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BAEMIN’s Competitor Analysis for Entering to Vietnam
Strategic Marketing Final Project
Phuong Phung (19612)
Spring 2022 – 04.19.21
Instructor: Dr. James Nysather
San Francisco Bay University
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TABLE OF CONTENTS
TABLE OF CONTENTS ................................................................................. 1
Pictures, Figures and Tables ......................................................................... 3
Terms and Abbreviations ............................................................................... 4
1 EXECUTIVE SUMMARY ........................................................................... 5
2 SITUATION ANALYSIS ............................................................................. 6
2.1 Product Offer .......................................................................................................... 6
3 MARKETING STRATEGY ......................................................................... 8
3.1 Country Choice....................................................................................................... 8
3.2 Overall Strategy...................................................................................................... 9
3.2.1
Mission and Vision ................................................................................... 9
3.2.2
Overall Strategy: “Slowly but Surely” ..................................................... 10
4 MARKET SUMMARY .............................................................................. 12
4.1 Market Demographics .......................................................................................... 13
4.1.1
Demographics ........................................................................................ 13
4.1.2
Geographics........................................................................................... 14
4.1.3
Consumer behaviours ............................................................................ 14
4.2 Growth of the Vietnam market .............................................................................. 15
4.3 Structure of the Vietnam market ........................................................................... 17
5 COMPETITOR ANALYSIS ...................................................................... 19
5.1 Direct Competitor Profiles .................................................................................... 19
5.1.1
GrabFood ............................................................................................... 19
5.1.2
ShopeeFood .......................................................................................... 20
5.1.3
Gojek ..................................................................................................... 21
5.2 Indirect Competitor Profiles .................................................................................. 22
5.2.1
Home-cooking ........................................................................................ 22
5.2.2
Local restaurants ................................................................................... 22
5.3 Strengths and Weaknesses ................................................................................. 23
5.4 Competitor Positioning ......................................................................................... 24
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5.5 Competitor Strategy Profiles................................................................................. 26
6 CONCLUSION & RECOMMENDATION .................................................. 27
BIBLIOGRAPHY .......................................................................................... 28
APPENDICES ............................................................................................. 32
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Pictures, Figures and Tables
Picture 1. The app interface ................................................................................................. 7
Picture 2. Reasons to order food by delivery app in Vietnam 2020 – 2021........................ 12
Picture 3. BAEMIN's taget age group, gender and location ............................................... 13
Picture 4. Food ordering frequency .................................................................................... 15
Picture 5. Vietnam online food delivery market, by value (USD million) ............................ 16
Picture 6. Food tech companies' market shares in Vietnam (2021) ................................... 17
Picture 7. Food tech companies' market shares in Vietnam (2020) ................................... 17
Picture 8. App delivery satisfaction among the brands ...................................................... 18
Picture 9. Competitor positioning ....................................................................................... 25
Table 1. BAEMIN's Target Audience ................................................................................. 13
Table 2. Grab's key information ......................................................................................... 20
Table 3. ShopeeFood's key information ............................................................................. 20
Table 4. Gojek's key information ........................................................................................ 21
Table 5. Strengths and weaknesses analysis .................................................................... 24
Table 6. Competitor Strategy Profiles .................................................................................. 1
Table 7. Definition of marketing concepts ............................................................................ 2
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Terms and Abbreviations
naengmyeon
Cold-noodle soup
jjajangmyeon
Noodles with a black bean paste sauce invented by Chinese
immigrants settled down in Incheon in 1900s.
SEA
Southeast Asia
CEO
Chief Executive Officer
Gen Y
also known as Millennials – they were born between 1981 and
1994.
Gen Z
The generation who were born between 1995 and 2012.
BAEMIN
Short for Baedal Minjok
Corp.
Corporation
R&D
Research & Development
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1 EXECUTIVE SUMMARY
Owing to the potential growth in Vietnam market, a South Korean food-tech unicorn named
BAEMIN entered this market in 2019.
The main product which BAEMIN offers is a food app for smartphones. The app allows users to order food from a wide range of restaurants within the city remotely. The app also
optimises payment options for customer convenience. Besides, the firm provides plenty of
by-products to intrigue buyers’ love for limited edition items. As a result, this approach led
to a massive number of download times.
BAEMIN’s mission statement is “good food, anytime, anywhere”. Their vision is to create a
better and more convenient life for their customers. According to its mission and vision,
BAEMIN penetrated the Vietnam market with a “Slowly but Surely” strategy. “Slowly”
means they focus on each city one by one, starting with the most crowded city, which is
Hochiminh City. BAEMIN’s customer segmentation is office workers from 18 to 34 years
old living. Later, they intended to scale up to other cities like Hanoi, Can Tho, Bien Hoa,
Danang, etc. “Surely” means they concentrate on quality by training their riders professionally and improving the list of excellent restaurants.
