Foodpanda – relentlessly marching its way across Southeast Asia, gobbling up rival food delivery businesses and creating monopolies – has shocked the online community by closing its Vietnam business.
According to a report in online business news website Deal Street Asia the Rocket-Internet backed company has told its Vietnamese partners the operation will close on Wednesday after three years.
“Through this notice, we would like to inform you that our company will terminate the business in Vietnam due to the difficulties in financial situation,” Foodpanda said in the letter.
Deal Street Asia’s Vietnam-based writer was unable to reach Foodpanda Vietnam staff for further comment.
One of the possible reasons for the market exit is that Foodpanda was a latecomer to the sector with the original, well-liked local service Vietnammm launched as long as five years ago and collaring the expat market which has the disposable income. Other rivals included Eat.vn and Deliverynow.vn.
Furthermore, Foodpanda’s business model is to attain market dominance by buying out rivals, thus gaining insulation from poor customer service, slow delivery times and other faults – the exact situation in Malaysia which has now left it with brand reputation issues.
Deal Street Asia says experts say Foodpanda’s business model is not relevant to Vietnamese consumers, where the younger demographic prefer to eat out and local food outlets offer their own delivery service. Others said Foodpanda had struggled with its communications strategy, which was not helped by changing its brand name within a year of launching there.
Meanwhile, in India Foodpanda is in trouble over alleged fake listings, non-payment of money to restaurants, failure to refund customers for undelivered orders and corporate governance issues, according to website e27.co.