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Ride-hailing rookies face uphill climb

Rookies in Vietnam's ride-hailing market are unlikely to make their presence felt any time soon with established early birds constantly strengthening their foothold.

Ngày đăng: 17 tháng 9, 2021
Cập nhật: 19 tháng 1, 2023
Lượt xem: 320996603
Nguồn: vnexpress

viApp this month became the latest Vietnamese ride-hailing company to enter the market. Based in Ho Chi Minh City, the company plans to operate nationwide with services covering motorbikes, cars, taxis and trucks.

The newcomer targets 300,000 app downloads in the first three months and to eventually claim 20 percent of the ride-hailing market.

Another Vietnamese company, GV Taxi, introduced its services in July and has set 8,000 driver partners and 60,000 daily trips as its preliminary target.

While the newcomers have an eye on a bigger share of the $500-million ride-hailing pie in Vietnam, market data shows they have their task cut out. Last year, Singapore’s Grab dominated the market with a 73 percent share, followed by Vietnam’s Be with 16 percent and Indonesia’s Gojek (formerly GoViet) with 10 percent.

There was only 1 percent for the remaining companies, which included several names like FastGo, Tada, Vato and Mygo, all of whom have scant visibility on the streets dominated by the green uniforms of Grab and Gojek, and yellow of Be.

The new players, however, are making strong efforts to carve out some advantages.

viApp is focusing on discounts to attract new users, with prices as low as VND1,000 (4.3 U.S. cents) for a motorbike trip under five kilometers. To recruit more drivers, it offers a reward of up to VND200,000 for each driver who successfully refers a new one.

The company also installs a meter on each car so drivers can pick up passengers on the street without the need of an app. So viApp wants to have share of both the ride-hailing and traditional taxi markets.

GV Taxi, another newcomer, is following the path of earlier ride-hailing companies by offering motorbike and car services, with plans to operate food and good delivery and truck hailing next year.

Although a deep pocket plays a key role in claiming a market share in this industry, the financial capabilities of these companies remain unclear as they have not revealed who their investors are.

viApp has only said it is backed by a domestic investor who has poured money into several startups.

Meanwhile, the existing market dominants have been keeping themselves busy with measures to get ahead in the race.

Grab, with ride, food and delivery services, recently began offering a shopping service in which a driver will go to a supermarket and pick up items for the customer and deliver them to their doorstep.

It also allows customers to hire a driver by the hour just like other rental services. Grab Vietnam managing director Nguyen Thai Hai Van said this was part of a strategy designed to serve specific demands in the Vietnam market.

Be has also been active since the beginning of the year by partnering with e-wallets MoMo and SmartPay. It has also introduced taxi and shopping services, and allows customers to sign up for subscriptions for regular travels.

The company had achieved over 8 million downloads by the end of September. It has over 100,000 partner drivers with 350,000 trips requested per day in 10 localities.

CEO Nguyen Hoang Phuong had earlier said that Be was willing to compete even if Grab and Gojek merged into a single service.

Gojek, with a new country general manager starting in July, has 150,000 partner drivers and 80,000 partner eateries. The company, however, has not fulfilled its promise yet to provide car services and cashless payment, which could make it less competitive than the two market leaders.

Vietnam’s ride-hailing market was the fourth largest in Southeast Asia last year behind Indonesia, Singapore and Thailand, according to a report by Google, Singaporean sovereign fund Temasek and U.S. management consultancy Bain.

The market could grow 40 percent annually to reach $4 billion by 2025, it added.

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