BAEMIN’s direct competitors are Grabfood, Gojek and Shopeefood. Its indirect competitors are local restaurants and home-cooking. Grabfood and Shopeefood are leaders in this
market, but BAEMIN ranks first in customer service. BAEMIN is positioned as a low price
and slow delivery brand therefore they are cost leadership in this competition.
After analysing BAEMIN’s marketing strategy and its competitors, the writer recommends
the brand to keep investing in marketing campaigns as they are good at doing it. In addition, the company should balance between rider’s quality and quantity which helps to
speed up delivery time. As COVID-19 has not shown any sign of reducing, it is vital for
BAEMIN to come up with appropriate strategy to deal with current situation in Vietnam
market.
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2 SITUATION ANALYSIS
The history of food delivery services in South Korea go back to the Joseon era, in 1768,
when the scholar Hwang Yun-seok said that he ordered naengmyeon (cold-noodle soup)
for lunch after he finished the examination. His story has been considered as the introduction of delivery service. Much later, when jjajangmyeon was born then became a favourite
among the public during the 1950s, it led to the evolution of food delivery. Yet, the golden
age of delivery service has not started until the 1990s. It’s the time the fried chicken and
pizzas franchises excessive growth in South Korea. Thanks to its convenience, food delivery services do not vigorously develop in South Korea only but also expands to several
Asian nations such as Japan, Singapore, Malaysia, Indonesia, Vietnam, etc.
Due to the non-stop growth of this business model, several companies offer this type of
service. One of the most well-known firms operating in this field is Baedal Minjok. Baedal
Minjok was owned by Woowa Brothers Corp. It is a South-Korean food tech unicorn,
founded in 2010. Their primary product is called BAEMIN, which is a food delivery application on smartphone. After achieving success at home for eight years, this food tech unicorn has set its sight on an emerging market – Vietnam.
At the beginning of 2019, BAEMIN launched several marketing campaigns to announce its
penetration into Vietnam. On 10th June 2019, much later than other competitors, the South
Korean start-up unicorn officially entered this emerging market. They decided to set a base
in Hochiminh City which is the most crowded city in Vietnam first. Their purpose is to
tackle Vietnamese eating style, which is gradually moving more far away from home
kitchen.
2.1
Product Offer
As the writer has mentioned above, the main product developed by Baedal Minjok is an
application on smartphones. The app's main function is to connect users with numerous
food stores and order food from these suppliers. The app also allows users to pay in
different ways, for instance, paying in cash, by card, or via e-wallets (Zalo, Momo,
VNPAY, etc.). With each order, BAEMIN’s users are charged at least 17,000VND for
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shipping and 2,000VND for service fees. In order to attract more customers, BAEMIN
offers many coupons and vouchers which let users purchase food way cheaper than
buying it in person.
The app is user-friendly with a unique style. While the app is loading, a “chubby ginger
cat” appears on the phone. He is BAEMIN’s mascot. Later, when the users get into the
app, they will see several banners that introduce plenty of discount campaigns. Right
behind these banners are eight food categories, namely “Good Deal”, “Rice”, “Noodles”,
“Drinks”, “Specialties”, “Fastfood”, “Snacks” and “Healthy”. Under each of these groups
is the list of restaurants arranged from the nearest to the farthest (see picture 1).
Picture 1. The app interface
Besides the app, BAEMIN also introduced a lot of by-products including tote bags, pens,
T-shirts, lunchbox, posters, stickers and badges, etc. These products were promoted in
just a short period time for BAEMIN’s users only. The company aimed to psychologically
trigger buyers since people all love limited edition items. Consequently, this approach led
to a huge number of download times.
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3 MARKETING STRATEGY
To get to know BAEMIN’s strategy when penetrating the Vietnam market, the writer
would like to indicate some detailed reasons why it is selected from a marketer’s view.
3.1
Country Choice
Firstly, Vietnam is famous for its diverse cuisine and its vibrant food scene. Vietnamese
food culture has been changing over time. As stated above, Vietnamese value quality
over convenience, making online food delivery services less developed than other nations
in SEA or Asia. Since 2010, when Uber and Grab came to Vietnam, and both provided
mobility as a service, Vietnamese started to get familiar with using smartphones app to
make a booking or an order. This is a premise for food delivery players to jump into this
promising market.
Secondly, Vietnam is one of the fastest growing markets in SEA in particular and in the
whole world in general. According to data in 2020, the current food delivery penetration
only accounted for 3% of total population, in comparison with Indonesia, which is 9%.
