinhood service. She noted that Robinhood, a Thai delivery app created to support small restaurants and the public without charging fees, became a hero during the crisis. However, as the Covid-19 situation improved and consumer behaviour changed, Robinhood faced multiple challenges, including late market entry and intense competition. Competitors offered attractive promotions and services, consistently battling for consumer spending. High costs and a lack of clear strategies for differentiation and customer retention led to Robinhood's downfall, she said.
“The closure of Robinhood reflects the challenges in the food delivery business. Intense competition, high costs and the need for clear strategies are crucial factors for operators to consider,” Buppa said.
Despite high competition, the food delivery business has growth potential, thanks to its ability to leverage existing customer data. Insights from this data are valuable, allowing key market players to continue operations, even with modest profits. In the future, successful operators will be those who understand customer behaviour, offer diverse services, and create clear differentiation, Buppa said.
