Tech-based food delivery companies lose foothold in Vietnam
Tech-based food delivery companies lose foothold in Vietnam
Many tech companies, espeically app-based food delivery services, are finding it difficult to maintain their market shares in Vietnam, with several being forced to scale down operations.
Tech-based food delivery firms in Vietnam are finding it difficult to right their business. Photo: Cong Trung / Tuoi Tre |
A rumor that South Korean food delivery giant Baemin fired dozens of employees before withdrawing from Vietnam recently spread across social media.
That rumor, however, proved to be untrue.
The firm is streamlining its workforce for restructuring and effective operation in the market as a means of battling competition and a challenging economic situation, according to a Baemin representative.
The Baemin food delivery platform was still operational as of Wednesday.
Over the past few years, staff cuts at tech companies have become the norm.
Ride-hailing service provider Grab, which owns GrabFood, has laid off employees in markets around the world in several rounds of cuts since 2020.
The most recent round of lay-offs in Vietnam took place in June.
Facing the same fate, e-commerce giant Shopee, which runs ShopeeFood, cut employees in hordes across Southeast Asia in 2022.
Tech group GoTo, which owns Gojek, also streamlined its workforce in November last year.
Many executives in charge of managing the Vietnames market for these firms lasted only a short time, including Nguyen Thai Hai Van at Grab Vietnam for just two years; Song Jinwoo at Baemin for nearly two years; and Le Diep Kieu Trang at Go-Viet, now known as Gojek, for a mere five months.
Food delivery services recorded massive profits during the COVID-19 pandemic due to skyrocketing demands, leading to an upsurge in hiring.
However, after the market normalized, customers began limiting their food budgets.
As a result, these food delivery service providers laid off workers in order to maintain operations and improve service quality.
In the global market, Foodpanda and Uber Eats have sacked a record high number of employees in several countries over the past few months.
High pressure on the food delivery industry comes from investors’ demands for profits, while customers typically choose providers based on promotions and discounts.
In developed countries such as the United States and South Korea, on-demand food delivery company Doordash and Baemin have existed for over 10 years.
They have played a key role in reshaping food delivery services and customer habits in these markets.
These famed food delivery platforms mostly say no to discounts to attract customers.
Instead, they focus on developing and upgrading technologies as well as building the subscription model to create a stable revenue and make the apps become part of consumers’ lifestyle.
In Vietnam, such food delivery service providers should focus on cooking instructions, cuisine tours, and subscriptions.
Many economic experts said that tech companies should make breakthroughs in their mindset of trading and creating long-term products.
Together with modern technology, the food delivery industry is expected to develop sustainably.