Furthermore, the swift expansion of the Internet and smartphone as well as the
increasing income and investments are the main factors that can get Vietnam to the 3
biggest food delivery markets within the region in 2025. According to BAEMIN’s
strategic plan, Vietnam is not only a potential market, but it is also a bridge to help the
company broaden its’ target customers to other Southeast Asian countries.
Thirdly, as it is a developing country with a rapid pace of life, Vietnamese have recently
preferred ordering food or eating out to home-cooking. However, the percentage of
people using food delivery is still smaller than the percentage of people who go out to
eat. Eating at home or at the restaurant is a long-standing culture since good and cheap
food stores are plentiful on the street. Additionally, Vietnamese, especially adults and
elderly, prioritise quality (fresh) and diversity of the ingredients over the convenience.
Mr. Kim Bongjin, founder of BAEMIN, mentioned this as a competitive value in the food
tech industry. With the thriving of high-technology and digital products nowadays, food
delivery service on app has already been familiar to Vietnamese users. Therefore,
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BAEMIN steps into Vietnam with the ambition of changing consumer behaviour, starting
with the young generation. Most of them are classified as gen Y and gen Z.
3.2
Overall Strategy
Vietnam’s food delivery app industry is competitive. Before BAEMIN, some big operators
have jumped into this market. Some accomplished certain success here, such as GrabFood, Gojek, ShopeeFood. Some failed, like Foodpanda or Lalamove. Despite its late start
in this intense competition, with an appropriate direction and strategy, BAEMIN quickly
caught up with Gojek in the battle for market shares.
3.2.1 Mission and Vision
Mr. Kiwan Ihn, CEO of Woowa Brothers Vietnam – stated that “Earning our Merchant Partner's, Customer's as well as Delivery Riders' and the community's trust is always our number one strategy”. He also highlights BAEMIN’s mission as “to help people eat well anytime, anywhere”. As can be interpreted from the mission statement, customer experience
is the key focus of the firm's direction. BAEMIN is striving to upgrade customer experience
to the next level each and every day by cherish their emotions. This food tech unicorn believes that with their extraordinary accomplishments in delivering outstanding experiences
for customers in South Korea, they can be successful again in Vietnam.
From launching up to now, this tech company has continuously evolved their vision. Mr.
Jinwoo Song, CEO of BAEMIN Vietnam, once said at the press conference that “In the future, our ambition is to position BAEMIN as a sympathetic friend who can help customers
lead a better and more convenient lifestyle". No matter how the vision has been developed, it always stays true to the brand’s core purposes. They both bringing appetite specialities to everybody and improving riders and partners’ satisfaction. Hence, along with
BAEMIN app, the brand has extended its product lines with Baemin Riders’, ‘Baemin
Kitchen’ and ‘Baemin Store’.
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3.2.2 Overall Strategy: “Slowly but Surely”
The overall strategy that BAEMIN applied for Vietnam market could be called “Slowly but
Surely”. To understand this strategy clearly, the meaning of “Slow” and “Sure” are going to
be analysed below.
“Slow” means “slow growth instead of fast growth”. More than anyone else in this game,
BAEMIN understands its challenge in Vietnam market is the underdeveloped food delivery
culture. Therefore, BAEMIN’s strategy focuses on each city one by one. In other words,
the brand served one province or city at a time. When they came to Vietnam in 2019, the
company only operated in Hochiminh City. One year later, it appeared in Hanoi, then two
years later, BAEMIN is available all over the country, in more significant cities including
Bien Hoa, Danang, Vung Tau, Can Tho and Nha Trang, etc. Another remarkable approach
is that BAEMIN strongly invests in branding. As Mr. Nguyen Trung Thanh – COO of BAEMIN explained, this move will increase brand image, brand awareness as well as consumer expectations in Hanoi. Moreover, this approach allows BAEMIN to grow faster when
reaching the capital city or other regions.
"Sure" means they concentrate on service quality. While the service in Vietnam, especially
in the food and beverage industry, is still not good, the biggest advantage of a Korean
name when breaking into the Vietnam market is probably the quality of service. Valuable
lessons learned from the competitors show BAEMIN how to achieve their goals to attract
and change the habits of Vietnamese food consumers. Hence, from the beginning, BAEMIN chose to master their service quality consistently. BAEMIN considers both the restaurants and the riders as its partners. The company works to improve the experience of both,
which brings the best experience to the end-users. To create sustainable value for all
stakeholders, the company highly focused on rider training and supporting local food
stores.
Firstly, BAEMIN wants to create a consistent, professional service style. The COO of Baemin said in the interview with the press that "We want to leave a good first impression on
our customers with BAEMIN's well-mannered and polite rider team". Therefore, its selection and training process is more rigorous than competitors'. Riders must take an intensive
training program if they want to be a member of BAEMIN network. This program has many
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rounds, such as preliminary tests, training classes and the final test. Only when they pass
all the examinations, are they granted a BAEMIN rider account.
