--- Page 1 --- Name: Nguyen Tran Minh Nguyet Student ID: 219043020 Class: 21L1IB01 Assignment 2: BAEMIN Introduction: 1.1 About the company: BAEMIN (short for Baedal Minjeok) is a food delivery app, owned by Woowa Brothers, a South Korean developer of smartphone applications and advertising platforms and officially launched in 2010. The company''''s mission and vision is to focus on how to use technology in the food delivery industry. Besides, BAEMIN also aims to create unique and interactive users and support merchants, riders, and consumers. Currently, BAEMIN has the most users, with around 20 million South Korean users. Woowa Brothers Corporation reported operating revenue of around 2.95 trillion South Korean won in 2022, accounting for more than 50% market share in Korea (Woowa Brothers: Operating Revenue 2022 | Statista, n.d.). BAEMIN was helping Woowa Brothers put the name on the business world’s map as a tech unicorn. (Nguyen, 2020) (Figure 1: BAEMIN app) By the end of 2019, German food delivery company Delivery Hero (the world''''s leading delivery platform, providing services in more than 50 different countries) acquired Woowa Brothers for $4 billion. As a part of the deal, Delivery Hero and Woowa Brothers formed a joint venture in Singapore to manage the operations in the Asia Pacific region. (Bước Chuyển Mình Của ‘Kỳ Lân Hàn Quốc’ BAEMIN Sau 1 Năm Ra Mắt Tại Việt Nam, n.d.; Delivery Hero Welcomes Woowa to the Group – All Closing Actions Taken – Delivery Hero, n.d.) 1.2 Brief of the internationalisation strategy in VN: After the success in the hometown, in June 2019, BAEMIN officially launched in Ho Chi Minh City. This application is operated by Woowa Brothers Vietnam, a member of Woowa DH Asia - a joint venture between Woowa Brothers - a Korean food delivery unicorn and Delivery Hero. At the beginning of 2019, the company Woowa Brothers acquired Vietnammm - one of the first names in Vietnam''''s food delivery field. One of the reasons for the acquisition of Vietnammm was that both have the same strategy to focus on operating within Ha Noi and Ho Chi Minh. In 2020, Baemin''''s revenue in Vietnam increased by 484 percent, the highest revenue increase rate among online food delivery apps in the country (Vietnam: Revenue Increase of Online Food Delivery Apps 2020 | Statista, n.d.). After a year of operating in Vietnam, even Grab and Now (now ShopeeFood) held the highest proportion of users (73%), followed was Baemin and Go Food with 46%, this is a remarkable achievement for Baemin as a newbie in the food delivery market in Viet Nam (figure 2). According to Momentum Works, in 2022, Baemin held 12% market share, which was significantly lower than Grab with 45% and ShopeeFood with 41% (figure 3). In December 2023, Baemin had been withdrawn from the Vietnam market, the reasons for this decision were the global economic downturn and intense market competition. Figure 2 (Inc, n.d.) --- Page 2 --- Figure 3 (Food Delivery Platforms in Southeast Asia 2023, n.d.) Internationalisation Strategy: 2.1 Why was the company choosing to internationalisation? In 2018, there was a transformation from the living style of people, when there were many food delivery apps like Grab Food, and Now (also known as ShopeeFood), which held a remarkable position in the market share. According to Grab Food, Vietnam is the second fastest-growing market for food delivery after Indonesia. GrabFood has grown 20-fold since its official launch in Vietnam in June 2018 (Food Delivery Race Set to Last throughout 2019, n.d.). The change in lifestyle led to the development of food delivery, which could be seen in some cities like Ho Chi Minh, Ha Noi, Da Nang,... Youngsters spent most of their time on social media and were willing to pay more for food because of the busier lifestyle. Another example is the office workers, with huge tasks to do every day, they also need another solution like ordering food online to reduce the time on preparing the food from home. Besides that, the development of electronic wallets like Momo, Zalo Pay, and VNPay provides more convenient services in payment for customers. Meanwhile, the dietary needs of customers were becoming more and more diverse, so the apps that provide food delivery services often have many choices for customers, these apps can connect with as many restaurant partners as possible, to build a diverse range of choices for customers. Buyers could consider many foods and drinks just by one order, that is the strength that traditional restaurants can not afford. 