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BUSINESS REPORT

PHOTO: VIET TUAN
promotions are crucial to winning and
retaining market share. “This approach
has led to a scenario where consumers
Growing appetite
have become accustomed to attractive offers,
Online food delivery is becoming increasingly competitive so that price / promotions remain as the
in Vietnam as its potential heads ever-upwards. core factor in vendor selection,” said Mr.
Kurokawa. “In Vietnam, a robust business
| By LINH NGOC model is vital for profitability, but the preva-
lence of price-oriented consumers makes
devising such strategies challenging.”
fter more than four years in Vietnam, ground, with Grab and ShopeeFood ruling Mr. Christou agreed that fierce compe-
despite leaving a mark on many Viet- the market through regular investments. tition, characterized by extreme discounting,
A namese hearts with its “aqua blue Mr. Kengo Kurokawa, Founder and CEO of has created a challenging environment. “It
team” coloring the streets and with lovely market researchers Asia Plus Inc., said that has led some to perceive it as ‘unfertile’,
advertising campaigns, South Korean online despite being liked for its service, Baemin but I believe it’s more accurate to say it’s a
food delivery app Baemin officially bade couldn’t attract enough customers away market where brand loyalty is fluid and
farewell to the country on December 8. from the major players. “Making money in price sensitivity reigns supreme,” he added.
Its decision to leave Vietnam was down food delivery is hard due to the slim margins
to the difficult global economic situation and large investment to retain customers,” FACTORS IN SUCCESS
and the fierce competition that has emerged he added. “Seeing two big players continue Grab has been deliverying food and gro-
in the country, according to a company to dominate, it made the tough decision to ceries in Vietnam for five years and has
statement. “While Baemin’s departure not invest in Vietnam any further.” invested strongly in better understanding
evokes a sense of loss, it highlights a critical The recent economic slowdown and its customers. Through both periodical
lesson: brand image alone is insufficient rising prices also amplified Vietnamese market analysis and constant feedback
for success in fierce competition with a consumers’ price sensitivity, as they have from customers and partners, it knows
zero-loyalty consumer base,” said Mr. Peter become increasingly cautious about spend- what they look for and who needs a specific
Christou, General Manager of the World- ing and actively seek deals and promotions. product and when they need it, as well as
panel Division at Kantar Vietnam. In a market where loyalty hinges on who what else it has to do to satisfy them.
offers the best deals, failure to address a Thanks to tech innovation, it offers solutions,
HOT COMPETITION shift in behavior and be consistently price- features, and products that capture con-
It can’t be denied that Baemin’s friendly competitive will inevitably lead to an inabil- sumers’ daily needs and attract more orders.
image and engaging marketing resonated ity to attract and retain customers. “2023 has been a rigorous testing period
with Vietnamese consumers. It wasn’t While Vietnam’s online food delivery for food delivery,” a Grab representative
enough, however, to overcome the deeply market is considered to have substantial said. “To remain robust amid a challenging
entrenched ecosystems and superior oper- potential, fierce competition and high expec- economic climate, Grab has to identify
ational efficiency of competitors like Grab tations from consumers make many rec- what our advantages are and how to lever-
and ShopeeFood, according to Mr. Christou. ognize it’s not exactly “fertile ground”. age them as practically as possible.”
Similarly, Q&Me research pointed out According to Q&Me, Vietnamese consumers ShopeeFood, meanwhile, has recorded
that Baemin began delivering food in Viet- prioritize price, and service providers significant growth in online food delivery
nam in 2019 but it was always a tough play- acknowledge that competitive pricing and over recent years thanks to the benefits of

28 | VIETNAM ECONOMIC TIMES | JANUARY 2024 en.vneconomy.vn