BANGKOK – Robinhood, once hailed as a rising star in Thailand’s food delivery sector during the pandemic, has succumbed to the intense pressures of a highly competitive market. The company, which secured funding from Siam Commercial Bank, has announced its closure effective July 31, citing cumulative losses exceeding 5 billion baht ($140 million).
Founded in 2020, Robinhood initially reported losses amounting to 87 million baht for the year. Subsequent years saw escalating financial challenges, with Commerce Ministry data revealing staggering losses: 1.3 billion baht in 2021, 1.9 billion baht in 2022, and 2.1 billion baht in 2023.
“The Robinhood case underscores the profitability challenges within the food delivery sector, despite its rapid growth,” commented an analyst from Kasikorn Research Center.
The lockdowns spurred a surge in food delivery app development, driving market valuation from 50 billion baht in 2020 to 87 billion baht by 2023, according to Kasikorn Research. However, the forecasted 1% decline in 2024 marks the market’s first contraction, signaling tougher times ahead as consumer behaviors shift back to dining out in a post-pandemic environment.
Today, surviving players like Grab Food, commanding 47% of the market, and LINEMAN with 36%, continue to grapple with narrow profit margins amid fierce competition. Both have incurred significant cumulative losses, although their substantial market shares provide a revenue buffer.
Grab Food, for instance, navigated from a 284 million baht loss in 2020 to a 1.3 billion baht profit in 2023 after strategic pivots, including the introduction of the Exclusivity sub-brand catering to high-spending customers. Conversely, LINEMAN, despite cutting losses to 253 million baht in 2023, faces ongoing challenges in adapting its price-cutting strategies amidst fluctuating consumer demands.
“Consumer habits have reverted to pre-lockdown norms, reducing reliance on food delivery apps,” noted an analyst from Asia Plus Securities. “This shift has further intensified the price competition among remaining players.”
Looking ahead, industry experts anticipate further market consolidation as weaker competitors exit, leaving a smaller number of major players to dominate amidst persistent price pressures.
Southeast Asia’s broader food delivery market, meanwhile, remains robust, with a projected gross market value reaching $17.1 billion in 2023. Thailand ranks second with a market value of $3.7 billion, reflecting the sector’s strategic importance in the region’s economic landscape.