Rada is chosen for VStartup’s “Startup Profiles” debut as the services that it provides attract me, a woman who knows almost nothing about fixing things around the house or could do nothing if my bike is broken.
From vehicle repair, home appliance maintenance, to airport taxi service and even beauty care, Rada has them all.
Before Rada, customers often search for a website of a small service provider and dial the hotline they can find, unless they have a relative or friend who is a mechanic, which is a rare reality. Most of the time, this conventional way of service can be a painful experience, as the price exaggerates your expectation while the next time you need to fix the item again might happen within a fortnight.
Rada offers transparency in pricing, while we guarantee that our partners work at their best to serve you.
Richard Ma, CEO and founder of Rada.
While the startup has expanded its on-demand services to a diversified range, its core continues to be home appliance and vehicle repair.
Launched in 2015, Rada now claims to have over 100,000 downloads, with 30,000 active users per month. It was picked as a Google Play’s top free app in transportation in Vietnam, alongside Southeast Asia’s unicorn Grab.
The startup has also received the $40,000 FbStart support.
“The boom of the sharing economy is something that can be leveraged in Vietnam to solve multiple issues. Yet, we haven’t solved a lot of the issues in the local market, while the demand for what Rada is providing is high,” says Richard.
Richard opines, the key in doing servicing business is customer care, which is a very weak operation in the local service sector.
Vietnamese are becoming more tech savvy. They are very fast in adopting new technologies and tech-based services. But this also happens to be the reason why it is super hard to satisfy local users, who are often skeptical about new services.
“Customer trust is one of the biggest issues we are facing,” Richard reveals. “A lot of them only use first-time trial, which discourages Rada’s service provider partners. Or sometimes users are very demanding for a perfect service, like wanting the mechanic to be right at their door immediately.”
In addition, legal environment is not either really supportive for on-demand services in Vietnam, Richard adds on the hurdles.
“However, there are just difficulties along the way, not the excuses for startups to step back.”
Rada is seen as the first app for this vertical. Thus, Richard says he wants to see more competitors, because it proves that there is a worthwhile market.
The entrepreneur estimates household service accounts for 10-15 per cent of the GDP. The market size in Asia Pacific is $40 billion a year, and in Vietnam is some $1.2 billion. Rada is targeting at the niche that accounts for around 30 per cent of that number.
Real growth is unnecessarily numbers
“At the beginning, we thought the increases in users and partners were great. But what matters much more is the quality of the service, whether our partners are willing to provide their services at their best and whether customers stay with us for the next times of using Rada,” Richard shares.
Rada is working with five established partners which take care of the household appliance services in Hanoi. This is not a large number, but these five partners can cover the Hanoi market properly, the company unveils.
In total, Rada currently has over 300 partners mainly in Hanoi and Ho Chi Minh City, while it has managed to seek partners in several other cities.
The trick is also choose the right partners, those who fit this market niche and fit our business model. It’s not necessary to partner with the biggest, it’s better to work with the companies who share the same vision.
The startup’s near-term target is to have each of its customers order Rada services around five times in a month.
The bigger goal is to change user behavior in the service sector. “Once an ecosystem for the service sector is formed, it will be much easier for service providers like us to work and grow, and Rada wants to contribute to build that ecosystem,” says Richard.
A service map of Rada in part of Hanoi in October
on ‘Market Insights’