2.2 PESTEL analysis To be more specific about the Vietnam market, PESTEL analysis would be one of the overviews for enterprises to ensure the penetration strategy. Political factors: Political factors are one of the most vital effects on the decision to enter the new market because they reflect and shape the country’s economy and business environment. Vietnam is a one-party state where the Communist Party of Vietnam holds a monopoly on political power. This has helped Vietnam stabilise its politics in the past few decades, and attractive investment outside the country also raises economic growth. However, there still exist some internal problems like corruption, bureaucracy, and authoritarianism. Regarding external issues, Vietnam has a long history of tension and conflict with China, including territorial disputes in the South China Sea. This could be the affection for enterprises entering the Vietnam market. Moreover, the government has fulfilled a range of policies to attract foreign investment, including tax breaks, streamlined procedures, and infrastructure development. However, firms must cope with the change in the regulatory environment which could affect their investment. (Vietnam PESTLE Analysis, 2023)
Trang 1Name: Nguyen Tran Minh Nguyet
Student ID: 219043020
Class: 21L1IB01
Assignment 2: BAEMIN
I Introduction:
1.1 About the company:
BAEMIN (short for Baedal Minjeok) is a food delivery app, owned by Woowa Brothers, a South Korean developer of smartphone applications and advertising platforms and officially launched in 2010 The company's mission and vision is to focus on how to use technology in the food
delivery industry Besides, BAEMIN also aims to create unique and
interactive users and support merchants, riders, and consumers
Currently, BAEMIN has the most users, with around 20 million South Korean users Woowa Brothers Corporation reported operating revenue
of around 2.95 trillion South Korean won in 2022, accounting for more
than 50% market share in Korea (Woowa Brothers: Operating Revenue
2022 | Statista, n.d.) BAEMIN was helping Woowa Brothers put the
name on the business world’s map as a tech unicorn (Nguyen, 2020)
(Figure 1: BAEMIN app)
By the end of 2019, German food delivery company Delivery Hero (the world's leading delivery platform, providing services in more than 50
Trang 2different countries) acquired Woowa Brothers for $4 billion As a part of the deal, Delivery Hero and Woowa Brothers formed a joint venture in Singapore to manage the operations in the Asia Pacific region. (Bước Chuyển Mình Của ‘Kỳ Lân Hàn Quốc’ BAEMIN Sau 1 Năm Ra Mắt Tại Việt Nam, n.d.; Delivery Hero Welcomes Woowa to the Group – All
Closing Actions Taken – Delivery Hero, n.d.)
1.2 Brief of the internationalisation strategy in VN:
After the success in the hometown, in June 2019, BAEMIN officially
launched in Ho Chi Minh City This application is operated by Woowa Brothers Vietnam, a member of Woowa DH Asia - a joint venture between Woowa Brothers - a Korean food delivery unicorn and Delivery Hero At the beginning of 2019, the company Woowa Brothers acquired
Vietnammm - one of the first names in Vietnam's food delivery field One
of the reasons for the acquisition of Vietnammm was that both have the same strategy to focus on operating within Ha Noi and Ho Chi Minh In
2020, Baemin's revenue in Vietnam increased by 484 percent, the
highest revenue increase rate among online food delivery apps in the
country (Vietnam: Revenue Increase of Online Food Delivery Apps 2020 | Statista, n.d.)
