After 13 years in Thailand, Foodpanda is making a sudden exit. Once the pioneer of food delivery, it’s now being overtaken by newer players—like ShopeeFood, which only showed up four years ago. Amongst operational decisions, PR controversies, and market dynamics, what exactly was it that led to its decline?
In this episode, we unpack Foodpanda’s quiet (and rather sad) exit, the competitive nature of Thailand’s food delivery landscape, and what this means for Delivery Hero’s future in Southeast Asia.
Also available on Spotify and Apple Podcast
Featured materials:
AsiaFood Delivery Platforms In Southeast Asia 5.0
Food delivery platforms in Southeast Asia 2021
China’s Didi and Meituan clash in Brazil’s food delivery market| Impulso E114
My thoughts on Foodpanda’s exit from Thailand
[AI-generated Transcript]
[00:00:00] Sabrina: Hi everyone and welcome to the Impulsive Podcast by Momentum Works. On today’s episode, we’re going to be talking about something that happened recently. I think it happened two, three weeks ago.
[00:00:10] Jianggan: Everything we talk about, something that happened,
[00:00:12] Sabrina: many point of course. How will we talk about things that don’t happen recently?
[00:00:15] Sabrina: So today we’re gonna be talking about food Panda exiting Thailand. So a couple weeks ago there was sort of a notification that would pop up when you open the Food Pan app in Thailand. I won’t say China in Thailand. So it’s a very cute. Ba crying saying, who’s papa? Papa is the penda from mascot. The mascot of the penda.
[00:00:35] Sabrina: Very cute. So I think, uh, we’ll add the image here, but yeah, so it’s just an image of Baba crying, right? Saying thank you for the journey and that they will be leaving Thailand or their services would end in Thailand on 23rd May. But it’s interesting, right? ’cause um, obviously when we did our food delivery report in Southeast Asia report this year, food pandas market share was about 5%.
[00:00:57] Sabrina: In Thailand. So it was the first time
[00:00:58] Jianggan: actually, uh, shop food. [00:01:00] I, I overtake, uh, overtook food, Panda food, Panda, yeah.
[00:01:03] Sabrina: And then of course, now food Panda has left Thailand, so they are only operating in Singapore, Malaysia, and the Philippines, where they are the second player, second largest player by Pakistan, also operating
[00:01:13] Jianggan: in, uh, Bangladesh, Pakistan and Taiwan.
[00:01:17] Sabrina: Hong, yeah. Uh, uh, I mean in, in Southeast Asia it’s mostly Singapore, Malaysia, and the Philippines. Yes,
[00:01:23] Phyllis: the Shopee before enter a lot later than foot pan in Thailand much
[00:01:27] Sabrina: later.
[00:01:27] Phyllis: Foot
[00:01:28] Jianggan: Pan was actually one of the first, if not
[00:01:30] Sabrina: first, they were one of the first few, right?
[00:01:32] Jianggan: I think it was the first mainstream food delivery player in, uh, in Southeast Asia.
[00:01:36] Jianggan: It started in 2012 and entered Thailand in 2012.
Mm-hmm. Oh yeah.
[00:01:41] Jianggan: So, so basically has been operating for like 13 years. And, uh, initially I, I think now if you look at Highland, um, the leading players are grab and lineman. But both started much later. So lineman started in 2016, but only really got, uh, got, got, got a bit of scale in 2019 and grab [00:02:00] started in 2018 after buying Uber’s, um, operations in Southeast Asia.
[00:02:04] Jianggan: So, so the, so panel was there much earlier.
[00:02:06] Sabrina: It’s interesting ’cause Thailand is also one of the more. Compared to the other Southeast Asian markets, Thailand is also one of the more competitive ones, right?
[00:02:13] Jianggan: It’s one of the largest markets. I mean, it’s, uh, I think in terms of, uh, the absolute GMV, it’s, uh, it’s behind Indonesia.
[00:02:19] Jianggan: It’s the second largest market in Southeast Asia,
[00:02:21] Sabrina: and a lot more players. So, I mean, Indonesia is the biggest. They have three players. Thailand, I mean, this year they have a lot less, there were a lot of exits already.
