Delivery firm Lalamove enters ride-hailing market

The Hong Kong company Tuesday began offering rides by motorbikes and four- and seven-seat cars in Ho Chi Minh City, and customers can book them on the Lalamove app.

Nguyen Hai Dang, managing director of Lalamove Vietnam, said the move into ride-hailing "aims to meet customers’ demand for more cost-effective travel options and improve the incomes of our drivers."

He did not disclose the size of the company’s fleet, but said it plans to offer ride-hailing services in other localities too soon.

Established in Hong Kong in 2013, Lalamove operates in 14 markets across Asia, Latin America, Europe, the Middle East, and Africa.

Since entering Vietnam in 2017 it has focused on 24/7 delivery services for individuals and businesses, primarily in HCMC.

It offers has ride-hailing services in Indonesia, Thailand, the Philippines, and Malaysia.

Vietnam’s ride-hailing, delivery and food delivery market shows strong growth potential.

The "e-Conomy SEA 2024" report by Google, Temasek, and Bain & Company estimated the market at US$4 billion in 2024 and expected it to grow to $9 billion by 2030.

According to Mordor Intelligence, the passenger transport market is expected to hit $1.05 billion this year and expand to $2.56 billion by 2030.

Current players include Grab, Xanh SM, be, and Tada, with Xanh SM leading the taxi and ride-hailing segment with a 39.85% market share in the first quarter followed by Grab with 35.57%, it added.

Mordor Intelligence attributes the sector’s strong potential to rapid urbanization, growing demand for convenient personal mobility, a tech-savvy younger generation, and rising tourist numbers in Vietnam.

But competition is intense. The Google report noted that local companies were gaining traction, contributing to Gojek’s exit from Vietnam in September 2024.

"Competition is expected to intensify, reshaping the industry and potentially accelerating the adoption of electric vehicles."

A survey by Q&Me, an online market research platform, found that safety and price are the top factors influencing users’ choice of ride-hailing services, particularly in the case of motorbikes.

Other considerations include courteous drivers, quick response times, ease of booking, and vehicle quality.