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Food Delivery Surges, Small Restaurants Struggle Amid Economic Woes


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The online food delivery market in Thailand has surged, yet the challenging economy might force 50,000 to 100,000 small restaurants to close this year.

 

With approximately 700,000 restaurants, including mobile street vendors, Thailand's total food business is valued at 800 billion baht. Online food delivery services account for 15% of this sum.

 

Yod Chinsupakul, Chief Executive of Line Man Wongnai, reports a 10% growth in online food delivery over the past five months, with expectations of continued growth. Chinsupakul explains that food remains a necessity, less impacted by economic challenges, but notes a high turnover in the industry. About 50% of new food sellers close within their first year, with another 20-30% shutting down later.

 

On the Line Man Wongnai platform, 50,000 to 100,000 restaurants typically close annually, and this year might see even higher numbers, particularly affecting small eateries. The company's chief executive estimates that only half of the restaurants on its platform have fully embraced digital technology. The online food delivery market in Thailand is valued at 100 billion baht.

 

Business Solutions and Expansion

 

Line Man Wongnai seeks growth in business-to-business (B2B) solutions, especially in payment, merchant management, and point-of-sale systems for restaurants. The company recently signed a Memorandum of Understanding (MoU) with the Business Development Department to support food businesses with technology and online transition assistance.

 

Chinsupakul highlighted that successful food merchants using their platform have expanded to over 20 branches, utilising the company’s point-of-sale system and electronic menu.

 

Deputy Commerce Minister Napintorn Srisunpang noted that Thailand has over 300,000 food operators, 90% of which are small and medium-sized enterprises (SMEs). Under the MoU, the ministry aims to digitally train up to 500 Thai SELECT-certified food operators for the Line Man Wongnai platform. This certification guarantees the authentic taste of Thai food products.

 

Currently, 50,000 food operators have adopted the company's point-of-sale system, representing a potential market of 50% of all Thai restaurants. Line Man Wongnai plans to offer more financial services, potentially extending loans to merchants through partnerships such as with Line BK.

 

Chinsupakul confirmed that Line Man Wongnai is progressing well in business performance and plans for an initial public offering by the third quarter of 2025.

 

Picture courtesy: Peak Recruit

 

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-- 2024-06-21

 

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1 hour ago, Jingthing said:

So what else is new?

Isn't the restaurant business plagued with high failure rates pretty much everywhere?

Yes, it is. Especially in Thailand and countries with high tourism, as that always leads to that everyone think they can make it in the same line of business.

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next week there will be an announcement on how restaurants are doing great and how business is booming in restaurants in little off the beaten path in thailand... brain retching news every week...

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Prepared meal delivery services in Thailand are great. Get meals delivered every 4 days. High quality and good value. Prepared in a food prep facility, which is much cleaner than any restaurant kitchens. Just a couple of minutes to heat up the meals in the microwave and never get food poisoning anymore. Best thing ever to happen to the food delivery industry. 

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15 hours ago, Sticky Rice Balls said:

I guess some are just "lovin it" 🙂

 

Susauge and Egg muffin and a coupla hash browns (delivered) go good early morn in readyness for a heavy Sunday sesh !

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21 hours ago, MalcolmB said:

McDonald’s seem to go ok.

Except in that utopian state of California, U.S. of A..   I hear they are considering leaving that place. 

 

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10 hours ago, hotchilli said:

Only because it's fashionable to be seen eating in these fast food chains.

Is that all it takes? I've just passed 70 and I was wondering how to stay looking cool. 

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Once the promised Bird-Flu PandemicTM hits it will wipe out the rest of the small restaurants and businesses.  Delivery services will get 70% of the business volume, and drivers will still be among the working poor as corporations controlling the delivery services make bank and CEOs will roll in the dough.

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On 6/21/2024 at 11:46 AM, webfact said:

About 50% of new food sellers close within their first year, with another 20-30% shutting down later.

That seems normal.

 

I remember I heard once (I think from an expert) that some people open a restaurant and buy all new. They go bankrupt and sell with a big loss. The person who buys it has a better chance, because the initial investment is not so high. But many still fail, and sell, with more losses.