[00:02:28] Jianggan: So yes, before this year, uh, Robin Hood exited, uh, which was, uh, one player backed by, uh, a major local bank.
[00:02:35] Jianggan: Mm-hmm. So, and, and Foot Pan has sort of, uh, dropped the market share dropped, I think when, when we first did our, uh, food delivery report, it was, uh, I think 2021 and back then food Pan’s market share was above 20%. Above
[00:02:50] Sabrina: 20%. But every
[00:02:50] Jianggan: year we look at it, it was dropped. So it was kind of,
[00:02:54] Phyllis: it’s kind
[00:02:54] Jianggan: of sad.
[00:02:54] Jianggan: Right. So that was the, the original Food Panda. I mean, if you compare to what you see now, it
[00:02:59] Phyllis: is not [00:03:00] cute at all. I mean, the one, the one now
[00:03:03] Sabrina: is so much
[00:03:03] Phyllis: cuter.
[00:03:04] Sabrina: Yeah, yeah. Yeah. From a complete like visual perspective. I think that’s why the announcement is cute as well. Like people would, it’s not just, it’s not just a text, right?
[00:03:13] Sabrina: It’s like there’s the cute panda crying and like bowing. Lots
[00:03:16] Jianggan: of people resonated, right? They said okay, it’s kind of sad. Right? So I
[00:03:19] Phyllis: was gonna say that uh, the general public sentiment about food panda living, Thailand’s, like people are sad about it. And I think also because like the mascot, the ma Yeah.
[00:03:26] Phyllis: The mascot is very sad.
[00:03:27] Sabrina: Can you imagine if they use this mascot, like this mascot cry? I don’t think people, it will look creepy. It’ll look creepy.
[00:03:33] Jianggan: So, so, so, so this is the, the earlier website of Ban when you first launched in 2012, and it was primarily type in Southeast Asia. And you remember that at some time they had operation in Indonesia as well?
[00:03:44] Jianggan: Yes. So, so it was a startup. And uh, of course back then, I mean, people, people’s concern was trying to get operations up and running and, uh, I don’t think they put too much attention into making the panel acute or whatever. That’s something which came later. It came up, but it also showed [00:04:00] the, the, the, the evolution of the company.
[00:04:02] Jianggan: Right. As you can see, initially, they had actually bigger dreams. Right? Wow. In addition to, I mean, the, the company was incubated by Rocket Internet. So, uh, in addition to Southeast Asia, they also expanded to Africa, uh, Russia, Russia, Europe, including Russia and, and Lucky America. So that was, I mean, 2012 was the early days mobile internet.
[00:04:23] Sabrina: How long were they in all these markets that they expanded in?
[00:04:26] Jianggan: Can’t remember. I, I can’t remember about the rest of the market. But, uh, for Indonesia, it was, uh, exited 20 15, 20 16. ’cause back then, uh, when Gojek started doing food delivery and the food panel very quickly realized that they could not compete against Goch.
[00:04:41] Jianggan: Yeah.
[00:04:42] Sabrina: So they went overseas,
[00:04:44] Jianggan: I think for Vietnam was also, uh, a market which they exited fairly early and they sold, uh, that to another company. They sold operation to. The company.
[00:04:55] Sabrina: It’s interesting. So they left Vietnam and Indonesia pretty early because I think there were like, [00:05:00] obviously other competitors and they realized that it wasn’t a market they wanted to fight in.
[00:05:03] Jianggan: So if you look at how, um, value proposition, uh, delivery hero, no. Rather the investor proposition of delivery hero. So, so what they try to do is that they want to become market number one in multiple markets. Mm-hmm. And if there are any markets where they can’t realistically become marketable, number one, they would prefer to shut down that market.
[00:05:22] Jianggan: Because, because this is the platform which links three parties, right? The rider, the merchants, as well as the, the consumers. So there’s huge network effect.
[00:05:30] Sabrina: Yeah. You really need to have the volume. Yeah. So I guess then it, it makes sense that now they’re living Thailand, because in Thailand they’re pretty small.
