HANOI: Ride-hailing firm Grab announced on Wednesday (Aug 28) it will invest US$500 million in Vietnam over the next five years to expand its services in the Southeast Asian country.
The company will expand its transport, food and payments networks in the country, Grab said in a statement.
"This investment is a reflection of our redoubled commitment to Vietnam," said Mr Russell Cohen, head of regional operations of Grab.
"The country's rapidly developing economy and emerging middle-class population make it ripe for the adoption of digital services," he said.
Grab president Ming Maa told Reuters in an interview earlier this week that "we're very excited about Vietnam. We see very similar characteristics to Indonesia".
Like Indonesia, many middle-class and young consumers in Vietnam are using apps and websites to access services, Mr Maa said.
Last month, Grab unveiled a plan to invest US$2 billion in Indonesia, the region's most populous market, where it aims to build a next-generation transport network and transform how critical services such as healthcare are delivered.
Its decision for additional investment in Vietnam comes as the ride-hailing market in the country becomes more competitive with the participation of Indonesia's Go-Jek and Vietnam's Be.
"Competition in ride-hailing will become fiercer," said Ho Chi Minh-based economist Bui Quang Tin. "The size of the investment means Grab will be able to offer heavy discounts even if it risks losses in the short term," he added.
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Vietnam currently ranks third or fourth among Grab's top markets, said Mr Maa, who joined the company three years ago from its major investor, Japan's Softbank Group, and a previous decade-long stint at investment bank Goldman Sachs.
Grab partnered with Vietnamese fintech firm Moca in 2018 to launch a digital wallet. Grab formed a joint venture with Credit Saison, a Japanese credit card company, last year to offer loans and credit analysis to consumers and micro-entrepreneurs across Southeast Asia.