South Korean unicorn to enter local food delivery market in 2019
The local food delivery market is ready to welcome South Korea's Woona Brothers, one of the rare startup unicorn s of the world.
“We have already researched the Vietnamese market and are now looking for partners to invest in the country. We will definitely be present in Vietnam in 2019,” said Seyoon Oh, vice chairman of Woona Brothers, at the startup event Vakance 2018 in last November.
Woona Brothers has just been listed among the world’s unicorn companies after receiving $320 million investment from big funds like the US’ Hillhouse Capital, Sequoia Capital, and Singapore’s GIC in last December, increasing the company’s value to $1 billion.
If entering Vietnam, Woona Brother is expected to be a serious competitor to GrabFood and Now.vn, which dominate the $33 million food delivery market after Lalamove left.
Despite high demand in urban areas, the local food delivery market is not a fertile ground for many firms because of low profit rates. A representative of a firm running in the segment stated that in favourable conditions, profit growth could reach 10-12 per cent. Food delivery requires preservation, swift delivery, and separate storage space from other kinds of goods like clothes.
As a result, in a fierce battlefield, it is unavoidable for weak players to keep dropping out. Before Lalamove, the market also saw the retirement of Foodpanda which decided to sell itself to local food delivery company Vietnammm.
Food delivery is seen as a “hot” segment in Vietnam with market value of $33 million, which is forecast to increase to $38 million in 2020, according to market research company Euromonitor. With the good prospects of the local market, competition is unavoidable. Furthermore, more and more players are expected to enter the market, heating up competition even further.