Grab Vietnam chief says company ‘stronger than ever’
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Grab is now “stronger than ever” after 10 years of operations in Vietnam, its country chief said in the wake of competitor Gojek’s exit from the market.
It now has more users and partners than ever, Alejandro Osorio, managing director of Grab Vietnam, said at the company’s recent 10th year celebration.
They number in the millions, and tens of millions of transactions are conducted each month, he said. The Singaporean company entered Vietnam in 2014 as GrabTaxi, and has since grown to offer 15 services in 50 localities.
The ride-hailing market has also seen many other competitors like Uber, Tada and Baemin come and go and now only Be and Xanh SM remain.
Grab remains the predominant player with a two-third market share, according to research firm Q&Me. In the food delivery business, Grab faces competition from Be and ShopeeFood.
Many competitors entered the market and spent a great deal of resources on discounts, but did not achieve sustainability, Osorio said referring to their exit.
Grab on the other hand focused on giving users a number of reasons to open its app, not just for booking a ride, he said.
Food, delivery, shopping, and other services help maintain a loyal group of customers and reduce the cost of acquiring new ones, he said.
This complicated network of services helps create success and is difficult to duplicate, he said.
Grab has also changed its discount strategy, and only has promotions when necessary instead of offering many, he said.
“The Singaporean company entered Vietnam in 2014 as GrabTaxi, and has since grown to offer 15 services in 50 localities.”
It also works with partners such as restaurants and payment companies, and so the discounts come from them and not its pockets, allowing it to maintain a price advantage, he explained.
However, it continues to pour “large investments and efforts” into improving tech solutions, he said, pointing to the new features it has been offering such as personalizing users’ experience and allowing them to order as a group as examples of this.
But what competitors remain are not making things easy.
ShopeeFood is backed by e-commerce giant Shopee, while Be and Xanh SM are widely supported since they are Vietnamese businesses.
Xanh SM’s all-electric fleet also aligns with the government’s plans for future development.
Le Hong Hiep, a fellow at the ISEAS – Yusof Ishak Institute in Singapore, told the Vietnamese media in June that Xanh SM has the potential to threaten the dominance of Grab if it maintains current growth rates.
But Osorio said Grab believes competition is positive and fosters development.
The company is considering helping drivers switch to environment-friendly vehicles, and combining food delivery orders to reduce travel for drivers, he added.
Vietnam’s ride-hailing and food delivery market was estimated at US$3 billion last year and is expected to reach $10 billion by 2030, according to a 2023 report by Google, Temasek and Bain & Co.
Questions & Answers
Q.How has Grab managed to sustain itself in a market where many competitors have failed?
How has Grab managed to sustain itself in a market where many competitors have failed?
Grab focused on giving users multiple reasons to use its app beyond just booking rides, such as food and shopping. This network of services helps create loyal customers and reduces the cost of acquiring new ones, contributing to its sustainability.
Q.What is Grab's current strategy regarding discounts and promotions?
What is Grab's current strategy regarding discounts and promotions?
Grab now offers promotions only when necessary. It also works with partners like restaurants and payment companies, so discounts primarily come from them, allowing Grab to maintain a price advantage without bearing the full cost itself.
Q.Which remaining competitors pose the biggest challenge to Grab in Vietnam?
Which remaining competitors pose the biggest challenge to Grab in Vietnam?
ShopeeFood is a competitor backed by e-commerce giant Shopee. Be and Xanh SM are also significant as they are Vietnamese businesses, with Xanh SM's all-electric fleet aligning with government development plans.
Q.What is the projected growth for Vietnam's ride-hailing and food delivery market?
What is the projected growth for Vietnam's ride-hailing and food delivery market?
The market was estimated at US$3 billion last year. According to a 2023 report, it is expected to reach US$10 billion by 2030, indicating significant future expansion in the sector.
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