Food
Ride hailing firm Go-Viet confirmed last week that general director Nguyen Vu Duc and deputy general director Nguyen Bao Linh have quit their positions. Two days after Go-Viet’s announcement, Nguyen Xuan Truong, CEO of local delivery service Ahamove, resigned from the position he had held for 3.5 years. His departure came after Tran Duc Huy, marketing director of the company, quit in March.
Industry insiders say that senior leaders of eLogistics firms have to leave if they are not able to satisfy drivers, customers and investors happy at the same time, which means maintaining growth in a highly competitive market.
A senior official of an eLogistic company who asked not to be named said that Vietnamese managers face difficulties in this industry because it is new to most of them.
These leaders need to overcome challenges in technology application, the country’s transport infrastructure and the legal framework. Besides, it becomes increasingly difficult to maintain growth when the number of partner drivers increases.
“Drivers are called partners because they do not technically work for the company, that’s why the company needs to make both partners and customers happy while making the company grow at the same time,” the official told.
The leaders who resigned might have done so because of the internal challenges they faced when their startups’ scale expanded, experts say. Nguyen Phuong Mai, managing director of online recruitment firm Navigos Search, said that some leaders want to have the same freedom they had when they founded the company with a group of friends, which is difficult in the later stages when they have to compromise with investors’ demands.
Strong competitors in the market are another possible reason for the executives quitting, although they do not publicly admit this.
eLogistics companies have to compete with each other in “burning” money to attract drivers and customers. When asked the biggest challenge an eLogistics company CEO faces, Nguyen Huu Tuat, CEO of FastGo, answered: “Money.”
At Go-Viet, Duc and Linh’s resignations came at a time when the company was stagnating in all its services – ride-sharing, food delivery and package delivery. Since the start of this month, the company has cut its drivers’ revenue to 20 percent, prompting many drivers to consider switching to another ride-sharing service.
Meanwhile, its main competitor, Grab, has been expanding its food delivery service and its cashless payment service GrabPay by Moca, which now has new features allowing users to pay their electricity, water and phone bills.
Tuat said: “An eLogistic startup might have glory today and die tomorrow because the larger the company is, the more money you have to burn.”
A report by Google and Singaporean investment firm Temasek valued Vietnam’s online and food delivery market at $500 million last year; and forecast that it would reach $2 billion in 2025.
