Delivery Hero-backed Baemin to exit Vietnam on low returns

Baemin, the top food delivery platform in South Korea, will exit Vietnam on Dec. 8 after four years of operations there amid fierce market competition, media reports said on Saturday.

Germany-based Delivery Hero SE, Baemin Vietnam’s parent, decided on the exit due to challenges from global macroeconomic conditions and long-term profit trends and will focus on other markets where it has a leading position, according to media reports.

In August, Delivery Hero co-founder and Chief Executive Niklas Östberg told Reuters that its overall Asian market business was good with the exception of Vietnam. The German company started to scale down the Vietnamese business in the third quarter of this year.

Baemin entered the Vietnamese market in 2019 as it acquired local player Vietnammm from Dutch company Takeaway.com. Last year, Baemin Vietnam’s food delivery market share in the Southeast Asian country was 12%, lagging Grabfood’s 45% and Shopeefood’s 41%, according to tech industry research firm Momentum Works.

Baemin topped Korea’s food delivery market with around 65% share in October, followed by the second-largest Yogiyo with 19% and Coupang Eats with 15%, according to Seoul-based data research firm IGAWorks.

Delivery Hero signed a deal to acquire an 88% stake in Baemin’s operator Woowa Brothers Corp. at $4 billion in 2019. The final transaction value in March 2021 reached €5.7 billion ($6.2 billion), the German food delivery giant announced at the time.

In 2021, Delivery Hero sold a full stake in Yogiyo to a consortium of GS Retail Co., Affinity Equity Partners and UK-based investment firm Permira for 800 billion won ($612.4 million). The sale of Yogiyo was a condition for the acquisition of Baemin, put forward by the Korea Fair Trade Commission, which raised concerns about Delivery Hero's monopoly in Korea. 

Write to Hun-Hyoung Ha at hhh@hankyung.com

Jihyun Kim edited this article.