Foodpanda, a global online food ordering service, sent a notice on Wednesday to its restaurant partners in Vietnam saying that it will shut down all business activities in the country.
The company considers the Southeast Asian nation a potential market with consistent development in the online food ordering industry compared to other markets it operates in, said Truong Duy Linh, Foodpanda’s country general director in Vietnam.
However, due to the economic crisis and cessation of financial support from investors, Foodpanda has to stop all business activities in the Vietnamese market after three years of operation, the general director explained.
Five days following the announcement, the company will begin closing all of its services in the country, primarily its website, according to the notice of termination signed by general director Linh.
The announcement has shocked many domestic start-up businesses specializing in online food ordering services, as Foodpanda’s parent company Rocket Internet confirmed in March that it had allocated US$110 million in new investment for the online food ordering subsidiary.
The fund was then said to be aimed at beating other competitors in the Vietnamese market, including Vietnammm, Deleverynow, Lozi and others.
Foodpanda is a global mobile food delivery marketplace headquartered in Berlin, Germany with operations in 40 countries including India, Russia, Brazil, Mexico, Singapore and others.
The company, which is a subsidiary of Rocket Internet, has established business partnership with over 38,000 restaurants in 500 cities worldwide.
The business launched its operation in Vietnam in 2012 and has set up connections with more than 1,000 restaurants, including many well-known brands, to the food lovers in the country, such as KFC, Burger King, and Baskin Robins.
Rocket Internet is a German Internet firm founded by three brothers in a family, Marc, Oliver and Alexander Samwer in 2007.
The company, which builds online start-ups and owns shareholdings in various models of Internet retail businesses, has been running several e-commerce models, including online shopping stores Lazada, Zalora and food ordering site Foodpanda.