Vietnam's ride-hailing market to reach $880,000 in 2024

March 19, 2024 | 10:27
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Vietnam's ride-hailing market size is forecast to hit $880,000 in 2024 and $2.16 billion by 2029, growing at a compound annual growth rate (CAGR) of 19.5 per cent, according to Mordor Intelligence.
Vietnam's ride-hailing market to reach $880,000 in 2024

Wih Vietnam’s rapidly growing urban population, the lack of public transportation options, and increasing traffic congestion, the demand for private modes of transportation has gone up in recent years. Consumers’ increasing preference for private transportation arises mainly from convenience, and the growing number of tourists in Vietnam serve as major determinants for the growth of the ride-hailing market in Vietnam.

Additionally, the rise in travel and tourism and the emergence of a young and tech-savvy population have further fuelled the adoption of ride-hailing services. Platforms like Xanh SM, Grab, and Gojek are emerging as dominant players in the digital side of Vietnam’s ride-hailing market.

Passenger cars will continue to be the largest segment because they offer a comfortable and personalised mode of transportation, catering to the preferences of Vietnamese consumers. The growing urban population and increasing disposable incomes have led to a rise in demand for convenient transportation options, particularly among urban commuters and young professionals.

In 2023, Vietnam’s internet coverage reached nearly 80 per cent. Internet usage in Vietnam is predominantly mobile-based, with a high smartphone penetration rate. The increasing penetration of smartphones and mobile apps aids consumers in accessing ride-hailing services and booking passenger cars on-the-go.

Modor Intelligence reports that Ho Chi Minh City was the largest market for ride-hailing in Vietnam. Over the past decade, app-based driving services like ride-hailing and deliveries have become integral to business, employment, and daily life in Ho Chi Minh City. The city has the largest population in Vietnam, which offers a significant consumer base for ride-hailing companies.

The Vietnamese government is encouraging the adoption of electric vehicles, which is a pivotal measure to combat transport challenges. The government also aims to reduce greenhouse gas emissions, alleviate traffic congestion, and improve overall urban living conditions. These efforts mitigate the effects of climate change and create a conducive environment for expanding ride-hailing services in the city.

Overall, the Vietnamese ride-hailing market is moderately consolidated, with players like Grab Holdings Inc., Xanh SM (GSM JSC), Be Group JSC, Go-Viet, and FastGo in Vietnam. The greatest threat to Grab Holdings Inc. in the future may come from Xanh SM, Vietnam's first-ever pure electric taxi company.

Xanh SM has been aggressively expanding its market foothold due to its strong partnership growth. The company has partnered with several taxi firms across Vietnam, including Lado Taxi, Son Nam, Thanh Ha Transport, ASV Airport Taxi, En Vang, and Taxi Xanh Sapa.

Several players in the market are engaged in mergers, strategic partnerships, and new product and service launches to stay ahead of the competition. In July 2023, Grab Holdings declared its intention to acquire the entire shareholding of Trans-cab Holdings. This acquisition, encompassing Trans-cab's taxi and car rental operations, maintenance workshop, and fuel pump activities, was executed through Grab's subsidiary.

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By Thanh Van

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