Japan’s Line Corp gears up for food delivery fight in Thailand

A woman walks past the logo of Line Corp at the company's headquarters in Tokyo, Japan June 2, 2016. REUTERS/Toru Hanai/File Photo

Line Corp’s food delivery business in Thailand is gearing up for a prolonged battle with players ranging from SoftBank-backed Grab to banks after a merger with a listings heavyweight and an outside capital injection.

Expansion in food delivery by chat app operator Line in its second-largest market comes as the sector grows globally through the novel coronavirus pandemic but questions linger over how companies will turn a profit.

Fast-growing delivery business Line Man hopes its edge will come from last month’s merger with Thailand’s leading restaurant listings site Wongnai, in addition to leveraging Line‘s 47 million Thai users.

“We can reduce costs a lot and that is the path to profitability,” Line Man Wongnai Chief Executive Yod Chinsupakul said in his first interview with international media since taking up the post.

The company is targeting 20 cities by year-end, from 15 now, and is moving more delivery in-house, Chinsupakul said, having relied on Hong Kong-based logistics firm Lalamove to scale quickly.

Line Man Wongnai has raised $110 million to fund its expansion from investor BRV Capital Management – the first of Line‘s overseas businesses to raise such capital.

“The average price per item tends to be very low, therefore focusing on conquering volumes is the strategy to win,” said Alfonso de los Reyes, an analyst at Singapore-based venture outfit Momentum Works.

The merger has left loss-making Line with a 46% stake in the delivery business. It also delivers food in Japan and Taiwan.

Line is being taken private by SoftBank’s domestic internet business Z Holdings in a deal raising expectations that the chat app’s operations will serve as a gateway to overseas expansion.

SoftBank-backed Grab also delivers food in Thailand, along with leftfield challengers like Siam Commercial Bank.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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