As ride-hailing services recover post-pandemic, competition in Vietnam is set to intensify with the news that Be Group has secured a loan from Deutsche Bank.
The loan of at least $60 million will be used to challenge existing market leader Grab, with the possibility of increasing to $100 million.
Be Group expanding
Be Group CEO Vu Hoang Yen told Bloomberg in an interview that the loan will help the company expand its operations in Vietnam, where it already offers ride-hailing, food deliveries and digital banking services. The company also offers telecommunications service bundles, insurance and financial services.
Be Group said in 2020 that it would not take the super app approach. At the time, Be Group positioned itself as an “open platform” and is relying on partnerships to grow its ecosystem.
Grab, meanwhile, is known for its super app strategy, which involves offering a range of services beyond ride-hailing, such as food and package deliveries, mobile payments, and even insurance.
Be Group is currently present in 28 provinces and cities across Vietnam, and aims to increase its active user base to more than 10 million next year. Currently, Be Group’s app has been installed on more than 20 million mobile devices.
Grab on the defensive
With the Deutsche Bank loan, Be Group will be able to intensify its competition with Grab in the ride-hailing sector. This could result in lower prices and more options for consumers in Vietnam.
Meanwhile, with the likes of Indonesia’s Gojek and FastGo Vietnam JSC also making a play in the market, Grab will need to continue innovating to preserve its market-leader status.
Currently, Be Group claims to have a 30-40% market share in Hanoi and 25-35% in Ho Chi Minh City. Meanwhile, Statista estimated Grab to have a 75% market share in the first half of 2020.
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