Woowa Brothers, a South Korean developer of software applications which owns the food delivery brand Baemin Vietnam, has decided to shut down the nine-year-old Vietnammm app by the end of January 2021 amid fierce competition from regional players such as Grab and Gojek.
Nguyen Trung Thanh, chief operating officer of Baemin Vietnam, says the food delivery app will be discontinued as part of efforts to streamline the company’s operations, adding that Vietnammm staff will take on new roles in the Baemin network.
The app was founded in 2011 as the Vietnamese unit of Dutch company Takeaway.com specializing in online food ordering and home delivery, to become one of the pioneers in Vietnam’s food delivery sector. Four years later, it took over the Vietnam operations of Foodpanda, which was then part of German giant Delivery Hero.
Foodpanda was set up in mid-2012 and by mid-2014 provided food delivery services in Vietnam’s five biggest cities including Hanoi capital and Ho Chi Minh City. However, Delivery Hero exited the local market after discontinuing Foodpanda and transferring it to the Vietnammm app.
The German company, however, announced its return to Vietnam in late 2019, saying it would acquire an 87% stake in Woowa Brothers from existing investors, such as Goldman Sachs and Singaporean fund GIC.
South Korea’s antitrust regulator is likely to give conditional approval to the German firm’s US$4 billion deal to acquire Woowa, according to published reports.
The reports, citing Delivery Hero officials in South Korea, said the Korea Fair Trade Commission had informed them that it would grant permission for the deal on the condition that the German company sells Yogiyo – its food delivery affiliate in the country. The regulator is scheduled to decide on the deal on December 9, according to the newspaper.
Woowa’s Baemin made its debut in Vietnam in May 2019 and is currently operating just in Hanoi and Ho Chi Minh City, focusing on serving inner districts, where online shopping and food delivery are very popular.
At present, the biggest players in the country’s food delivery market are Grab’s GrabFood, Now.vn backed by the SEA Group, a major internet platform in Southeast Asia and Taiwan, and Gojek’s GoFood.
The three are spending aggressively to lure merchants and consumers. Grab and its main competitor Gojek are the top ride-hailing players in Vietnam. Grab is allocating another US$500 million for expansion in the country between 2020 and 2025, with a focus on transport, food delivery and internet-based payments.
Local consumers can now access GrabFood from the homepages of e-commerce platform Lazada’s app and website, while Grab users can access Lazada’s platform through links embedded in those web banners. These are all part of the latest partnership between Grab Vietnam and Lazada Vietnam.
According to the latest e-Conomy Southeast Asia report by Google, Temasek and Bain & Company, Vietnam saw the largest rise in new digital consumers in 2020, with its internet economy logging a 16% growth from last year.