Vietnam is GrabFood's second-fastest growing market in Southeast Asia

March 14, 2019 | 08:00
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Just eight months after the official launch, Vietnam has become the fastest growing market in Southeast Asia of GrabFood, outside of Indonesia. What are the reasons behind this tremendous achievement?
vietnam is grabfoods second fastest growing market in southeast asia
Vietnam is the second fastest growing market of GrabFood in Southeast Asia

By the end of September, GrabFood has been officially operating in Vietnam for eight months. However, the latest figures released by Grab recently showed that GrabFood has become one of the leading food delivery services in the country.

GrabFood has been continuously expanding to 15 cities and provinces so far. The number of merchant-partners has increased ten-fold and the average delivery time reduced to 20 minutes per order. At the moment, almost no player in the market could boast similar successes. This success made Vietnam GrabFood’s second fastest-growing market in Southeast Asia, outside of Indonesia.

Explaining this, it can be said that almost all important factors for a newcomer to rise and take the lead converge in GrabFood, including the maturity of the market, as well as internal forces.

Seizing market opportunities

Vietnam’s young population gathering in major urban cities, in addition to the high smartphone usage rate, have pushed the online food delivery market to the point of explosion. Luong Duy Hoai, founder of Giao Hang Nhanh, stated that e-commerce, convenience stores, and instant services, including food delivery services, will be the top three segments which will continue to rocket in the future thanks to this context.

A recent research by GCOMM also showed that 99 per cent of respondents said that they used online food delivery services at least 2-3 times a month. Remarkably, up to 39 per cent ordered food via a mobile app 2-3 times a week. It can be seen that the market has formed a group of customers who habitually use mobile apps to order food almost everyday. This is the right time for online food delivery services.

However, it is still rare to produce the results GrabFood did. According to a research conducted by Kantar Worldpanel in January 2019, GrabFood was rated as the most used food delivery service in Vietnam (Ho Chi Minh City and Hanoi) with 68 per cent of respondents agreeing with this option. Now (Foody) came in second with 19 per cent, followed by Go-Food with 1 per cent, and the rest are other services.

vietnam is grabfoods second fastest growing market in southeast asia
GrabFood ranks fisrt about the customers' satifaction on time delivery

Strategy to dominate

While established competitors are developing multiple services from food delivery, GrabFood draws advantages from its mother company Grab – the biggest on-demand ride-hailing service in Vietnam. This helps GrabFood take advantage of a wide driver-partner and customer network.

Thanks to these two factors, besides the rapid expansion, GrabFood also received secondary advantages such as fast delivery time as well as a significant increase in incremental revenue from joining the platform.

“A massive number of driver-partners enables our fast delivery speed. With the mechanism that drivers-partners make orders directly at stores, we can receive order and deliver dishes in a few dozen minutes,” said a GrabFood’s representative.

With the strategy of satisfying Vietnamese consumes’ taste, GrabFood partnered up with popular local restaurants to add delicious dishes to its menu, as well as deliver consumers the best quality at the highest speed. At present, GrabFood offers a whole range of exclusive items on its menu from well-known restaurants under the “GrabFood Signatures” tag.

In addition, Grab is discussing a partnership with the Vietnam Food Administration for a promotion campaign of food safety to restaurants, food stalls, driver-partners, as well as customers who show increasing demand for food safety.

Becoming GrabFood’s second-fastest growing market has proved the attractiveness of the Vietnamese online food delivery market. However, competition is fierce to match, with competitors falling behind and disappearing by the day, as the natural selection leaves only the most methodically-invested brands with the most fitting strategies.

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