As reported by Bloomberg News, ride-hailing provider GoTo Group is withdrawing from Vietnam, abandoning a country where it’s been struggling to reach profitability, aside from its main operations in Indonesia and Singapore.

GoJek, which offers ride-hailing, food delivery, and courier services, accounted for less than 1 per cent of GoTo’s gross transactions in the second quarter and the exit is unlikely to hurt the company’s financials.

The unprofitable company, which battles stiff competition from Singapore’s Grab Holdings in markets including Vietnam, has slashed spending as user growth cools. It exited Thailand in 2021, and late last year relinquished control of loss-making e-commerce arm Tokopedia to ByteDance’s TikTok in a $1.5 billion deal.

Besides market leader Grab, Vietnam’s ride-hailing contenders include local player Be Group. The startup raised about $30 million this year to accelerate its growth from ride-hailing and deliveries.

Vietnam's ride-hailing market size is forecast to hit $880,000 in 2024 and $2.16 billion by 2029, growing at a compound annual growth rate of 19.5 per cent, according to Mordor Intelligence.

Overall, the Vietnamese ride-hailing market is moderately consolidated, with players like Grab, Xanh SM (GSM JSC), Be Group JSC, and FastGo. The greatest threat to Grab may come from Xanh SM, Vietnam's first-ever electric taxi company. Xanh SM has been aggressively expanding its market foothold with its strong partnership growth. Several players in the market are engaged in mergers, strategic partnerships, and new product and service launches to stay ahead of the competition.