The Vietnamese ride-hailing market is experiencing a period of strong growth and is forecast to continue to grow rapidly in the coming years. The size of the Vietnamese ride-hailing market is estimated to reach 1.17 billion USD in 2024 and is expected to reach 3.19 billion USD in 2029, with a compound annual growth rate (CAGR) of 22.10% during the forecast period (2024-2029).
The market has recovered quickly from the impact of the COVID-19 pandemic and witnessed a change in people's travel habits. According to the analysis, the increase in health concerns has caused many people to switch from using public transport to private vehicles, positively affecting the ride-hailing market.
Competition in this market is also very high, with the presence of many big names and new technology-based ride-hailing services. GrabTaxi Holdings Pte Ltd leads the market with a large market share, but the rise of rivals such as Be Group JSC and Xanh SM shows a vibrant race. Be Group, with cooperation from GSM and financial partners, is expanding its network and promises to become a formidable competitor.
One of the prominent newcomers is Xanh SM, a member of Vingroup. The service quickly captured 20% of the market share after 1 year of launch, even with ambitions to expand globally in the future. The development of Xanh SM, along with the cooperation between Be Group and GSM, shows that the Vietnamese ride-hailing market is not only attractive to domestic businesses but also attracts the attention of international companies.
Below is a closer look at the prominent businesses in the Vietnamese ride-hailing market, which are the “ride-hailing apps” that are always present on every Vietnamese user’s smartphone.
Grab – Striving for innovation with AI
As the leading ride-hailing and delivery company in Southeast Asia, Grab is constantly innovating and delivering the best value to its customers. Grab has successfully applied advanced technologies such as AI and automation to its delivery process, thereby improving service quality and user experience.
Thanks to generative AI, language barriers can be eliminated. In the future, the application will support voice and text, making every interaction with the application smoother. Customers will benefit from intelligent chatbots that can quickly grasp problems and provide instant solutions.
For driver partners and users, Grab is also improving GrabMaps digital maps through OpenAI's computer vision technology, enhancing automation and data quality from images.
Grab’s 2024 revenue forecast shows solid growth, with actual figures surpassing analysts’ estimates. In its fourth quarter 2023 business report, Grab recorded a profit of $11 million, up from a loss of $391 million in the same period in 2022. According to Grab, the results were mainly due to improved EBITDA, rational changes in investments and reduced stock-based compensation expenses.
Notably, Grab has achieved its first-ever adjusted core profit, and is expected to continue to grow in the coming years, thanks to investments in premium services for its ride-hailing and delivery services that can generate high-value transactions.
Grab also demonstrates flexibility in providing service options, with prices that suit the diverse needs of customers. From GrabFood, GrabMart to GrabBike and GrabCar, each service is designed to bring maximum convenience to consumers.
The partnership with OpenAI also demonstrates Grab’s commitment to pioneering new technologies that not only deliver significant improvements to customers but also invest in the long-term growth of the business. Grab is on its way to becoming not just a transportation super app but also an exemplary technology partner in the region.
Be – Affirming position in the transportation industry
In the fiercely competitive ride-hailing industry, Be Group has emerged as a phenomenon, demonstrating constant innovation and a commitment to improving the customer experience. With a new investment of up to VND 739.5 billion, Be Group has expanded its ride-hailing, delivery, and financial services, aiming to serve 20 million users.
Not only that, Be also cooperates with BusMap, creating a diverse and convenient travel solution, allowing users to book Be cars directly on the application. The combination of these two applications makes daily travel fast and optimal, reflecting Be's commitment to providing comprehensive services.
While its main competitor Grab, despite being the market leader, is still struggling to make a profit, Be Group has shown steady progress through expanding its partner network and developing new products to meet the diverse needs of users.
Since 2022, beDelivery has quickly grasped market trends and taken the lead with low-cost 1-hour and 2-hour delivery services. Reaching the milestone of 400,000 drivers, beDelivery orders only take an average of 30 minutes within a 10km radius to be delivered to customers, far surpassing competitors in the industry.
With continuous innovation and a smart development strategy, Be Group not only improves service quality but also aims to provide a different, truly engaging experience for customers.
Green SM – “Green Brand” breakthrough in a field with many competitors
When it comes to reshaping the transportation service industry in Vietnam, it is impossible not to mention Xanh SM. Within just 7 months since its launch, Xanh SM has risen to occupy 18.17% of the market share, challenging even the long-standing names in the market. What has made this incredible breakthrough?
Xanh SM has redefined the consumer travel experience through constant innovation. Not only introducing green, environmentally friendly electric motorbikes, they also offer competitive fares, no “shock price increases” during rush hours or bad weather, and provide 5-star service with professional service attitude from the driver team. This is a testament to the focus on service quality and customer satisfaction, with nearly 21% positive responses from users on forums and social networks.
The strong response from the social media community is evidence of the rapid market acceptance of Xanh SM. Data technology company Kompa Group recorded 41,010 discussions mentioning Xanh SM Bike in just 2 months, with more than 175,000 interactions, where TikTok and Facebook dominated with 52.79% and 42.45% respectively. Notably, the tone of these discussions was mostly positive and neutral, accounting for 95.39%.
Not only that, Xanh SM also created a breakthrough in cost by providing a price that does not include additional charges, helping customers easily estimate the cost of each trip. According to the results of a practical test, Xanh SM Bike provided the lowest fare, only 30,000 VND for a standard route, lower than competitors in the market.
Xanh SM is not just about achieving impressive market share numbers, they also have a vision for the future. With the goal of being “number 1 in the hearts of customers”, they have been constantly expanding their services and improving quality, from providing electric taxis to services such as Xanh SMBike, Xanh Express, and the Xanh SM Platform.
It is the innovations and relentless determination of Xanh SM that have helped this power company become not only a transportation service provider, but also a symbol of breakthrough and pioneering in the green transportation industry, towards a more sustainable future for Vietnam. Xanh SM has not only innovated the means of transportation, but also affirmed a new position on the map of technology transportation services.
Conclude
The market is competitive, challenges still exist. Pricing strategies, driver benefits and preferential policies are important factors that determine the success or failure of businesses, regardless of whether they are newly established or have been operating for many years. Ride-hailing companies need to adjust their business strategies to optimize costs and increase competitiveness.
The Vietnamese ride-hailing market is at a juncture worth observing, with opportunities and challenges intertwined. The diversity of services and the agility in adapting to the market will determine who will lead the race in transportation technology in Vietnam.