After a year of operating in Vietnam, even Grab and Now (now
ShopeeFood) held the highest proportion of users (73%), followed was Baemin and Go Food with 46%, this is a remarkable achievement for Baemin as a newbie in the food delivery market in Viet Nam (figure 2) According to Momentum Works, in 2022, Baemin held 12% market share, which was significantly lower than Grab with 45% and ShopeeFood with 41% (figure 3) In December 2023, Baemin had been withdrawn from the Vietnam market, the reasons for this decision were the global economic downturn and intense market competition
Trang 3Figure 2 (Inc, n.d.)
Figure 3 (Food Delivery Platforms in Southeast Asia 2023, n.d.)
II Internationalisation Strategy:
Trang 42.1 Why was the company choosing to
internationalisation?
In 2018, there was a transformation from the living style of people, when there were many food delivery apps like Grab Food, and Now (also
known as ShopeeFood), which held a remarkable position in the market share According to Grab Food, Vietnam is the second fastest-growing market for food delivery after Indonesia GrabFood has grown 20-fold
since its official launch in Vietnam in June 2018 (Food Delivery Race Set
to Last throughout 2019, n.d.) The change in lifestyle led to the
development of food delivery, which could be seen in some cities like Ho Chi Minh, Ha Noi, Da Nang, Youngsters spent most of their time on social media and were willing to pay more for food because of the busier lifestyle Another example is the office workers, with huge tasks to do every day, they also need another solution like ordering food online to reduce the time on preparing the food from home Besides that, the
development of electronic wallets like Momo, Zalo Pay, and VNPay
provides more convenient services in payment for customers Meanwhile, the dietary needs of customers were becoming more and more diverse,
so the apps that provide food delivery services often have many choices for customers, these apps can connect with as many restaurant partners
as possible, to build a diverse range of choices for customers Buyers could consider many foods and drinks just by one order, that is the
strength that traditional restaurants can not afford
2.2 PESTEL analysis
To be more specific about the Vietnam market, PESTEL analysis would
be one of the overviews for enterprises to ensure the penetration
strategy
a Political factors:
Political factors are one of the most vital effects on the decision to enter the new market because they reflect and shape the country’s economy and business environment Vietnam is a one-party state where the
Communist Party of Vietnam holds a monopoly on political power This has helped Vietnam stabilise its politics in the past few decades, and attractive investment outside the country also raises economic growth However, there still exist some internal problems like corruption,
bureaucracy, and authoritarianism Regarding external issues, Vietnam has a long history of tension and conflict with China, including territorial disputes in the South China Sea This could be the affection for
enterprises entering the Vietnam market Moreover, the government has fulfilled a range of policies to attract foreign investment, including tax breaks, streamlined procedures, and infrastructure development
Trang 5However, firms must cope with the change in the regulatory environment
which could affect their investment (Vietnam PESTLE Analysis, 2023)
b Economic factors:
The economic factors are one of the important factors in the PESTEL analysis We can see that from 2016 to 2018 Vietnam’s GDP witnessed stability of rising each year The average growth rate for this period was 7% The country has been transitioning from a centrally planned
economy to a more market-oriented system Besides, the rising of income leads to higher demand for goods and services Moreover, enterprises could take advantage of the lower cost of labour also natural resources Vietnam has signed some free trade agreements including the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), which could create more opportunities for Vietnam However, Vietnam also has
to face the risks of economic such as inflation, income inequality, and
environment issues, (Vietnam GDP 1985-2023, n.d.; Vietnam PESTLE Analysis, 2023)
Figure 4 (Vietnam GDP 1985-2023, n.d.)
