With coronavirus pandemic reaching its endemic phase, South Korea’s food delivery platforms may be losing their growth momentum. But Thailand is fast rising as a market filled with new business opportunities for e-commerce startups.
Located in the heart of Southeast Asia, the country’s food delivery market is thriving with a surge in smartphone users and one of the leading players is Line Man Wongnai, the popular food delivery platform operated under Line Corp.
“The fact that it took only five years for Thailand to form a food e-commerce market is notable considering it took 10 years for South Korea," said Chung In-young, chief financial officer of Line Man Wongnai, in a recent interview with The Korea Herald.
Chung attributed such transition into platform business to a “mobile-first” strategy within Thailand that leapfrogged other forms of connectivity like web or PC internet.
Yet to be fully infiltrated with global franchise brands, the country also has a wide range of mom-and-pop food stores, offering various meal options for consumers. Another plus for Thailand is that it is free from rider shortages because the vast majority of the population uses scooters for personal transportation.
Chung said Line Man Wongnai has been more successful in localizing its services for Thai people than Uber Eats and other global behemoths.
“Having respect for the mom-and-pop food stores and supermarkets here, we are cooperating with the government to ensure fair treatment for riders and shop owners. The company has also improved user convenience by offering grocery deliveries and taxi-hailing services that are showing burgeoning demand.”
Line Man’s merger with Wongnai, a local restaurant review app operator in Thailand, in 2020 was one of the company’s hyper-localization strategies to ease its way into the local market. Line Man started off as a delivery platform there in 2016.
“Our goal is to become the number one “local champion” in the e-commerce market in Thailand creating values for our local users and business partners – in some way, similar to Naver,” Chung said. “But Naver only provides an online restaurant review service, not food delivery.”
Chung stressed that unlike Naver or other e-commerce platforms, Line Man Wongnai is also pushing offline business in a move to create a complete ecosystem for the stakeholders.
For instance, the company runs a retail Point of Sale machine business, offering restaurants a way to keep track of their sales.
Aside from the existing services, the company is planning to launch a low-interest loan service for small and medium-sized stores.
With its business expansion, Line Man Wongnai is gearing up for a market debut in Thailand.
“IPO markets worldwide remain mostly frozen, but situation is different for Thailand,” said Chung. “The country is one of the emerging markets in Southeast Asia with high economic growth rates that are far from geopolitical risks (like Russia’s invasion of Ukraine).”
Backed by the Government of Singapore Investment Corporation, a state-run wealth fund in Singapore that manages its foreign assets, the company raised a total of $375 million in investment including the latest series B funding. Chung said it is the first time the GIC invested in a startup in Thailand.
The company has monthly active users of 10 million and aims to expand its consumer base with Line, the largest shareholder of Line Man Wongnai, which offers mobile messaging service to most of the 50 million smartphone users.
After joining Line Corp. in 2018, Chung is serving as CFO at Line Man Wongnai since 2020. Chung led the merger between Line Man and Wongnai as the Thailand lead of Global Investment at Line Corp.