Robinhood Food Delivery App to Shutter Operations in Thailand as Market Becomes Increasingly Competitive
Thailand's food delivery market has become increasingly competitive in recent years, with both local and international players vying for market share.
In a stark sign of the challenges facing Thailand's food delivery sector, Robinhood, a local player in the space, has announced its imminent closure, effective July 31st. The decision comes as the market becomes increasingly saturated, with consumers reverting to pre-pandemic dining habits and intensifying competition from well-funded rivals.
Robinhood, which rose to prominence during the COVID-19 lockdowns, has struggled to maintain its footing in the face of shifting consumer preferences and a crowded field of competitors. Despite securing funding from Siam Commercial Bank, the company has been unable to stem its losses, which have accumulated to over 5 billion baht ($140 million) since its inception.
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Asir Fatagar
A Saturated Market
Thailand's food delivery market has become increasingly competitive in recent years, with both local and international players vying for market share. Industry giants like Grab and Line Man Wongnai have established a strong presence, leveraging their financial resources and brand recognition to capture a significant portion of the market.
Grab, which leads the market with 12.7 billion baht in revenue in 2021, continues to grapple with profitability challenges. Line Man Wongnai, despite a recent 10 billion baht funding injection, faces high operational costs and reported losses of 3.4 billion baht in the same year.
Foodpanda, another major player, registered a staggering 4.7 billion baht loss in 2021, underscoring the financial strain on food delivery platforms in Thailand. These figures paint a sobering picture of an industry where growth no longer guarantees success.
Shifting Consumer Preferences
As Thailand has reopened following the pandemic, consumers have reverted to their pre-COVID dining habits, leading to a decline in delivery orders. The Kasikorn Research Center predicts a 0.6% contraction in the market value of food delivery businesses this year compared to 2022.
This shift in consumer behavior has had a direct impact on delivery drivers, the backbone of these platforms. Drivers report significant drops in earnings, with some seeing their daily income plummet from 2,000 baht to as low as 900 baht. The influx of new drivers has further intensified competition for available orders.
Consolidation on the Horizon
Industry experts believe that Thailand's food delivery market can only sustain three major players. Anantaporn Lapsakkarn, a senior researcher at Kasikorn Research Center, predicts that "at least one player may have to exit the market next year".
In response to these challenges, platforms are pivoting their strategies. Grab is focusing on profitability and diversifying its services to include financial products and customized delivery options. Line Man Wongnai is leveraging its connection to the popular Line messaging app to integrate with other digital services.
However, these efforts may not be enough to save Robinhood, which has succumbed to the intense competition and shifting market dynamics. The company's closure serves as a cautionary tale for food delivery platforms operating in a highly saturated and volatile market.
The last word
The shuttering of Robinhood in Thailand highlights the challenges facing the food delivery sector in the country. As consumers return to their pre-pandemic routines and competition intensifies, platforms must adapt their strategies to remain viable. The market's volatility suggests that further consolidation is likely, with only the most resilient and innovative players poised to survive in the long run.
For Robinhood, the closure marks the end of a chapter in Thailand's food delivery story. However, the lessons learned from its demise may serve as a blueprint for other players looking to navigate the complexities of this rapidly evolving industry. As the market continues to evolve, the ability to adapt to changing consumer preferences and maintain a competitive edge will be crucial for the survival and success of food delivery platforms in Thailand.