[00:05:37] Sabrina: And even Shoppy food, which used to be smaller than them, has kind of taken over. And of course, I guess
[00:05:44] Jianggan: the, the. The issue is that, uh, I mean Shopee, they, they are not promoting Shopify alone. Mm. They are on a shopee platform, which means that, uh, the users already there. They just need to convert part of the users into food delivery users.
[00:05:57] Jianggan: That’s complex push should
[00:05:58] Phyllis: be easier than getting completely new [00:06:00] users onto that. Yeah, exactly. So,
[00:06:01] Jianggan: so, so if you, if you want to, um, compete for users with a, a standalone value proposition with a small market share, it’s gonna be very expensive.
[00:06:08] Sabrina: Mm. I guess that’s why like grab is leading right? ’cause like we were talking about it earlier, I don’t even have the food pan diet.
[00:06:13] Sabrina: Yeah. ’cause
[00:06:14] Jianggan: you’re lazy.
[00:06:15] Sabrina: No, but why? What I need the price difference doesn’t justify is price difference having download, I don’t think there’s a price difference. For some merchants there
[00:06:22] Phyllis: is actually a price difference for food bender. Like food banner is cheaper than Grab, but we were just discussing earlier, Sabrina doesn’t have food Bender at all because we all use grab like for ride hailing.
[00:06:30] Phyllis: Yeah. I use Grab for a lot more things and so it makes more sense for her to use for, for food delivery because she already uses it for Right hailing.
[00:06:39] Sabrina: Yeah.
Mm-hmm.
[00:06:40] Sabrina: I write, download, be besides the Cube, be. Motivation
[00:06:50] Jianggan: why it looks is cute.
[00:06:51] Sabrina: Because, no, she also feels sad after seeing the crying panda. You’re like, well,
[00:06:55] Phyllis: little, little, like in Singapore, become more expensive car. So I must, [00:07:00] can you
[00:07:02] Sabrina: eat a flying deliver? Eat a online? Yeah.
Yeah.
[00:07:05] Jianggan: Oh, Deliveroo, did you hear that Deliveroo got, uh, offered, uh, or buy out from the ash, right?
[00:07:11] Jianggan: Yeah. Think kind of makes sense for DoorDash to, to, to expand by acquisition out. ’cause in terms of culture, I, I think, I think deliver roots is definitely the Western. So, so, so we, you had a lot of discussions with people about maybe Myan would acquire a company outside, but, uh, I think to, for any existing company in, in the foreign market to adjust to culture or vice versa Oh, I think would be pretty hard.
[00:07:35] Sabrina: But technically that has been delivery hero strategy, right? They’ve been acquiring a bunch of different players in different markets and Yes. Um,
[00:07:42] Jianggan: it’s
[00:07:42] Sabrina: still a challenge. Even then.
[00:07:44] Jianggan: I think the delivery hero is that, uh, they are in really a lot of markets, right? I mean, the, the, the Hunger Station is in, uh, Saudi Arabia and Taba is in, uh, UAE Dubai.
[00:07:56] Jianggan: Mm-hmm. And the largest subsidiary Bain is in Korea. Korea. So basically [00:08:00] they acquire all these companies and, uh, and. Uh, and try to centralize the operations. But these markets are very different from each other. Yes. So, and each, and I would think that if you don’t have a competition, this market, you can probably slowly figure out how to make a profit for market.
[00:08:16] Jianggan: But the problem is that in Southeast Asia, they have competition in terms of grab, in terms of line. And now in UA shopping, in
[00:08:22] Sabrina: E they have, but in UAE they have, they’re gonna get competition as well. Right. I mean, Milton is coming in and all.
[00:08:29] Jianggan: And in Korea. So they have coupon, which is a local player, very aggressive.
[00:08:34] Jianggan: And uh, and the synergy between eCommerce and food delivery is huge if somebody can crack that, right?
[00:08:38] Sabrina: Mm-hmm. So that’s the thing. So obviously Delivery Hero strategy was to acquire a bunch of different, um, players in different regions. Mm-hmm. And let the local team kind of, I guess they do let the local team.
[00:08:52] Jianggan: They do, they do run. What’s
[00:08:53] Sabrina: on happening run the operations is happening on the ground.