Secondly, in terms of restaurants approach, BAEMIN refers them to "merchant partners".
The company tries to keep a close relationship with these merchants for a long-run development strategy. BAEMIN and its partners make sure the service quality, food safety, delicious and unique dishes are top prioritised. As mentioned previously in this essay, Vietnam is an emerging market for food delivery services. Street food vendors are yet to get
accustomed to sales on phone applications. Thus, BAEMIN actively creates a revenue
stream throughout the transition from offline to online for restaurant owners. BAEMIN's
staff are available to guide their partners on how to gain larger profit and create best-suited
products for selling on BAEMIN's platform. Not only those benefits, but the company also
responds and make payments to the owners timely.
Noticeably, BAEMIN's brand and image are designed in a very friendly and cute style to
target the young users. Additionally, the youthful mint green colour, the mascot of a fat cat
wearing a helmet, BAEMIN scored with the young with its catchy and humorous copywriting like "The engine is running. Come here! Come here!" (This phrase is translated from
Vietnamese to English).
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4 MARKET SUMMARY
It was not until users’ habit started to change since 2018, food delivery was considered
under potential. From a niche service used by a small proportion of citizens, it has become
a professional business segment. Thanks to the ease and speed of ordering food online,
combined with the transparency and reduction of cashback deals, this service benefits
many parties involved from users, riders to food suppliers. In addition, the COVID-19
outbreaks and social distancing results in the accelerated usage of online delivery. During
the lockdowns, dining out was no longer a choice (see picture 2). Due to that fact, people
in Vietnam have become more digitalised regarding how they get food, drink or even
grocery.
Picture 2. Reasons to order food by delivery app in Vietnam 2020 – 2021
According to some statistics (2020), it is said that 34% population used food delivery
apps, while 8% of the total used it frequently, most of them are women. Residents in large
cities such as Hanoi or Hochiminh City used this service more commonly than those in
smaller towns. Mostly, they order food for lunches during the week and dinners during
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the weekend. GrabFood has been the king in this competition up to now. It is recorded
that the revenue of food-tech industry has experienced a growth rate of 28.5% per year
in general.
4.1
Market Demographics
4.1.1 Demographics
Table 1. BAEMIN's Target Audience
Primary Target Market
Secondary Target Market
Age
25 – 34 years old
18 – 24 years old
Gender
Female (mostly) and Male
Female (mostly) and Male
Income
Moderate and High income
Low and Moderate income
Occupation
Officers and working adults
Students and graduated
Picture 3. BAEMIN's taget age group, gender and location
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As can be observed from the graph and the table above, from the time of debut until
present, BAEMIN has been addressing two target groups. The first group is people who
are from 25 to 34, comprises nearly 60% of BAEMIN customers. They are officers with a
moderate and high salary which is approximately from 8 million to 35 million. The second
group is younger population who in the age of 18 to 24. This group constitutes 38% of
total BAEMIN users. Most of them are graduates or undergraduate students. They have
little income, which is usually below 8 million per month. In both groups, the percentage
of female users outnumbers the percentage of male users by 67,8% to 24%.
4.1.2 Geographics
BAEMIN implements “Slowly but Surely” strategy in the whole nations, but they kicked off
their plan in Hochiminh City first, as described in section 3. It is because Ho Chi Minh City
(also known as Saigon) is Vietnam's most important and dynamic city with more than 10
million inhabitants. Looking at the smaller scale, even in Ho Chi Minh City, BAEMIN also
made its debut in some central districts such as District 1, District 3, and District 10 first
before steadily covering other areas. Along with the campaign "Delicious restaurants in my
district", Baemin launched promotions, attracting both buyers and sellers and capturing
market share in each district. This intelligent tactic from BAEMIN helps the company avoid
incurring high costs of spending on running promotions in the whole city.
4.1.3 Consumer behaviours
Gen Z has been seen as trendsetters in everything, for instance, entertainment, fashion,
food and beverage, etc. Furthermore, young customers tend to spend most of their time
online. Some research has indicated that young adults usually surf the web for around 6
hours and 50 minutes on tablets and PC, 2 hours and 30 minutes on cellphones; and use
their mobile phones for entertainment purposes for 2 hours and 40 minutes. This age
group regularly updates their daily activities on social media networks like Facebook,
Youtube, Instagram, Tiktok, etc. They desire to express their characteristics. They quickly
catch the new trends and try new things. They are willing to use and effortless to pay for
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convenient service, especially when they have many coupons or discount codes. Consequently, BAEMIN chooses this age group for its marketing strategy is about educating this
segmentation, raising brand awareness, and eventually turning them into loyal users.
