A horde of ride hailing players, domestic and foreign alike, are trying to chip away at Grab’s market share in Vietnam. But can they?
Grab is unbeatable?
On June 18 Dealstreetasia reported that ComfortDelgro’s two Vietnamese subsidiaries, Vinataxi and ComfortDelgro Savico Taxi, have announced a merger plan with the aim of competing with Grab.
Many local and foreign ride hailing firms have been trying to take on Grab in Vietnam. Besides traditional taxi companies with their own booking apps like Vinasun and Mai Linh, names include VATO, copycat Grap Viet, Aber, FastGo, MVLchain, Didi, a copycat of the real Didi, and soon, Go-Jek.
A look at the top 10 apps in Google Playstore in Vietnam in the Maps & Navigation category on Appannie gives us a view of how successful these competitors have been so far.
This recent article on news site VnExpress gave an analysis of why it’s so difficult for other ride hailing companies to compete with Grab for a slice of this lucrative pie. Hint: lack of differentiation.
At the moment Grab is the only transport app in Vietnam that has a payment component. It allows people to top up their Grabpay credits using e-wallet Momo, which has about 4000 points of service throughout the country.
It’s difficult to change people’s habits in a country where most of the population is unbanked, but Grab requires its drivers to have a minimum amount of Grabpay credits if they want to accept a ride.
So, do you really want to compete with Grab?
Public transportation in Vietnam is still lacking. A bus in Hanoi is about one half the size of a one-storey bus in Singapore, at a comparable population. And this is how a street looks like during rush hours:
As a result, ride hailing players cannot leave this market alone.
But it looks like the only way to compete against Grab in Vietnam is to burn cash offering incentives for drivers and users. And this is never sustainable.
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