[00:08:56] Jianggan: They do. They do, but uh, the, the, the, the problem is that [00:09:00] you have a few markets where, which are profitable. Mm-hmm. You have a lot more markets which are not profitable. Mm-hmm. So the question is that it naturally becomes the profitable markets are subsidizing the non-profitable markets.
[00:09:10] Jianggan: And, uh, and sometimes we, we, we make decisions and us need to, to balance. Okay. Which decisions should be made at the central level? Mm. Which decisions should be made at the regional level and which decisions, uh, should be made at local level. So, and even within the country, there are different cities. Mm.
[00:09:27] Jianggan: So it’s pretty, I mean, it’s actually, I mean, it’s very local business. It’s very city business and try to like, you know, have a global conglomerate and it’s, um. I think it was a viable strategy. ’cause back then we tried to expand that. I mean, you really don’t have another choice. Mm-hmm. Um, but, uh, but of, obviously in terms of, uh, operational agility and if you have a, a strong local competitor who’s well funded and uh, and, and who has the skill locally, it’s pretty hard to compete.
[00:09:55] Jianggan: Mm-hmm.
[00:09:55] Sabrina: It’s very, very tough, I feel, to be in the food delivery business now. Yeah, of course. Because it’s [00:10:00] not just like local competitors, no matter what region you’re in. Right. It’s not just local competitors, but s and when like. Like international competitors could come in as well if they see like, so that’s what we are seeing with, um, with Kita in the UAE.
[00:10:12] Sabrina: Right? They see like, oh, it’s a good market. I’m going to enter. And then in Latin, no,
[00:10:17] Jianggan: I don’t think it’s that straightforward. I mean, it’s a good, I mean that’s, that’s a lot. It’s a good market, um, considerations
[00:10:22] Sabrina: behind, but you see, they, they, when they want to enter, anyone can, not anyone can enter, but. There will be competitors coming either from like overseas or locally.
[00:10:32] Phyllis: I think it’s not just that. I think it’s also like, it’s not just food delivery, like companies that are going to food delivery. It’s like, yeah,
[00:10:39] Sabrina: it’s like, like Titi is going and they already have like the
[00:10:42] Phyllis: consumer base, which will be easier to transfer. I
[00:10:47] Jianggan: would think that there’s a tremendous amount of synergy, uh, between righthand, food delivery and e-commerce.
[00:10:52] Jianggan: Yes. So you see that synergy between food delivery and, um, and righthand playing out with grab. And you see the same thing [00:11:00] play out with Dili in Mexico. ’cause it is one of the largest delivery players in Mexico. And, uh, you Yeah. Trying
[00:11:05] Sabrina: it out in Latin as well now.
[00:11:07] Jianggan: Yes. And, and, and you do see that, uh, um, uh, in, in, in China sort of is going aggressively into.
[00:11:14] Jianggan: Uh, e-commerce. Mm-hmm. And that puts lots of threat on, on jd, which is now coming back and doing the food delivery delivery. Yeah. So, so, so triangle.
[00:11:23] Sabrina: They’re all linked. They’re all, yeah, they’re all linked. But there’s different players in each, like you can’t just do food delivery
[00:11:29] Jianggan: only now. You can’t do, yeah.
[00:11:31] Jianggan: I think, um. I think just for deliver alone, uh, in many markets would be a theme. Valuable position. Yeah. So it’s a good use case, but for this use case, you probably need to build more value on top of the, the user base, the merchant base, as well as the, the fulfillment network base.
[00:11:44] Sabrina: And it’s also something where like, it’s very operational heavy, right?
[00:11:47] Sabrina: So you need, like, you need the scale, you need the volume. You need people on the ground that knows the local like landscape to be able to. Help improve the operations or speed up the improve efficiency for these operations [00:12:00] so that you can become more profitable.
[00:12:01] Jianggan: So,
[00:12:02] Sabrina: so it’s quite hard to, it’s not something that can be expanded very quickly either.
[00:12:05] Jianggan: No, no, no. It’s not, it’s not, I think, I think that’s the reason why, um, my turn, um, is very, very cautious for expansion and that, I think it’s also the reason why deliver win with acquisition route rather than like a building from scratch route. I mean, uh, if you look at foot panel now after exit of, uh. Of Thailand.
