Sharing with Dan Tri newspaper reporters, Baemin's spokesperson said that Baemin's decision to leave Vietnam "was motivated by the difficult economic situation globally, as well as the fierce competition in the local market."
In addition, to complete the mission of creating optimal customer experiences, Delivery Hero - the parent company of Baemin Vietnam - has made a strategic decision to focus on and prioritize markets where the group's brands are leading and have the potential to lead.
Currently, the priority of this unit in the coming weeks is to care for, support and fulfill its obligations and responsibilities to all company employees, driver partners and restaurant partners.
"All staff are also trying their best to close the memorable journey at Baemin," said the representative.
In Vietnam, Baemin started its business in 2019 after acquiring the food delivery app Vietnammm. In addition to food delivery, Baemin also has a grocery shopping service, online grocery store, and its own cosmetics brand.
Baemin is operated by Woowa Brothers Vietnam. This business is a joint venture between Woowa Brothers - the leading food delivery company in Korea and Delivery Hero - a German food delivery technology group.
In late September, Delivery Hero confirmed to Deal Street Asia about changing its business strategy in Vietnam.
"This change will reduce a large number of our staff. But this strategic decision is completely in line with the group's strategic direction and helps us to improve our organizational structure," said a representative of Delivery Hero.
Baemin's parent company said its goal is to streamline and optimize its apparatus to increase profits and develop sustainably in the long term.
At this time, Deal Street Asia reported that Baemin has reduced half of its staff in Vietnam.
Notice of suspension of operations sent by Baemin to app users on November 24 (Photo: Thu Thao).
The food delivery market is currently quite competitive. According to the latest report on the online food delivery market in leading markets in Southeast Asia by Momentum Works, total spending on food delivery services in 2022 in countries in this region reached $ 16.3 billion, up 5% after 2 years of delivery boom due to Covid-19.
The growth was mainly driven by regional food delivery markets including the Philippines (up $0.8 billion), Malaysia (up $0.6 billion) and Vietnam (up $0.3 billion).
With increasing pressure on profitability from investors, existing and new food delivery apps are continuing to cut back on promotions and subsidies for their food delivery services, while increasing competition based on service quality and other differentiators.
At the 2023 Food and Beverage Conference, Mr. Jinwoo Song - General Director of Baemin - shared that the online food delivery market in Vietnam is not new when it can meet the modern consumption trends of customers. However, businesses also have to face
"The recent growth of the online food delivery market in Vietnam is not new, as this market can meet modern consumer trends, which focus on convenience and time saving. However, businesses also face significant challenges, in which the shift in orientation from attracting customers, competing on promotions to profitability and sustainable development is the central theme."
However, a marketing expert said that Baemin has built a good brand, attracting users' attention but has not created a difference in products and services. Meanwhile, products, services, and the diversity of the restaurant system are the deciding factors in users' use of the food delivery application.
The 2022 report by market research firm Statista said the app will hold 12% market share in 2022, significantly lower than Grab's 45% and ShopeeFood's 41%.
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