Gen Y, on the other hand, are more likely to be followers. Most of them have a nine-to-five
job. They do not have much free time due to their heavy workload. They would rather eat
at the office rather than in the dining room. They would rather grab something to eat
quickly instead of cooking, so they will have enough time to meet all deadlines. These office workers often order food on delivery apps 3 to 4 times a week, mostly at lunch (See
picture 4 below). However, they require both fresh food and convenience at the same time.
Picture 4. Food ordering frequency
4.2
Growth of the Vietnam market
Vietnam food delivery on the app market was worth USD 523.1 million in 2020, and it will
continue to experience an upward trend in the next seven years. The market is expected
to reach USD 2,587.1 million by 2027 (see picture 5). According to a report conducted by
Euromonitor, in spite of many opportunities ahead, food delivery battle in Vietnam is going
to be highly competitive.
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Picture 5. Vietnam online food delivery market, by value (USD million)
According to Gojek, one of BAEMIN’s rivals, their riders receive thousands of orders every
day with an increase of 25-35% per month. Speaking about development chances in the
Vietnam market, Gojek representative claimed that there are many factors leading to the
explosion of the online food delivery industry during recent years.
The first one is the accessibility in the modern and busy life. With the application on the
phone, it is not difficult to decide what and where to eat. This service is always available,
even during holidays, so that users can make orders at any time. The second factor is convenience. These apps show consumers a variety of restaurants ranked from 1 to 5 stars
by other users. People have several food options to select, ranging from Western to Eastern cuisine. Plus, these apps also classify menus by food needs or suggest the nearest
food stores helping consumers make decisions more quickly. Last but not least is the stimulus campaigns on apps. Besides appealling people to download the apps and use them,
these campaigns also stimulate development of food vendors.
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4.3
Structure of the Vietnam market
Picture 6. Food tech companies' market shares in Vietnam (2021)
Picture 7. Food tech companies' market shares in Vietnam (2020)
As can be seen from picture 6 and 7, ShopeeFood and GrabFood are equally holding
41% of the market shares. Being a newcomer for just a few years, BAEMIN has an
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excellent performance when accounting for 15% of the total market shares (data collected
in 2021). Though GrabFood and ShopeeFood are dominating the market, BAEMIN has
the best growth for now. At the moment, it successfully ranks first in customer satisfaction
among four other competitors (see picture 8). BAEMIN strives to prove itself as a gamechanger because now GrabFood is famous among the old meanwhile BAEMIN suits the
youngsters.
Picture 8. App delivery satisfaction among the brands
Apparently, this fierce competition is only for giant operators to join. Although many
startups, SMEs or corporations tried to get access to Vietnam market, most of them
could not survive. Taking Foodpanda as an example, a food-tech company originally
comes from Germany, joined this market in 2012. Two years later, Foodpanda
experienced a dramatic loss which made the company announce its termination in
Vietnam market. Foodpanda is not a latecomer in this competition, yet, unlike BAEMIN
or Gojek, the brand did not have the right business model and communication strategy
to dominate the market. Additionally, Foodpanda seemed not to focus on improving
customer service and delivery times, which led to its failure.
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5 COMPETITOR ANALYSIS
In this section, the writer will profile BAEMIN’s direct and indirect competitors. Next, the
writer is going to analyse the strengths and weaknesses of the company. Furthermore,
other aspects of this section, including competitor positioning as competitor strategy, will
be demonstrated below
5.1
Direct Competitor Profiles
In this market, the main direct competitors of BAEMIN are:

GrabFood.

ShopeeFood.

Gojek.

Loship.
Loship is not considered as a heavyweight rival because the number of Loship’s users is
minor. Therefore, here in this essay, the writer intentionally selects GrabFood, ShopeeFood and Gojek for deeper analysis.
5.1.1 GrabFood
GrabFood is a part of Grab Holding Inc., Southeast Asia’s leading mobile platform. Initially, Grab only offered taxi booking. As time went by, intending to become a super-app,
the firm provided more food delivery, grocery delivery, and digital payment services. Now,
Grab is available in eight Southeast Asian countries, including Vietnam, Indonesia, Thailand, Singapore, Malaysia, Myanmar, and the Philippines. Here in the table below is summary of the company’s key information.
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Table 2. Grab's key information
Company’s name
Grab Holding Inc.,
Product
Mobile app
Industry
Technology, Transportation, Food delivery, Grocery
delivery, Parcel delivery, E-commerce, Online payment and Financial services
Direct competitor to BAEMIN
GrabFood
Headquarter
Singapore and Indonesia
General size
6000 (2019)
Length of time in Vietnam
9 years since 2014
5.1.2 ShopeeFood
Shopee is more well-known as a leading e-commerce platform in the Southeast Asia
region, Brazil, Mexico and Taiwan. It belongs to Sea Group’s business ecosystem. ShopeeFood is one of the services provided by Shopee. However, ShopeeFood was previously known as DeliveryNow or NowFood. It was the first food delivery app founded by a
Vietnamese tech firm Foody Corporation in 2012. In 2017, Sea Group acquired Foody,
then, four years later, it was rebranded as ShopeeFood but all the benefits for customers
stay the same.
