Food delivery market heats up, weak competitors drop out

Having an estimated value of $33 million, the competition in the food delivery sector is as cutthroat as the ride-hailing market.

“One year ago, I used Delivery Now only. But there are many more choices now. I check Now, GrabFood, Lala and Loship and choose apps which offer higher discount rates,” Minh, an office worker, said.

Delivery Now, which changed its name to ‘Now’, is the biggest player. ‘Now’ was the first name mentioned by 20 students in HCMC who were asked about the food delivery services they used.

Now and Vietnammm are veteran service providers in the market, while GrabFood, Go-Food, Loship and Lala are the newcomers.

Backed by Scommerce Group, Lala began its operation in late 2017. As a member of Scommerce, analysts said Lala had great advantages as it could take full advantage of the Scommerce ecosystem, which includes nearly 10,000 shippers of AhaMove and 7,000 restaurants of iPOS.

In July, asked about the future of Lala, CEO Vu Hoang Tam said they had experience in developing technology startups. However, Lala disappeared in late 2018. The app with the name Lala: Food Delivery is no longer displayed on Google Play and App Store. Lala’s official fanpage has been shut down.

Users of fanpage Lala: Food Delivery Hanoi have complained the app is inaccessible. On lala.vn website, the feature allowing users to order food has disappeared. It has been replaced with general information about the app.

CafeF quoted its sources as saying that Lala is likely to change its business model from B2B2C (business to business to customer) to B2B (business to business), with the focus on business solutions for restaurants.

Though demand is increasing rapidly in large cities, the online food ordering market is not a lucrative business field. The profit expected from that field is not high, just 10-12 percent in favorable conditions.

Meanwhile, food delivery requires strict preservation conditions and rigorous delivery time, while food cannot be delivered together with other products such as footwear and clothes.

Before Lala, the market also witnessed the departure of another big player – FoodPanda.

Joining the Vietnamese market in 2012, Foodpanda had to sell its business division in the country to Vietnammm in 2015.

At that time, the CEO of Foodpanda, the world’s leading online food ordering group operating in 27 countries, said that Vietnam was a small market with few opportunities for long-term development.