Latest news with #LineManWongnai
Bangkok Post
21-07-2025
- Business
- Bangkok Post
Eateries hit by plunging sales, rising costs
The Thai restaurant industry is facing significant headwinds in the current economic climate, with many businesses reporting a substantial drop in revenue amid increasing operational costs. Meanwhile, online food delivery continues to increase, with penetration rising from 25% in 2023 to 29% in 2025, but this has still not been sufficient to offset the decline in restaurants' offline revenue, according to Line Man Wongnai. According to Kasikorn Research Center, the food and beverage business is expected to experience slower growth in 2025, attributed primarily to Thailand's subdued economy. The total market value is projected to reach 646 billion baht this year, representing 2.8% growth from 2024. This figure marks a downward revision from an earlier forecast of 4.6% growth to 657 billion baht. Yod Chinsupakul, chief executive of Line Man Wongnai, said local restaurants are experiencing a tough time due to declining sales via the offline channel and rising costs in terms of raw materials and labour. The Thai Restaurant Association also reported a decrease in daily revenue for Thai restaurants of more than 50%, with income dropping from 50,000 baht to 20,000 baht a month. According to Line Man Wongnai, offline same-store sales saw a year-on-year drop of 14% from 2024 to 2025, compared to a 3% drop observed between 2023 and 2024. This suggests that restaurants need to open new branches to compensate for falling sales at existing locations. Raw material prices have increased by 25%, and labour costs are up by about 5%. The decline in tourist numbers, particularly from China, who are known for their high spending on food, has heavily impacted the restaurant sector. New restaurant openings have also been decreasing annually, from roughly 96,000 in the first half of 2023 to 63,000 in 2024, and further down to 44,000 so far this year. Currently around 50% of new restaurants are closing within one year of opening. According to a Line Man Wongnai survey of 1,800 respondents, customers are seeking speed and convenience in terms of service delivery. A total of 72% are looking for diverse ordering channels, while 66% prefer multiple payment methods such as QR codes, debit/credit cards, and e-wallets. Around 60% prioritise rapid service, including order placement, food delivery, and payment processing. Mr Yod said restaurants should adopt a four-pronged approach to not only to survive but thrive. First, local food operators should embrace technology to help increase sales and cut costs. While their offline sales have declined, the penetration of online food delivery services is projected to continue to grow to 29% in 2025, from 25% in 2023. This suggests the online channel can partially offset the declining offline revenue, Mr Yod added. In addition, food operators need to implement digital ordering systems and diverse digital payment methods. Non-cash payments show an average transaction size 32% higher than cash payments. Digital payment penetration in Thailand has risen from 36% to 50% in the last two years, and is expected to continue growing. Second, restaurants should adopt an expansion-oriented business model. The market trend indicates that quick service restaurants (QSRs), where customers pay before eating, are growing, while full-service restaurants are seeing a decline. Successful large brands in Thailand, such as Suki Teenoi, have demonstrated the viability of rapid branch expansion. "This shift necessitates robust management systems and efficient operations to ensure consistency across multiple locations," said Mr Yod. Third, restaurants should develop strong data and financial records. A significant hurdle for Thai restaurants is that 96% operate as sole proprietorships, with only 4% registered as legal entities. This often means a lack of proper accounting and financial records. Having accurate data and well-maintained accounts is crucial for accessing funding from financial institutions, especially for small businesses looking to adopt new technologies or expand. Fourth, government intervention is seen as essential, with different levels of support needed for businesses of varying sizes. Policy and tax incentives could facilitate overseas expansion or entry into capital markets that can support large restaurants. For medium-sized restaurants, the co-payment scheme, similar to the kind applied to the tourism sector, could significantly boost restaurant sales and growth. For small restaurants, direct state support to eateries, such as tax incentives for purchasing business tools and software-as-a-service, would provide a crucial foundation for their operations. "The Thai restaurant industry is at a crossroads. By strategically adopting technology, focusing on scalable business models, improving financial data management, and securing tailored government assistance, restaurant owners will be able to navigate the current challenging environment and position themselves for future growth," said Mr Yod. While food restaurants' sales drop, the coffee sector continues to grow, especially within the Affordable Speciality Coffee segment -- defined as coffee priced under 100 baht per bill. This segment has become the fastest-growing market, with sales rising by 46% in Bangkok and 19% in other provinces. Although the number of new coffee shops opening this year fell from 7,000 in the first half of 2024 to 5,000, coffee businesses are showing higher first-year survival rates than general restaurants. The first-year closure rate for coffee shops stands at 43%, compared to 50% for restaurants. The matcha market also continues to expand, with existing matcha shops reporting 28% sales growth. As for delivery channels, coffee sales on Line Man have grown by 23% year-on-year, with an average of 22% of coffee shop revenue now coming from delivery, underscoring the importance of omni-channel access for customer engagement.
Business Mayor
30-04-2025
- Business
- Business Mayor
Line Man Wongnai to invest B10bn in tech, buy 2 startups
Mr Yod said the company is planning to acquire 1-2 tech startups. Line Man Wongnai plans to invest 10 billion baht in technology over five years, mainly on artificial intelligence (AI), while it wants to acquire 1-2 tech startups. Yod Chinsupakul, chief executive of Line Man Wongnai, said at the AWS Summit 2025 on Tuesday that the company continues to invest in technology and that the amount should total 10 billion baht over five years, or 2 billion baht a year. The company wants to continue its innovation amid intense market competition, aiming to elevate the customer experience and achieve cost optimisation, he said. The investment will focus on generative AI (GenAI) to improve customer services and make personalised recommendations, said Mr Yod. Over the past five years, the company has invested 8 billion baht in technology, mainly for a cloud computing system and AI. Line Man Wongnai has more than 100 AI engineers and developers, with 500 technicians working to make the company more adaptive and able to launch new services, he said. 'We use AI to manage customer orders for our drivers and restaurants, and to optimise the cost of delivery,' said Mr Yod. With the Amazon Web Services cloud service, the company can support more than 1 million on-demand transactions daily. He said the online food delivery segment will become a duopoly with an eased price war within a year, shifting to competition over quality once Foodpanda exits the market next month. Line Man Wongnai is not interested in buying Foodpanda, said Mr Yod. He said if Yip In Tsoi, which operates the Robinhood app, acquires Foodpanda then this would not create a significant impact as both are small players. Last week Delivery Hero, the world's leading delivery platform, announced that Foodpanda, its Asia-based business, will stop operating its food and grocery delivery services in Thailand on May 23. A Yip In Tsoi source who requested anonymity said the company is interested in acquiring the Foodpanda app and is evaluating its business potential. According to Singapore-based research firm Momentum Works, Thailand's food delivery market in 2024 tallied US$4.2 billion, with Grab claiming a market share of 46%, Line Man Wongnai 40%, ShopeeFood 7%, Foodpanda 5%, and Robinhood 2%. Mr Yod said the price of online food delivery services has not spiked, despite fewer players. He said Line Man Wongnai plans to acquire 1-2 startups this year. Moreover, its merchant solutions expand the customer base beyond restaurants to tap retail, services and cosmetic segments, said Mr Yod. The company should break even this year and wants to launch an initial public offering in 2026, he said. Line Man Wongnai's online food delivery business generates 80% of its total revenue and has a 44% market share. Its LinePay service has high growth potential, while its ride-hailing business aims to become profitable within 12 months, said Mr Yod. He said the fintech market is valued at 2 trillion baht, or 10 times the food delivery market. The company aims to become a key player or the next unicorn in fintech within 5-7 years, Mr Yod said. The company plans to develop a 'buy now, pay later' service in the near future, he said.