Table 3. ShopeeFood's key information
Company’s name
Shopee (mother company is Sea Group).
Product
Mobile app
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Industry
Technology, Food delivery, Parcel delivery, E-commerce, Online payment.
Direct competitor to BAEMIN
ShopeeFood
Headquarter
Singapore
General size
More than 8000
Length of time in Vietnam
10 years since 2012. Rebranded in 2021.
5.1.3 Gojek
Gojek was a multi-service platform founded in Indonesia in 2010. Similar to Grab, at first,
the firm only provided ride-hailing services. After that, when it evolved and valued at
$10,000,000 now, the company expanded its operating areas and services as well. Each
of Gojek’s service is associated with a different name, for example, GoRide/Go Car for taxi
booking, GoFood for food delivery, GoSend for logistics, etc.
Table 4. Gojek's key information
Company’s name
Gojek
Product
Mobile app
Industry
Technology, Transportation, Food delivery, Logistics, E-commerce, Online payment.
Direct competitor to BAEMIN
GoFood
Headquarter
Indonesia
General size
3000 (2019)
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Length of time in Vietnam
5 years since 2018 under the name ‘GoViet’. In 2020,
it was rebranded as Gojek to match with its mother
company’s brand identity.
5.2
Indirect Competitor Profiles
5.2.1 Home-cooking
An old-fashioned, home-cooked culture is a beautiful tradition in most Asian countries. Due
to the ongoing COVID-19 epidemic and the prevalence of remote work, more Vietnamese
have started eating three meals a day. People choose to eat home-cooked food because
they are afraid of getting in contact with strangers who may carry pathogens. Additionally,
food safety is one of the top social concerns. Food poisoning is not an uncommon issue in
Vietnam. Local media has reported that several cases of people, both children and adults,
are sent to the hospital over this problem each year. As a result, many households refuse
to dine out or use food ordering services.
5.2.2 Local restaurants
Local restaurants create both opportunities and challenges for food-tech companies. On
the one hand, if the firm can establish successful partnerships with local food retailers,
they will have a great supply chain for their business. On the other hand, when some restaurants deny incorporating, they become indirect competitors with the food ordering service providers. Besides, eaters nowadays are dining out more often for meetings, for
spending quality time with their families and friends. Diners select restaurants over food
delivery apps because they want to enjoy the ambient atmosphere and good hospitality. At
some small and medium local eateries, customers are able to pre-order then come over to
pick up their food later. This kind of service is also seen as an indirect rival of food-tech operators.
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5.3
Strengths and Weaknesses
Table 6 above indicates BAEMIN and its competitors’ strengths and weaknesses. Five critical success factors which are going to be analysed in this section consist of brand image,
service, number of food vendors, speed of delivery and cost-effectiveness.
In terms of brand image, Grab and BAEMIN both rank first with 75 weighted scores. BAEMIN and GrabFood have done a great job shaping how customers view their brands
through their marketing campaigns. One of the most successful campaigns from BAEMIN
when they first came to Vietnam was “Delicious Food in our Districts”. BAEMIN chose to
collaborate with the most famous Vietnamese actor. In this campaign, BAEMIN intentionally compares food to men. Picking a restaurant or food is similar to choosing your lover:
women feel safe in love just like how they are faithful to a nearby restaurant, but love is
also as adventurous as discovering delicious dishes in a far away place. It is advised in
this TVC that women should choose the person who is both safe and interesting and
choose BAEMIN to eat tasty food within their living spaces. A few years ago, Grab also ran
GrabFood's Signatures campaign, which received remarkable results. The brand encouraged Vietnamese eaters to expand their favourite food choices. They utilised social media,
especially Facebook and Youtube, to reach out to youngsters from 16 to 25 years old. Additionally, they collaborated with popular streamers, actors and other influencers to increase brand awareness. The company aimed to attract users to experience specialities
only available on GrabFood.
In addition, BAEMIN and Grab again both get 125 scores for their services. As mentioned
before, BAEMIN puts lots of effort into providing a top-notch customer experience by owning a professional rider team and high-quality restaurants. As a leader in this industry,
Grab always offers its customers the best service with well-trained staff. Moreover, unlike
other firms, Grab’s drivers are allowed to work 24 hours. As a result, Grab is available to
serve users whenever they need it. ShopeeFood is rated third because customers feel unsatisfied due to some drivers’ negative attitudes. Gojek ranks fourth since it has many orders cancelled by drivers. Apart from that, Gojek limits the payment methods that cause
inconvenience for users.
