Vietnam’s electric taxi firm Xanh SM makes first foray into food delivery market

The company has launched its new platform, Xanh Ngon Merchant, and is actively inviting restaurants and food businesses to join.

The platform aims to connect restaurants, eateries, and specialty producers with consumers, supported by a delivery fleet of electric vehicles.

This clean-energy approach differentiates Xanh Ngon Merchant from competitors that primarily rely on petrol-powered motorbikes.

Xanh SM is positioning Xanh Ngon Merchant as a partner-friendly platform, offering free registration, fast onboarding, competitive commission rates, and a range of flexible support programs.

A representative of Xanh SM emphasized that the platform was designed not only to help restaurants raise revenue, but also to ensure a stable stream of orders, backed by a rapidly growing user base.

In its initial phase, Xanh Ngon will operate in Hanoi, with plans to expand swiftly to other major cities.

The firm is prioritizing partnerships with food establishments that have valid business licenses and food safety certifications.

Xanh SM CEO Nguyen Van Thanh revealed that the firm had spent several months conducting in-depth research into Vietnam’s food delivery landscape and had recruited employees with experience from delivery platforms.

A market in flux

Xanh SM’s entrance comes at a time when Vietnam's food delivery market is both highly competitive and rapidly evolving.

Unlike many of its predecessors and rivals, the company has chosen not to pursue aggressive short-term discounting or cash-burning tactics.

Instead, it focuses on sustainable operations, service quality, and user experience.

This long-term strategy may give Xanh Ngon a competitive edge, especially as foreign startups are pulling out of Southeast Asia due to funding shortages.

Foodpanda, once a giant in the region, has announced its exit from Thailand on May 23, after 13 years of operation.

Vietnam’s food delivery sector, valued at US$1.8 billion in 2023, is expected to nearly double to $3.4 billion by 2027, making it an attractive yet challenging market.

Several high-profile companies, including Baemin, Toss, Zoomcar, and Atome, have exited Vietnam after struggling to capture market share.

Baemin, despite operating in more than 10 provinces at one point, was ultimately unable to sustain growth and had to withdraw from Vietnam.

Grab and ShopeeFood are dominating the Vietnamese market, controlling an estimated 95 percent of the total market share, and leaving little room for smaller players like Be and others.