Green and Smart Mobility (GSM), the electric vehicle taxi brand owned by the chairman of Vietnamese conglomerate Vingroup, has risen to the top of the domestic market just two years after launch and has started to expand overseas.
GSM began offering the “Green GSM” taxi service in metro Manila on Tuesday with a 2,500-vehicle fleet. The launch appears to have gotten off to a hot start, as the company’s app was downloaded over 100,000 times within a few hours, GSM CEO Nguyen Van Thanh said.
GSM’s platform is similar in many ways to other competitors, such as Singapore’s Grab. Users enter a destination, hail a vehicle and pay using the app.
However, all of GSM’s vehicles are electric, featuring a distinct blue-green exterior. The company has also hired professional drivers instead of gig workers in a bid to improve the quality of driving and customer-facing services.
GSM started operating taxi services in Vietnam in April 2023. It currently has about 100,000 vehicles there, including electric motorcycles. The Philippines is the third country the company has expanded into, following Laos and Indonesia.
GSM has captured nearly 40% of the Vietnamese market in the first quarter, according to Indian research firm Mordor Intelligence, surpassing Grab’s 36% share for the top spot. GSM’s rapid growth is thought to be the main reason why Indonesian giant Gojek withdrew from Vietnam last year.
“EVs don’t have the smell of gasoline or engine noise,” said Thanh, explaining why GSM’s services have thrived. “The vehicles are new and the interiors are spacious.”
Electric vehicles also have cost advantages over gasoline vehicles, according to Thanh. Fuel costs are on average of 55% to 60% less while maintenance costs are 50% to 60% cheaper, said Thanh.
Vingroup founder Pham Nhat Vuong established GSM with his own money, and the unit is considered to be essentially a subsidiary of Vingroup.
GSM’s biggest strength is the synergy it forms with Vingroup sister companies. GSM vehicles are made by VinFast and charging stations are supplied by V-Green.
A lack of charging stations often looms as a hurdle to mass penetration of EV services, but V-Green had built a network of roughly 150,000 charging stations exclusively for VinFast vehicles in Vietnam.
Vingroup is also Vietnam’s leading real estate developer. The portfolio includes condominiums, shopping centers and resorts, and the group expanded into universities and hospitals as well.
VinFast has become the top domestic seller of cars, surpassing Toyota Motor. Behind Vingroup’s winning strategy in the EV and EV taxi business is the utilisation of electrics made by the group and establishing charging stations in prime locations.
But the Vietnamese market alone offers limited room for growth, so expansion abroad is key. But across borders, Vingroup will not have real estate operations to lean on.
In Laos, GSM’s first overseas market, only about 500 vehicles are in operation since services launched in November 2023. GSM is plotting overseas expansion in line with VinFast’s expansion, but the EV company’s penetration abroad is still a work in progress.
Vingroup is pursuing a business model that boosts EV sales through taxi services as it generates revenue from charging stations. But VinFast, the linchpin of that strategy, is a loss-making operation propped up by Vuong’s personal funds as well as revenue from Vingroup’s real estate business.
This article was first published in Nikkei Asia.