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Furthermore, Shopeefood and Grabfood both have a wide range of restaurants and drivers
than BAEMIN and Gojek. However, only Grabfood can manage fast delivery. Meanwhile,
Shopeefood usually delays orders which leads to low customer satisfaction. BAEMIN does
not have enough riders to serve a large number of customers, thus, in some smaller cities,
they partner with other delivery companies to ship the orders. As a result, BAMEIN ranks
the lowest in the speed of delievery. Last but not least, BAEMIN wins the price competition
with the cheapest shipping costs of all. BAEMIN also has lots of coupons and runs many
promotions to attract eaters. Grab costs as expensive as Shopee, but Shopee has more
vouchers than Grab, so it was rated second. In general, Gojek performance in all aspects
is average which results in the lowest weighted score.
Table 5. Strengths and weaknesses analysis
5.4
Competitor Positioning
In general, BAEMIN is positioned to be slow delivery and low price. Gojek is the second
lowest-priced food delivery app. Meanwhile, GrabFood is leading in speed delivery with
a high price. ShopeeFood is also usually arranged in the same position as GrabFood
(see picture 9). Nonetheless, ShopeeFood’s charges fluctuate depending much on
different regions and periods of time. Therefore, it is difficult to compare it with the other
three players.
25
Picture 9. Competitor positioning
Speaking about BAEMIN’s current position specifically, the tech unicorn from South
Korea has just debuted in Vietnam market for almost four years. Consequently, the
number of merchant partners is less than Grab’s, ShopeeFood’s or even Gojek’s. In
addition, BAEMIN highly concentrates on training a professional rider team, which
causes the shortage of delivery staff. Lastly, the order process from restaurants is
passive and time-consuming. In fact, BAEMIN applications used to support their
partners are underdeveloped, unlike the GrabFood Merchant app.
26
5.5
Competitor Strategy Profiles
All four brands are multinational corporations, and they have both different and similar
marketing strategies. Table 6 below demonstrates each company’s strategic options.
Previously, Shopeefood was known as Nowfood which has already been established in
2012, while Grab was the first foreign country to offer food delivery in Vietnam.
Consequently, they can be seen as the first movers. They have contributed to introducing
the concept of food delivery on app and developing the market. BAEMIN and Gojek
entered the market much later, so they are followers who are penetrating Vietnam market.
These two companies make the competition become more intense. In order to create a
competitive advantage among the four, BAEMIN applies cost leadership strategy, which
allows the firm to provide customers with the lowest delivery cost and discount vouchers.
The marketing approach that Grab, Shopee and Gojek are implementing is selected
specialisation. Not only do they work in food delivery, but they are also active in other
areas such as e-commerce, online payment, transportation, etc.
In terms of offensive and defensive strategy, Grab and Shopee both select flanking
attacks. They focus on strengthening their aftercare support and increasing availability to
customers, which are BAEMIN and Gofood’s weaknesses. In the meantime, BAEMIN and
Gofood offence in different ways. BAEMIN highly concentrates on branding. Thus, they
tend to make the most use of social media to launch their outstanding campaigns. Gojek
picks frontal attack and counter offensive strategies. As BAEMIN once set up a billboard
with the copy “I will order on BAEMIN what you want to eat”. Next to it, Gojek installed a
billboard that said, “No matter what I eat, I just need Gojek to delivery”. Responding to
Gojek’s attack, BAEMIN stayed silent and kept investing in its branding positioning
process.
27
6 CONCLUSION & RECOMMENDATION
In conclusion, BAEMIN has done a great job so far. Some of BAEMIN's strengths are an
eye-catching online and offline presence, plenty of promotions being launched throughout
the year, and shipping costs remain the same in the first year and slightly increase by
around 1,000 or 2,000 VND in the nex following year. Furthermore, there are various categories for users to choose food easily. Now, users are able to pick up their orders in case
they prefer to. BAEMIN connects with several Vietnamese banks and e-wallets, allowing
users to flexibly conduct payment
However, to replace Grabfood's leading position in this market, BAEMIN should increase
both suppliers and riders. Customers are expecting to have more options on BAEMIN's
app. The shortage in the number of riders is its biggest weakness. BAEMIN's insufficient
riders cause order cancellations or delayed orders frequently, especially at lunchtime. In
fact, in food delivery industry, delivery time is the factor that affects customer experience.
Even though the riders are friendly and professional, they are just a plus point.
