Indonesian ride-hailing provider GoTo Group is pulling out of Vietnam, abandoning a market where it faced fierce competition, as it sharpens its focus on reaching profitability in its core operations in Indonesia and Singapore.
Vietnam’s ride-hailing market remains competitive, with Grab as the current leader and local player Be Group emerging as a strong contender.
The company’s Gojek brand will cease operations in Vietnam on 16 September, according to Bloomberg.
The Vietnamese business, which offered ride-hailing, food delivery, and courier services, contributed less than 1% to GoTo’s overall gross transactions in the second quarter and its closure will not significantly impact the company’s financial performance.
GoTo, currently unprofitable, has been aggressively cutting costs and streamlining its operations in the face of slowing user growth and stiff competition from rivals like Singapore’s Grab Holdings.
In 2021, the company exited Thailand, and late last year, it relinquished control of its loss-making e-commerce arm Tokopedia to ByteDance’s TikTok in a US$1.5 billion deal.
Despite these efforts, GoTo has yet to achieve net income profitability, even after implementing thousands of job cuts and substantial reductions in marketing spending.
However, under the leadership of CEO Patrick Walujo, who took over last year, the company has made significant strides toward its profitability goals.
GoTo reiterated on Wednesday its expectation to reach positive adjusted EBITDA for the full year.
While the TikTok deal and ongoing cost-cutting measures have relieved some financial pressure, the challenging market conditions have prompted GoTo and its competitors to explore more aggressive options.
Earlier this year, GoTo and Grab revived discussions about a potential merger of their core businesses, according to Bloomberg News, a move that could allow them to consolidate their operations and attract more users.