c Socio-cultural factor:
Trang 6Social factors: Vietnam has a population of about 97 million, which is expected to grow in the following years This could be both a risk and opportunity for businesses The increase in population could be an
opportunity for enterprises to create a larger market for goods and
services However, this rise could be a risk because of the growth of competitors and the talented labour force
Cultural factors: Another important factor is the culture, Vietnam has such a rich heritage and traditional values, which could affect the
business activities of the company, for example, the interaction between business and employees, or with customers Moreover, Vietnam has a diversity of ethnic and linguistic minorities This could impact the
business in rural areas where ethnic groups may have some differences
in language and tradition However, Vietnam also has to face many
challenges like gender inequality, ethnic minority issues, (Vietnam PESTLE Analysis, 2023)
d Technological factor:
Vietnam has some remarkable investments in development technology In order to develop a talented skilful labour force in the fields of technology and automatic systems This could create the opportunity for the
company to develop and integrate new technologies in the manufacturing process, which could improve productivity, reduce costs and also
improve the quality of products Vietnam has a high internet penetration rate and smartphone ownership, which is an opportunity for the
development of digital products such as e-commercial platforms and online applications But there are still some issues like cyberattacks and
intellectual property rights protection, (Vietnam PESTLE Analysis,
2023)
e Environmental factor:
Vietnam has such a rich biodiversity and numerous natural resources, with a tropical climate, and has 4 four distinct seasons Besides the
development of the economy is the degradation of the environment, the government is still working to balance economic growth and
environmental issues Moreover, Vietnam still has to depend on natural resources with a significant achievement in agriculture However,
Vietnam still has to face the impact of climate change and face
challenges of the environment such as deforestation, and air and water
pollution.(Vietnam PESTLE Analysis, 2023)
Trang 7f Legal factor:
Vietnam has some noticeable changes in the legal system, especially in investment and business regulation areas Vietnam’s legal system is influenced by the country’s Communist Party This creates disadvantages for enterprises when they conflict with the government The country regulation policies was rapidly change and The country's regulation policies are rapidly changing and complex so businesses have to update the change in regulations and licensing requirements to adapt the
operation of firms (Vietnam PESTLE Analysis, 2023)
2.3 Risk - Opportunity
Figure
Opportunity:
First of all, Baemin would take advantage of the lifestyle changes,
youngsters and office workers willing to pay more to reduce the time of preparing food They are be target customers for Baemin After the
success of GrabFood and ShopeeFood, Baemin will have a stepping stone
to easily succeed With very successful marketing campaigns such as
"Quan Ngon Quan Minh" to introduce delicious restaurants and dishes in each district Accordingly, Baemin also provides discount codes to please customers In 2019 and 2020, due to the impact of the Covid 19
epidemic, the need to order food through the app increased, so it was also an opportunity to change customer habits With the success of
marketing campaigns, baemin has received a lot of attention from young people By identifying its potential customers baemin can take advantage
of Vietnam's young population, which has been increasingly in using online services because of its convenience The food delivery market in
Trang 8Vietnam is expected to increase sharply in the years 2019-2023 due to the impact of covid 19 In addition, baemin also has opportunities from the diversity of its own services such as Baemin Mart, Baemin Kitchen,
(Doing Business in Vietnam, n.d.)
Risk:
With opportunities like these, Baemin also faces challenges such as
competitors, consumer behaviour, and financial issues First, GrabFood holds a high market share in the food delivery industry It is difficult for Baemin to change this Baemin entered the market in June 2019, which was soon followed by the outbreak of the pandemic, when operating costs were also an issue for the company Second, because GrabFood and Now had previously spent money to create discount codes to change customer habits, when Baemin had few discount codes, customers were not willing to order Next, Baemin's delivery fee is quite high compared
to the average of other applications Although popular with young people,
in general, Baemin still finds it difficult to surpass big companies such as GrabFood, Now, and GoFood The company has really built a reputation
in the Vietnamese market through marketing campaigns, but there are too few incentive and discount programs, so Baemin is not among the choices of customers Finally, there is the financial issue, Vietnam is facing an economic crisis and unemployment, and Baemin is no
exception With the above challenges, the company finally decided to withdraw from the Vietnamese market after 4 years Germany-based Delivery Hero CEO Niklas Ostberg acknowledged that the company has
no return on profit even in the long term (Baemin Ends Operations in Vietnam after Failing to Deliver Returns, 2023)
