The online food ordering group Food Panda has ended its operation in Vietnam, citing financial difficulties though it still describes the country as a potential market.
A source from the company told news website VnExpress that it has sent a notice to its partners and will stop all business activities in Vietnam in the next five days, including shutting down the website foodpanda.vn.
Food Panda, a subsidiary of German-owned Rocket Internet which manages a number of e-commerce brands in Vietnam such as Zalora, Lazada and Easy Taxi, opened an office in Ho Chi Minh City in 2012. It is now a popular food delivery service in 42 countries, including
Singapore, Thailand, Malaysia and Indonesia in Southeast Asia.
In Vietnam, the company has to face a tough competition against local rivals such as Vietnammm and Eat.vn.
The company’s representative said the decision came after Rocket Internet reevaluated its operations in several countries, including Vietnam.
“We have assessed that Vietnam is a potential market with good growth. But our current strategy is to focus on markets that are making profits. If we maintain the business in Vietnam, we have to invest more,” the source said, adding that there’s still a chance the service will return after a few years.
Market for deep pockets
Beyeu.com, a Vietnamese e-commerce website selling babies’ foods and accessories, last month also announced to put an end to its two-year business.
It posted a notice saying that “E-commerce requires lots of money. Many companies will decide to stop burning. Good luck to the rest who are still trying.”
An e-commerce director of a big company in Vietnam, who did not want to be named, told VnExpress that the closing of an e-commerce project is not strange and does not have a very big impact on the rest of the market.
The director said the main challenge in the industry is that all the projects are having to spend a lot of money on marketing.
He said e-commerce in Vietnam has only accounted for a very small part of the retail market, so there’s still a lot of room for expansion.
Those working in the industry should not be pessimistic, he said, while also noted that investors should have deep pockets.