BAEMIN is one of the food brands in Vietnam that launches exceptional marketing campaigns. Additionally, they excellently exploit social media channels, such as Facebook,
Tiktok and Youtube. They plan to partner with famous Vietnamese influencers and then
implement projects with them. The remarkable campaign on Youtube about “Delicious
food within our districts” in 2020 successfully gained 9.5% more app installs. Apart from
BAEMIN, Grabfood is also strongly spending its budget on advertising. Yet, Grabfood has
lesser viral campaigns than BAEMIN. Hence, it is recommended that BAEMIN should keep
investing in marketing.
Food delivery market in Vietnam is extremely potential and exciting. This market is expected to welcome more new brands soon. Consequently, it is crucial for each existing
brand to have suitable strategies and directions early. BAEMIN currently possesses outstanding advantages and opportunities to dominate Vietnam or even the Southeast Asian
market. Nonetheless, the Korean brand also needs to reconsider its weaknesses and challenges from the environment, especially during the COVID-19 epidemic, to design appropriate guidelines and policies for enterprise resources and the current situation.
28
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32
APPENDICES
Appendix 1. Competitor Strategy Profiles
Appendix 2. Definition of marketing concepts
1
Appendix 1. Competitor Strategy Profiles
Table 6. Competitor Strategy Profiles
Level of
Analysis
Analytical
Tool
(Note)
Ansoff
Matrix
Growth
Strategy of
SBU
Strategic Options
Market Penetration
Product
Development
Market Development
Diversification
Competitive
Strategy of
SBU
Value
Frontier
Superior Customer
Value (Differentiation)
Premium
Differentiation
Econcomy (Cost
Leadership)
Inferior
Customer
Value
Approach to
Internationalisation
Specific
Marketing
Strategies
International
Multinational
Global
Transnational
Timing
Specific
Marketing
Strategies
First-mover
Marketing
Approach
Specific
Marketing
Strategies
Undifferentiated
Market
Selective
Specialisation
Segment
Specialisation
Product
Specialisation
Full Market
Coverage
Offensive
Strategy
Specific
Marketing
Strategies
Frontal Attack
Flanking
Encirclement
Bypass
Guerilla
Defensive
Strategy
Specific
Marketing
Strategies
Position
Preemptive
Flank
Positioning
Counter
Offensive
BAEMIN
Grabfood
Shopeefood
Gojek
Follower
Strategic
Withdrawal
2
Appendix 2. Definition of marketing concepts
Table 7. Definition of marketing concepts
No. Marketing Concepts
1
Brand Image
Definitions
In 1993, Keller defined brand image as “a set of perceptions about a brand on consumer’s memory”. Kotler
(2001) also written that brand image is “a set of beliefs,
ideas and impression that a person holds regarding an
object.”
2
Service
The American Marketing Association explained that services are “activities, benefits and satisfactions which are
offered for sale or are provided in connection with the
sale of goods.”
3
Number of vendors
The quantity of good restaurants that partner with food
delivery companies
4
Speed of delivery
Speed of delivery or Delivery speed is a value-added
service that reflects the time between placing an order
and receiving it at the customer’s living address
5
Cost effectiveness
Here in this context, cost effectiveness means the lowest pricing with high quality
6
Market Development
The product has already been existing in other markets,
but the company develops it in a completely new market
7
Market Penetration
A company can grow by selling more of the products
which have already been existed in that market
8
Multinational
Multinational strategy means that a company standardise its products and services worldwide to gain profit.
Customers are more concerned about the price. Cross-
3
cultural communication in the global market is less emphasised.
9
First mover
Here in this context, first-mover strategy refers to the
first ones to establish in Vietnam market. First movers
set the benchmark for the market.
10
Follower
Followers are latter operators in the competition. They
leverage off the research that has been invested by the
first movers. Thus, they can quickly adapt to the emerging market while saving costs for R&D activities
11
Product specialisation
A firm focuses its marketing or branding on a specific
product or product line. With this technique, the company would target a particular market rather than the
mass market
12
Selective specialisation
A company uses product specialisation to target two or
more customer segments. In other words, the brand has
more than just one audience group, but its marketing
strategy still does not focus on the general public
13
Frontal attack
A frontal attack strategy means that a company imitates
its competitors' strengths and provides customers with a
wide range of substitute products. This tactic is considered as a challenge to the leading companies in the
market
14
Flanking attack
A flanking attack strategy means that a company focuses on competitors' weaknesses with the aim of removing them and gaining market share
15
Guerrilla
A guerrilla attack strategy is a series of small tactics that
a company conducts to dislodge its competitors from the
market. When implementing this strategy, the company
4
makes the most of social media or applies lots of price
promotions
16
Position
Position defense is to maintain the company's position
within the consumer's consciousness to make the brand
reliant on any attack strategy.
17
Counter offensive
A counter-offensive attack means that a company waits
for the competitors to make their moves first, then the
company executes its marketing attack directly on its
competitors.