The Green Giant: How Xanh SM is Cementing its Place as an Industry Titan

From ‘Phenomenon’ to Emerging Market Leader

The ride-hailing market is witnessing contrasting fortunes. On one hand, Gojek quietly exited Vietnam after more than half a decade of struggling to gain a significant foothold. On the other hand, newcomer Xanh SM is rapidly expanding its market presence with an impressive reach.

According to statistics from the international organization Mordor Intelligence, just seven months after its launch (Q4 2023), Xanh SM captured 18.17% market share, ranking second in the industry and doubling the market share of Be Group in third place (9.21%). This is triple the market share of Gojek (5.87%), despite the Indonesian startup’s longer presence in Vietnam.

In early 2024, the “The Connected Consumer” report for Q1 2024 by Decision Lab revealed that Xanh SM was the second most popular ride-hailing app in Vietnam, with over 32% market penetration. This is nearly three times that of Mai Linh, which ranked second with 11%.

Xanh SM’s rapid growth in just over a year has been likened to a decade of progress for other ride-hailing companies by industry experts and users alike. Nguyen Van Thanh, CEO of GSM Global (the company that manages and operates Xanh SM), shared that their initial goal was to be present in five provinces and cities in 2023. However, just over a year later, Xanh SM has expanded to 54 provinces and cities.

What’s remarkable is that Xanh SM has been consistently gaining momentum from the second quarter onwards, a trajectory unlike any other ride-hailing startup before it. In addition to continuously expanding its market share, GSM is also driving the green transition for transportation businesses. In September, GSM signed a memorandum of understanding with the Southern Economic Cooperative Alliance to lease 5,000 VinFast electric cars this year to gradually replace their current gasoline-powered fleet. Previously, GSM also connected with dozens of taxi companies and transportation businesses to facilitate their transition to electric vehicles, including prominent names such as Én Vàng (Hai Phong), Lado (Lam Dong), Bach Dai Dung (Ha Tinh), and taxi MaiLove (Nghe An), among others.

GSM is not only growing in width (market reach) but also demonstrating strong depth in its development. In mid-September, GSM and Mekong Green Trading Joint Stock Company (a subsidiary of Mai Linh Group) signed an MOU to establish a large-scale auto service workshop chain. This extensive workshop system will provide efficient repair and maintenance services for the growing number of electric vehicles on the road, ensuring the five-star quality that Xanh SM users have come to trust.

Opportunity to Become Number One: A Unique Formula for Success

Observing Xanh SM’s progress, economic expert Din Trong Thinh believes that the rapid growth of the Vietnamese electric taxi company is justified.

Having personally experienced Xanh SM’s services, the expert highlights one of the key reasons for their market dominance: their ability to leave a lasting impression on customers. This is achieved through a combination of factors, including clean and high-quality vehicles, safe and courteous interactions with customers, driving etiquette, and a helpful attitude.

“In this age of technology and fierce competition, the key differentiator is service quality. And in this regard, Xanh SM deserves to be a star in the market,” the expert says.

In recent years, the ride-hailing market has become somewhat saturated, with vehicle and service quality stagnating or even declining. According to Din Trong Thinh, Vietnamese customers crave high-quality products and services, and Xanh SM’s entry into the market has successfully tapped into this unmet need, resulting in strong support from customers.

Le Hong Hiep, a senior researcher and coordinator of the Vietnam Studies Program at the Institute of Southeast Asian Studies (ISEAS-Yusof Ishak Institute, Singapore), further analyzes Xanh SM’s strengths. He points out that Xanh SM stands out in the market with its “new, clean, and smart” vehicles, providing customers with a comfortable and enjoyable journey. “Customers also appreciate Xanh SM as a green transportation solution that helps reduce air pollution, especially in Hanoi and Ho Chi Minh City,” he adds.

Indeed, an increasing number of drivers are choosing to partner with Xanh SM. According to Le Hong Hiep, Xanh SM drivers benefit from competitive salaries, bonuses, and welfare policies, providing a sense of security and safety. Additionally, the advantages of electric vehicles, particularly the lower costs of charging and maintenance (about a third of gasoline-powered vehicles), make Xanh SM an attractive option for drivers looking to transition to electric.

Sharing the same view, Din Trong Thinh asserts that with its unique formula for success and promising new developments, Xanh SM is solidifying its position as the true market leader in ride-hailing services.

“Grab has been in the market for a long time, but Xanh SM surpasses them in terms of vehicle quality and service attitude. This foundation positions Xanh SM to overtake Grab,” the expert expresses his confidence.

TH (Tuoitrethudo)