GrabFood and ShopeeFood still have a significant lead in Vietnam, but conversations with restaurant owners point to a growing disaffection with them. Several owners told us that Grab and Shopee’s commission fee of 25-30% is too high for them to break even. They’re also unhappy with the giants’ heavy discounting strategy—a common tool used to acquire customers.
“When they offer promotions to customers, we have to pay 50% of the promotion, and Grab pays the other 50%,” said Diep Nguyen, who runs two cafes in Ho Chi Minh City. “If we want to be featured on a Grab promotion, that costs up to US$38 per week.”
In her experience, Grab is particularly pushy when it comes to promotions. The platform sends multiple emails and text messages every week asking her to sign up, in addition to the occasional phone call. “You have to be on these apps because everyone is. I just hope that it’s convenient for customers and that they remember our brand,” Nguyen said. Grab declined to comment, with a spokesperson saying the company is in its silent period ahead of releasing its quarterly results. SEA Group also declined to comment when contacted by us.
In the battle for domination, ShopeeFood started from a solid base through its NowFood acquisition, but the challenge now is to bring as many merchants as possible onto its platform to keep up with Grab, said Oliver Woods, founder of Beer Asia, a regional F&B strategy consultancy firm.
The Future of Food Delivery in Vietnam
“The food delivery market is going to become a price war. You saw it in Indonesia, where Grab was the challenger to Gojek, and they did insane discounts for customers—it was basically hand-to-hand combat at a vendor level,” Woods said.
And Grab’s position, while powerful, is not unassailable. “I think the risk is that they’re so greedy on cutting into margins that restaurant owners will decide to do something about it,” Woods added.
This presents an opportunity for smaller players to come into the market and provide restaurants with a better alternative. That’s already happening.Andale, one of these young independent outfits, first appeared following the shutdown of Vietnammm, one of Vietnam’s earliest food delivery players, in early 2021.
What is the significance of Grab, Shopee & Posh?
Launched in 2011, Vietnammm was popular among the expat communities in Hanoi and Ho Chi Minh City because it was English-first. In 2015, it acquired foodpanda’s Vietnam business for a reported US$500,000. And then, in 2019, Baemin bought Vietnammm before shutting it down in a bid to “streamline [its] operations”.
That’s when Andale saw an opportunity to enter the market. “My business partner had been working on a food delivery platform, and once Vietnammm closed their doors, we decided to start our own,” said Christopher Arizaga, co-founder of Andale. “Our initial market was western restaurants, and we launched a website that was a little more local than Grab and Shopee.” By that, Arizaga meant Andale didn’t cater to restaurant chains or large F&B corporations—the kind that are abundant on GrabFood and ShopeeFood. It restricted its clientele to independent, premium outlets.