2.4 What was the lesson for the company?
After the failure in the Vietnamese market, Baemin should have a lesson
to be able to develop stronger in other markets Firstly, Baemin should research more carefully about the market and its competitors In
addition, the company should focus on creating a unique brand value so that customers can easily distinguish it from other competitors, instead
of just focusing on marketing The company should create attractive monthly promotion programs or weekly discount vouchers to increase user experience Secondly, Baemin should diversify its revenue to
increase its customer retention rate The company can develop more grocery delivery services or integrate with e-commerce platforms to further improve the company's revenue Thirdly, the company should control costs more effectively by associating and cooperating with
Trang 9partners and seeking funding for the company's activities In addition, the company should be flexible in coping with external uncertainties such as the economic recession or the COVID-19 pandemic (‘Why Did BAEMIN Fail in Vietnam?’, n.d.)
III Conclusion:
In conclusion, after 4 years the operation in Vietnam, Baemin has
achieved such a noticeable achievement After the failure in the Vietnam market, the company should analyse the risks and opportunities of the new market to reduce and improve the operation systems to gain more revenue
IV References:
Baemin ends operations in Vietnam after failing to deliver returns (2023,
November 27) https://koreajoongangdaily.joins.com/news/2023-11- 27/business/industry/Baemin-ends-operations-in-Vietnam-after-failing-to-deliver-returns/1922339
Bước chuyển mình của ‘Kỳ lân Hàn Quốc’ BAEMIN sau 1 năm ra mắt tại
Việt Nam (n.d.) Retrieved 29 December 2023, from
https://thanhnien.vn/buoc-chuyen-minh-cua-ky-lan-han-quoc-baemin-sau-1-nam-ra-mat-tai-viet-nam-185963911.htm
Delivery Hero welcomes Woowa to the group – all closing actions taken –
Delivery Hero (n.d.) Retrieved 29 December 2023, from
https://www.deliveryhero.com/newsroom/delivery-hero-welcomes-
woowa-to-the-group/?ssp=1&darkschemeovr=1&setlang=vi-VN&safesearch=moderate
Doing business in Vietnam: Advantages and disadvantages (n.d.)
Retrieved 29 December 2023, from
https://www.wolterskluwer.com/en/expert-insights/doing-business-vietnam
Trang 10Food delivery platforms in Southeast Asia 2023 (n.d.) Momentum
Works Retrieved 28 December 2023, from https://momentum.asia/ product/food-delivery-platforms-in-southeast-asia-2023/
Food delivery race set to last throughout 2019 (n.d.) Retrieved 29
December 2023, from https://vir.com.vn/food-delivery-race-set-to-last-throughout-2019-65329.html
Inc, A P (n.d.) Xu hướng sử dụng Ứng dụng giao hàng thức ăn tại Việt
Nam 2020—Báo cáo nghiên cứu thị trường | Q&Me Retrieved 27
December 2023, from https://qandme.net/vi/baibaocao/xu-huong-su-dung-ung-dung-giao-hang-thuc-an-tai-vietnam-2020.html
Nguyen, M (2020, July 13) A Brand’s Story: BAEMIN Builds a Culture of
Conversationalists Vietcetera
https://vietcetera.com/en/a-brands-story-baemin-builds-a-culture-of-conversationists
Vietnam GDP 1985-2023 (n.d.) Retrieved 29 December 2023, from
https://www.macrotrends.net/countries/VNM/vietnam/gdp-gross-domestic-product
Vietnam PESTLE Analysis: An Attractive Destination for Businesses
(2023, June 12) PESTLE Analysis
https://pestleanalysis.com/vietnam-pestle-analysis/
Vietnam: Revenue increase of online food delivery apps 2020 | Statista
(n.d.) Retrieved 29 December 2023, from https://www.statista.com/
statistics/1264550/vietnam-revenue-increase-of-online-food-delivery-apps/
Why Did BAEMIN Fail in Vietnam? (n.d.) CMO Intern Hành trình cho
một sự nghiệp toả sáng của Marketers Retrieved 29 December