Food delivery apps enter new competition race in Vietnam

Vietnam's online food delivery market is entering a new phase of competition after years of rapid growth fueled by foreign capital and aggressive promotional strategies.

The withdrawal of several international players is creating opportunities for domestic platforms and pushing them to shift toward more sustainable business models.

Two major food delivery apps that have exited the Vietnamese market are Indonesia's GoFood and South Korea's Baemin.

   Promotions are no longer enough

As consumer expectations rise regarding delivery speed and service quality, food delivery platforms are under pressure to innovate.

Thuy Trang, a frequent user of food delivery apps in Ho Chi Minh City, used to compare two to three apps to find the best promotions.

However, delays were common because of bundled orders, sometimes leading to 20- to 30-minute waits.

"When drivers combine orders, my food often arrives cold and no longer tastes good," she said, noting that she now prioritizes faster delivery.

A Q1 2025 survey by Rakuten Insight, a market research platform under Japan's Rakuten Group, found that in Hanoi, Ho Chi Minh City, Da Nang, and Can Tho, only 26 percent of users chose apps based on price.

In contrast, 47 percent prioritized delivery time, and 41 percent valued driver accuracy and professionalism.

Over the past few years, the food delivery market has been a battleground for major international players competing through heavy investment and widespread promotions.

But with many of these players pulling out, domestic challengers are stepping in.

While GrabFood and ShopeeFood still capture over 95 percent of the market, a new local name--Xanh SM Ngon, part of the Vingroup ecosystem--officially entered the race in May 2025.

Nguyen Van Thanh, CEO of GSM, the operator of Xanh SM, said the company is focusing on order sustainability and customer experience instead of chasing market share through discounts.

"Consumer behavior is changing. That's why we've implemented a 'no bundling' policy to ensure hot, complete deliveries and reduce mistakes," Thanh stated.

   Fierce competition continues

Despite fast growth, the industry has revealed flaws.

Many restaurants have complained about high commission ratesranging from 20 to 30 percent per orderexclusive of advertising fees.

"Selling through apps isn't as easy as it looks," said The Dinh, owner of a central Vietnamese food chain in Ho Chi Minh City.

"If I sell something for VND100,000 [US$3.8] and the app takes 30 percent, I'm left with VND70,000 [$2.7].

"After costs, there's hardly any profit."

Globally, the food delivery industry is also adjusting after the COVID-19 pandemic, where companies rushed to hire drivers and offer promotions to capture market share.

In more mature markets like the U.S. and South Korea, platforms are shifting to subscription models, focusing on tech upgrades and service improvements rather than short-term promotions.

In Vietnam, however, the 'best deal-hunting' habit persists, making it difficult for companies to move away from discounts.

Nguyen Ngoc Luan, CEO of Meet More, believes competition between platforms like ShopeeFood, GrabFood, beFood, and Xanh SM Ngon will only grow fiercer.

"This is still a phase where companies are pouring in capital to secure their market position. Everyone wants to acquire and retain customers," he said.

Consumers are the biggest beneficiaries for now, as platforms are forced to offer constant promotions, free delivery, discount codes, and bundle deals to stay competitive.

This creates a vibrant market and boosts food delivery demand, which is increasingly embedded in urban life.

Companies continue to sell below cost, sacrificing profit to lock in users.

Some may think cheap food delivery is just a consumer benefit, but behind it is a complex business problem.

No one can say when they will turn a profit because customer retention costs are so high, Luan noted.

"Vietnamese consumers are also highly flexible," he added.

"They install multiple apps and choose the one with the best deals, making it challenging to raise service prices in the short term and thus forcing apps to balance retention with profitability."

   Using technology to win users

According to Momentum Works, Vietnam's food delivery revenue reached around $1.8 billion in 2024, up 26 percent from the previous year.

It is projected to hit $9 billion by 2030.

However, the competition is intense, with only a few major players controlling most of the market.

With Vingroup's ecosystem entering the food delivery space, established players like ShopeeFood and GrabFood are stepping up efforts to attract users.

ShopeeFood recently launched a 'Solo meal' collection priced uniformly at VND39,000 ($1.5), targeting individual users, especially Gen Z customers who want quick, affordable meals.

ShopeeFood is also investing in artificial intelligence (AI) and live streaming to create a unique culinary-discovery entertainment experience.

GrabFood has expanded its Restaurant Voucher program with up to 50-percent discounts, uses AI to personalize user experiences, and is developing its own food live-streaming channels.

Meanwhile, Lalamove, known for its express delivery services, is launching ride-hailing and food delivery.

The European app Bolt is also rumored to enter Vietnam in 2025, further intensifying the competition.

Thanh Ha - Cong Trung / Tuoi Tre News

(2025/07/15-10:27)

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