[00:12:22] Jianggan: What, what other markets do they have there in Southeast Asia? Singapore. Singapore, Singapore,
[00:12:25] Sabrina: Malaysia, Indonesia, no, no, no, no. Singapore, Malaysia, Philippines.
[00:12:29] Jianggan: Yes. In all these markets, I think, uh, when we did our first, we did report and uh, the market share would relatively on par with Grab, but I think in all these markets, progressively Grab is gaining more market share versus them.
[00:12:41] Jianggan: And footprint also has Hong Kong, which, uh, they are.
[00:12:45] Sabrina: They have a pretty big market share in Hong Kong.
[00:12:47] Jianggan: They used to be the biggest and, uh, I think now, I mean wean in terms of, at least in terms of number of orders and has overtaken them. Uh, Taiwan is a good market.
[00:12:56] Sabrina: Taiwan was a market they tried to sell though.
[00:12:58] Sabrina: They tried to sell. That’s interesting. They [00:13:00] tried to sell, it was one their bigger markets and they had a pretty big market share.
[00:13:04] Jianggan: They had, they a good market share. They, they, they were leading and, uh, I, I was, I was arguing to lots of people and people thought I was joking. I was not joking that, that they should probably, I mean, double down.
[00:13:14] Jianggan: On on Taiwan. Taiwan. That’s a market which first, um, is bigger in terms of, I mean, this economy is bigger than Thailand and Malaysia and, uh, you will probably never face the threat of wan because of the political reasons.
[00:13:25] Phyllis: Mm-hmm. But Uber is leading our, in Taiwan. I think
[00:13:28] Sabrina: it’s still,
[00:13:29] Phyllis: it’s quite similar, like
[00:13:30] Jianggan: the market share 55.
[00:13:31] Jianggan: Uber 45 is very, very similar. So they
[00:13:35] Sabrina: tried to sell
[00:13:35] Phyllis: to
[00:13:35] Sabrina: Uber,
[00:13:36] Phyllis: but also
[00:13:36] Sabrina: the same thing. So
[00:13:37] Phyllis: the same thing happened to me. ’cause I just came back from Taiwan. Right? So in Taiwan I took the Uber everywhere. So I want to order food delivery. But you just order Uber. I just order some Uber.
[00:13:45] Jianggan: When you traveling?
[00:13:46] Jianggan: Taiwan, why would you order? I mean, it’s so many nice places to go and
[00:13:50] Phyllis: question. No, the only other Uber ride was after I came back, like late at night. So it was like at at three, 4:00 AM So I just wanted a quick fix. Oh, [00:14:00]
[00:14:00] Sabrina: usually we just, was it quick?
[00:14:01] Phyllis: Yeah. Yeah. It was actually not bad. Not bad.
[00:14:04] Sabrina: Well, we are not completely sober and not, not in the right to walk down.
[00:14:11] Jianggan: I’m not sure we can last until like two, 2:00 AM on 5:00 AM So you have lots of energy.
[00:14:16] Sabrina: So it’s quite interesting to see like what’s happening in the food delivery scene now, not just in Southeast Asia. Right. Even in latam. You know, is this is something that we talk about in a lot of other podcasts. Um, link that will be linked in the show notes down below.
[00:14:28] Sabrina: I think.
[00:14:29] Jianggan: I think also moving forwards, uh, how we turn interest, like a quick, quick commerce and how, uh, because we also see lots of thinking about how AI will transform, transform this and uh, and people say, okay, it’s, it is a hard delivery piece. It’s how, how we do ai, but there’s lot of thinking behind.
[00:14:45] Jianggan: It’s something that, that is definitely worth watching for the next few years. Yeah.
[00:14:49] Sabrina: So we will continue updating you guys, but if you guys have like any specific topics that you would ever like us to cover, you can also just feel free to leave them down in the comments below
[00:15:00] and we’ll respond to you. So thank you guys for tuning into another episode of the I Impulse podcast.
[00:15:04] Sabrina: We hope that you guys enjoyed today’s episode. Um, if you did, do give us a thumbs up as well as subscribe to our channel to stay up to date on the latest happenings and trends in tech, food delivery, new retail, and the broader digital economy. Thank you and bye-bye bye.
