Rocket Internet-backed food ordering platform Foodpanda announced that it will be aborting its operation in the Vietnamese market on Wednesday, after over three years of being in the food ordering service sector, in the country.
“Through this notice, we would like to inform you that our company will terminate the business in Vietnam due to the difficulties in financial situation,” Foodpanda said in a letter to its Vietnam-based partners.
DEALSTREETASIA reached out to Foodpanda through three phone numbers available at Vietnamese corporate information pages, but they turned out to be non-existent.
Meanwhile, experts have pointed out that Foodpanda’s business model is not relevant to the Vietnamese market, where people, especially the young, prefer to eat out. New restaurants, which have mushroomed all over the country, have their own delivery services.
A lot of people in the Vietnamese startup community also assert that Foodpanda has not done well with its communication strategy.
Another reason for the failure of Foodpanda Vietnam might be the lack of organised logistics sector, which is just beginning to take shape, and could not have provided a good base Foodpanda’s model
In addition, according to some industry insiders, another mistake that Foodpanda made was in recruitment. It expanded its team too fast, making operational mistakes, which were exposed as the money ran out.
The failure of Foodpanda Vietnam is concluded to be not because of a lack of funding, but due to the improper spending of money.
These two are also backed by bigger international groups. Netherlands food ordering company Takeaway, which has $117.66 million in funding, poured an undisclosed investment in Vietnammm in 2013.
Meanwhile, Deliverynow has been developed by gourmet media company Foody Corporation. The CyberAgent Ventures‘ Vietnamese investee has recently raised undisclosed series C round from US-based venture capital firm Tiger Global Management.