And then, when someone buys a restaurant which was sold twice already, then the price is about right to be able to stay in the business...

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9 hours ago, connda said:

Once the promised Bird-Flu PandemicTM hits it will wipe out the rest of the small restaurants and businesses.  Delivery services will get 70% of the business volume, and drivers will still be among the working poor as corporations controlling the delivery services make bank and CEOs will roll in the dough.

It's a takeover of small restaurants incognito 

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12 minutes ago, cracker1 said:

McDonalds is managed by professional well trained people, and that leads to success. 

Yes and top quality food served by highly trained chefs.

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20 hours ago, hotchilli said:

The sheer number of selfies posted showing your friends that you're in one of these establishments eating less than healthy food at exorbitant prices.

Same goes for Starbucks... it's all about the brand not the products

 

Nah, you just made that up. But it's repeating a myth strongly held among the members of our peanut gallery who never go into McDonald's or Starbucks. In all the many years I've been a regular customer of Starbucks, I've never seen anyone take a selfie there. Nor have you.

 

Fact is, Thais and tourists like Starbucks for the same reasons Americans or even Brits (despite all the hostility from our penny-pinching bush league Brits on this forum) like Starbucks.

 

Starbucks targets 100 more UK stores following strong outlet and sales growth

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On 6/22/2024 at 6:17 AM, hotchilli said:

Only because it's fashionable to be seen eating in these fast food chains.

Yeah, McDonald’s is my go to when I really want to impress a first date.

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1 hour ago, BigStar said:

Nah, you just made that up. But it's repeating a myth strongly held among the members of our peanut gallery who never go into McDonald's or Starbucks. In all the many years I've been a regular customer of Starbucks, I've never seen anyone take a selfie there. Nor have you

Correct, I've never set foot in either in Thailand and never would, I have more respect for my health

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3 minutes ago, hotchilli said:

Correct, I've never set foot in either in Thailand and never would, I have more respect for my health

 

Same same... never stepped a foot in either.... Fark that.

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47 minutes ago, hotchilli said:

Correct, I've never set foot in either in Thailand and never would, I have more respect for my health

 

So, just more proof that Ignorance tends to encourage rather than inhibit the production of hot air on the forum. As for health, go ahead and share all those numbers from your latest lipid panel. You free of meds? I'll be glad to match.

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I've stopped ordering that garbage online, the last couple of times it wasn't cooked properly and the portions are small, if you cant get chicken fried rice cooked then they shouldn't be in business.

I remember we ordered a pizza same it was under cooked, 7/11 has never let me down, Big coffee for 50 baht and one of my favourite is Chicken Tikka Massala, for 69 baht, go in a local Indian gaffe it's 350 baht, 

Here in Rawai I have a favourite place for Fish and Chips on a Friday special 195 baht, you can order it any other time and it's 295 Baht, but they do give you a bigger portion, more than enough. 

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On 6/22/2024 at 5:45 AM, Mike Lister said:

That 10% surge in new food business openings in the past year comes from people leaving other businesses that have failed and looking for new self sufficient opportunities.....I have no job, what can I do, I know I'll cook something and sell it. These are becoming desperate times for many.

 

My wife operates a successful, from home bakery that has seen stellar growth over the past five years, this years the business is struggling for the first time ever. It's discretionary spending and people aren't spending.

I have an acquaintance whose wife has operated a Restaurant that since 10 years has never been non profitable even during the pandemic restrictions. However ever since the limited rebound in customer turnover coupled with some significant increases in pork and chicken prices has impacted net profit about 50%. The business does takeout  but not delivery beyond 2 kms and only then with adequate prior order time.

As mentioned in the OP there have been numerous startups over the last 2 years in particular in the surrounding area which at best have lasted  6 months at best.

I would point out that this is in a small town vicinity  rather than a major city urban setting but the socio-economic trend seems similar.

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13 hours ago, BigStar said:

 

So, just more proof that Ignorance tends to encourage rather than inhibit the production of hot air on the forum. As for health, go ahead and share all those numbers from your latest lipid panel. You free of meds? I'll be glad to match.

Just take a look at the average American waistline... all the proof you need of what fast food chains do to you.

As for Starbucks... over priced and over here.

 

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