Why Vietnam is the second fastest growing market of GrabFood in South East Asia?

March 15, 2019 - 14:50

Just eight months after the official launch, Vietnam has become the fastest growing market of GrabFood in South East Asia, outside of Indonesia. What are the reasons behind such a tremendous achievement?

Just eight months after the official launch, Vietnam has become the fastest growing market of GrabFood in South East Asia, outside of Indonesia. What are the reasons behind such a tremendous achievement? 

By the end of September, GrabFood has officially operated in Viet Nam 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 Vietnamese market.

For more than half a year, GrabFood has continuously expanded and set its footprint to 15 cities and provinces in total. The number of merchant-partners has increased 10 times and the average delivery time reduced to 20 minutes per order. At the moment, almost no player in the market could achieve both successes as the same time like GrabFood.

Explaining this, it can be said that almost all important factors for a newcomer in the market to rise and take the lead converge in GrabFood's case. Those factors are the maturity of the market, correlating with competitors, strategies and internal forces.

Seize market opportunities

The young population of Vietnam, centralised in major urban centres, in addition to the high smartphone usage rate have pushed the online food delivery market to the point of explosion. Mr Luong Duy Hoai, Founder of Giao Hang Nhanh, stated that e-commerce, convenience stores and instant services including food delivery will continue to grow in the future thanks to this context.

Recent research by GCOMM showed that 99 per cent of respondents said they used online food delivery services at least two to three times a month. Remarkably, up to 39% of them ordered food via mobile apps two to three times a week. It can be seen that the market has formed a group of customers with the behaviour of using mobile apps to order food almost everyday. This is the right time for online food delivery service.

Vietnamese consumers are increasingly interested in food delivery service

 

However, there is rarely a service that gains such impressive success as GrabFood did. According to research conducted by Kantar in January 2019, GrabFood was rated as the most often used food delivery service in Viet Nam (Ho Chi Minh City and Ha Noi) with 68 per cent of respondents agreeing with this option. Now (Foody) came in second place with 19 per cent, followed by Go-Food with 1 per cent.

Strategy to dominate

It can be said that the growth of GrabFood to the leading position is mainly thanks to its rapid dominance strategy. GrabFood jumped into the food delivery market when there were not many strong competitors

While some well-established competitors are following the orientation of developing multiple services with food delivery as the foundation, GrabFood has advantages from its parent company, Grab, with the firm base of the biggest on-demand ride-hailing service in Viet Nam. This helps GrabFood take advantage of Grab’s wide driver-partner base and customer network. 

Thanks to these two factors, besides the rapid expansion, GrabFood also received secondary advantages which are the fast delivery time as well as the significant increase in incremental revenue of joining the platform. “The massive number of driver-partners is the factor making our delivery speed fast. With the mechanism that driver-partners make orders directly at the store, we can receive orders and deliver dishes in a few dozens minutes,” said a GrabFood representative.

GrabFood is leading in terms of delivery time according to Gcomm’s survey

 

With the strategy of satisfying Vietnamese consumers, GrabFood partnered with favourite local restaurants to create more delicious dishes to deliver with the best quality and high speed. At present, GrabFood is the only service owning many exclusive menu items from well-known restaurants with “GrabFood Signatures”.

In addition, Grab is in the process of discussing partnering with Vietnam Food Administration for propaganda activity of food safety to restaurants, food stalls, driver-partners team and customers. This is considered as a wise move in the context that customers’ demand for food safety is increasing.

GrabFood’s growth in the Vietnamese market has proved that this is an excessively attractive market for online food delivery. However, it is fierce as well. After witnessing the slowing down and disappearance of many competitors, we can conclude that the market is beginning to select the most methodically invested brands with wise strategy.

 

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