Baemin Vietnam is allegedly reducing its scale and staff in Vietnam, pointing to the intense and unprofitable market conditions in a region brimming with high consumer expectations and fierce competition.
Baemin Vietnam, a joint venture between Delivery Hero and Woowa Brothers from South Korea, has commenced the process of reducing operational scale and cutting down staff, as reported by TechInAsia.
Cao Thi Ngoc Loan, interim CEO of Baemin Vietnam, said in an email witnessed to employees that, “Our decision to downsize our operations in Vietnam is not one that was taken lightly.”
Loan assumed the position of CEO following the resignation of Jinwoo Song last week. She added, “This decision has unfortunately been accelerated by the challenging food delivery environment in Vietnam, characterised by high incentivisation, driven both by intense competition and high consumer expectations.”
Until now, it remains unclear how many employees in Vietnam will be impacted by these employment reductions. The company has ceased operations in several locations including Thai Nguyen, Hoi An, and Bac Ninh.
This news surfaced just a day after Foodpanda, another brand under Delivery Hero, announced its decision to reduce staff across its markets in the Asia-Pacific region. Delivery Hero has confirmed that negotiations are underway to sell Foodpanda in several Southeast Asian markets.
According to Techinasia, the downsizing of Baemin Vietnam is perceived as a step towards a complete withdrawal from the region.
Niklas Östberg, co-founder and CEO of Delivery Hero, told Reuters in August that the company’s prospects in Asia were optimistic, except in Vietnam, where they believed the business operation was unlikely to ever be profitable.
In this market, Baemin Vietnam managed to differentiate itself from other food delivery companies by operating its own kitchens and adopting intriguing marketing strategies. They even established a Baemin Studio and a cosmetics brand, both of which received considerable acceptance.
According to a recent report from joint venture analyst firm, Momentum Works, Baemin held a 12 per cent market share in 2022, substantially trailing behind Grab, which held 45 per cent, and ShopeeFood with 41 per cent.
According to Loan, the dynamics of the food delivery sector in Vietnam, characterised by aggressive competition and elevated consumer expectations, have intensified.
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