The ride-hailing market in Vietnam is currently experiencing fiercer competition than ever before as numerous players have entered the market, providing customers with a wide array of options.
Since Grab's entry into the market in 2014, the Vietnamese ride-hailing sector has grown significantly over the past decade.
During this period, many players have entered and exited the market. Recently, the market has seen a shift where not only major foreign players but also local companies such as Xanh SM and Be are competing for a share of the market.
According to market researchers, Grab has maintained its position as the largest player; however, Vietnamese companies such as Xanh SM and Be have also grabbed market share.
In a market research study titled "Motorbike Ride-Hailing Apps Popularity 2024" by Q&Me, which delves into the behaviour of users on ride-hailing apps focusing on motorbike ride-hailing services, it has been confirmed that Grab remains the most popular and holds the top position, while Gojek's share and that of others are being challenged by Be and Xanh SM.
The study also revealed that almost all ride-hailing app users are aware of the top four major brands. Grab ranks as the top service provider with 42 percent of users selecting this brand, followed by Be at 32 percent, due to its popularity among the youth aged 16-23, and Xanh SM with 19 percent.
While Grab maintains a leading position in both HCMC and Hanoi, Be is consistently competing for its position in both cities.
Compared with a Statista study in 2021, there have been significant changes.
In 2021, 60 percent of Vietnamese users regularly utilised Grab's motorbike-hailing service, an 18 percent increase from the previous year. During the same period, 19 percent of users frequently used Gojek, and 18 percent opted for Be's motorbike-hailing service regularly.
These figures show that despite arriving later than industry giants Grab and Gojek, both Be and Xanh SM exhibit strong competitive capabilities and pose as formidable opponents for foreign ride-hailing companies operating in Vietnam or seeking to enter the market.
While the gap between Grab and its competitors is shrinking as Be and Xanh SM see a significant increase in user numbers, Grab remains the dominant market leader in the Vietnamese tech-savvy ride-hailing sector at present.
Motorbike ride-hailing remains the most common service on ride-hailing apps, with users in Hanoi and HCMC using it primarily for daily commutes, leisure activities, and after consuming alcoholic beverages. For events such as weddings, users prefer to book cars. The top reasons for choosing a motorbike ride-hailing app are easy availability, competitive prices, and attractive promotions. A wide driver network, driver attitude, and waiting time also influence which app users prefer for booking motorbike rides.
The cost of booking rides via apps makes up nearly 50 percent of users' total monthly travel expenses, with a significant portion spent on motorbike ride-hailing services, particularly Be and Gojek. Overall, most users express satisfaction with the service and do not intend to change their frequency of use in the near future.
Fierce competition in car ride-hailing
The intense competition is not limited to the motorbike ride-hailing market; it extends to car ride-hailing services as well.
Competition between traditional taxi companies and modern ride-hailing services continues to escalate.
Both sides have enhanced their service quality to compete with each other. Traditional taxi companies have collaborated to establish co-operatives to reduce costs, develop their apps, and introduce online payment services to attract young customers. Furthermore, commitments such as not increasing fares on rainy days have been made, and services have been enhanced.
The market has become even more competitive with the introduction of electric taxis.
Xanh SM is a taxi service under Vingroup's GSM company. According to a report from Bloomberg Businessweek Vietnam, after a year of operation, the company boasts 27,000 electric cars with plans to increase this number to 50,000 within two years.
GSM has also formed partnerships with small and medium-sized taxi companies like Lado Taxim, Mailove and Taxi Xanh Sapa. In Phú Yên Province, Let's Go Taxi was launched in May with competitive pricing, utilising electric cars from a well-known Chinese company.
As people increasingly opt for a "green" lifestyle, electric taxis are expected to become a trend in the near future.
