Vietnam might be last trench against Grab’s regional dominance

However, Vietnamese players will face powerful pressure from Grab's deep financial reserves and huge platform reach, allowing it to deploy aggressive strategies such as massive discounts, driver incentives, and cross-platform bundling across mobility, fintech, and delivery services.

Southeast Asia's ride-hailing industry has undergone significant transformations over the past decade and not necessarily for the better although it is very crucial to urban and increasingly rural life in the region.

Once a vibrant playing field where innovation and consumer choice were king, there is a risk that the services will fall into the grips of a few dominant players, particularly Grab.

Grab, based in Singapore, was initially launched as MyTeksi in Malaysia in 2012. The first regionally born ride-hailing platform has become the leading player in the industry.

Grab's early entry into the market spurred a wave of innovation across the region, paving the way for new players such as Gojek (later part of GoTo) in Indonesia in 2015, Angkas in the Philippines in 2016, and Be in Vietnam in 2018.

It was only natural that Grab expanded across Southeast Asia, entering Vietnam in 2014 and quickly rising to dominance by transforming the traditional motorbike taxi system through digital ease, fixed fares, and strong marketing pushes.

Its acquisition of Uber's Southeast Asia operations in 2018 further solidified its position across the region, allowing it to outpace both global and local competitors.

For years, Grab remained unchallenged as the market leader in Vietnam, until the arrival of Xanh SM in 2023. 

Backed by Vietnam's largest private conglomerate Vingroup, Xanh SM leveraged a fleet of electric vehicles and a strong national brand to quickly gain traction.

Within a short time, it emerged as Grab's top competitor in Vietnam, appealing to eco-friendly consumers and positioning itself as a reliable, made-in-Vietnam choice.

In most Southeast Asian countries, Grab has cemented its dominance, operating with near-monopoly control in markets like Malaysia, Singapore, Thailand, and the Philippines, where local rivals have either exited or been absorbed or relegated to irrelevance.

Vietnam and Indonesia stand out as rare exceptions, with Grab still facing credible local challengers Xanh SM and GoTo, the merged entity of ride-hailing Gojek and e-commerce player Tokopedia.

While GoTo once operated in Vietnam under the GoViet brand, it exited the market in 2024, leaving Xanh SM as the sole major alternative to Grab.

Now, that already-fragile market balance faces a serious threat. Grab is reportedly in advanced discussions to acquire GoTo in a transaction valued at approximately US$7 billion, in what could become one of Southeast Asia's most consequential tech deals in recent years.

Moreover, the potential transaction would unite two of the region's largest digital economy players and significantly reshape the competitive landscape, particularly in Indonesia.

The move comes amid ongoing market pressures on both firms to achieve profitability and scale while raising significant regulatory and antitrust questions. 

For Grab, acquiring GoTo would eliminate its last major regional rival and give it deeper penetration into Indonesia—Southeast Asia's largest digital economy and a critical battleground for super-app dominance.

Despite that, the deal is facing resistance from both regulators and drivers, with Indonesian authorities raising ownership and antitrust concerns and GoTo riders protesting over fears of job losses and declining benefits.

The transaction would not only shift market dynamics in Indonesia but also raise deeper questions about competition, consumer choice, and the future of local innovation as Southeast Asia's platform economy is perceived as becoming increasingly monopolized.

The merger could also shake up Vietnam's ride-hailing market.

With Indonesia's ride-hailing sector potentially falling under Grab's control after the merger, Vietnam could very well be the next strategic target in its push for regional dominance, leaving local players at risk of being acquired or squeezed out.

Vietnam certainly would be very critical for Grab as its market share has eroded despite more than a decade of presence.

Beyond platform services and market expansion, Grab could also pursue strategic partnerships, or even acquire local players, to accelerate its market dominance, although such moves may trigger regulatory scrutiny and market pushback.

While Grab's acquisition of Goto remains uncertain, the resistance in Indonesia offers valuable lessons for Vietnam.

As Southeast Asia's second-largest digital economy, its regulators must ask serious questions about whether it has adequate merger oversight and conduct market studies to flag anti-competitive trends.

Certainly, it can be no bad thing to prevent Vietnam from falling under the sway of a single dominant platform in order to safeguard market competition, national industry, future innovation, and consumer choices.

Vietnam has the opportunity to build a more inclusive, competitive, and sustainable digital ecosystem as one of the leading technology hubs in Southeast Asia. 

By fostering a vibrant and level playing field, Vietnam can promote a balanced digital market by encouraging fair competition.

A Q1 2025 report by Mordor Intelligence showed that Vietnam's $1 billion ride-hailing industry is dominated by Xanh SM and Grab, holding market shares of 40 and 36 percent respectively, followed by Be with six percent, and the remaining eight-percent split among other players.