Boyden Executive Search

South-East Asian ride-hailing firm Grab has a vast territory and broad ambitions. The only roadblock to leading the local ride-hailing market is America’s Uber.

Grab connects users of its ride-hailing app with taxis, private cars and motorbike taxis in six countries: Malaysia, Indonesia, Thailand, Vietnam, the Philippines and Singapore, where it is headquartered. Co-founder Anthony Tan insists, however, that Grab is not the South-East Asian Uber. Rather, he sees Grab as a technology firm modelled after Chinese tech titans Alibaba and Tencent.

Like Tencent, Grab is also active in the Fintech sector, and making a push to popularise mobile payments. It launched its digital payments system, GrabPay, in 2016 and has since turned it from a digital-payments processor, primarily for users with credit and debit cards, to a digital wallet. Most people still use GrabPay mainly for Grab rides, but Grab hopes its usage will expand to all kinds of purchases.

While Grab is branching off, leadership in the South-East Asian ride-hailing market remains its core priority. Apart from fending off a few local rivals, this means facing down Uber, which is about 20 times as valuable. The American firm operates in all of the same countries, but fewer cities: 20, versus Grab’s 34. In 2016 Uber gave up trying to gain a foothold in China, and sold its business to Didi Chuxing. This made it stronger elsewhere in the region, as it freed up resources to further penetrate Grab’s territories.

Florian Hoppe of Bain says that Uber has greatly strengthened its position in South-East Asia in the past year, by shifting its local strategy to include the same broad service offerings as Grab: taxis, private cars and two-wheel transport.

Indonesia is especially important in this competition. It has a population of 257 million, accounting for over a third of the region’s people. Grab claims to have services that are better suited to South-East Asians. These include offerings tailored specifically to Indonesia. For example its scooter ride-hailing service, GrabHitch, is aimed directly at people in Jakarta who commute from the outlying suburbs to the city’s congested center. Launched in 2015, GrabHitch could soon take the lead from local rival Go-Jek. Uber is also in the mix, having launched its motorbike-cab service UberMotor in Indonesia in 2016.

Indonesia continues to be a focal point for Grab and Uber. Grab has been further diversifying its business there, adding food delivery service GrabFood in 2016. In early 2017, the company announced plans to invest $700 million in Indonesia over the next four years.

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