It is the fourth largest after Indonesia, Singapore and Thailand in Southeast Asia, a study of six markets done by Google, Singaporean state-owned holding company Temasek and U.S. global management consultancy Bain found.
Ride-hailing is the smallest of the four key components of behind e-commerce ($4.6 billion), online travel, which includes flights, hotels and vacation rentals ($4.1 billion) and online media ($2.8 billion).
But it is one of the country’s most promising sectors, and is expected to hit $4 billion by 2025, said the “e-Conomy SEA 2019″ report.
Four years ago ride-hailing players simply focused on providing alternative transportation services through an app, but the sector has since transformed to offer a range of services including food delivery and financial services.
Food delivery has rapidly become a key driver of growth and profitability for ride-hailing giants Grab of Singapore and Go-Jek of Indonesia. They are the current leaders in online food delivery in Southeast Asia’s largest markets.
In Vietnam, Grab and Go-Jek, through local subsidiary Go-Viet, despite being late entrants in the market, are using various measures to attract and capture customers from well-known names such as Now by Foody, Vietnammm and Lala.
The two have been spending a lot of money on promotions across a wide range of food and drinks and signing up celebrities to endorse their services, including pop diva My Tam and football national team goalkeeper Bui Tien Dung and striker Nguyen Quang Hai.
But competition is tough, with some big names like FoodPanda pulling out of the market and some of the most popular apps like Lixi and Lala reporting slow business.
A recent Euromonitor report said the Vietnamese food delivery market was worth $33 million last year and is expected to top $38 million by 2020.
A survey by market research firm GCOMM found 99 percent of respondents using food delivery services at least two or three times a month and 39 percent using them two or three times a week.