Going Better or Going Bananas, Which G-direction Will Grab Goes after Gojek Expands its Footprint into 4 Countries?
The ride-hailing battle in the Southeast Asia market has been concentrated on and discussed with great popularity.
Giving a panoramic view of Southeast Asia, the E-commerce landscape in it is reaching maturity and many e-commerce players bet on Chinese e-commerce models to win big in burgeoning Southeast Asia markets. Outstanding e-commerce player like Lazada has been benefiting from its parent company Alibaba’s know-how in e-commerce. On the other hand, the heated industry of Fintech has still grounded in simple and straightforward Cash Loan whilst Blockchain is just an illusion.
The competition in the ride-hailing industry is cutthroat in SEA. However, there’s still robust pockets of growth of SEA in the ride-hailing battlefield.
Just three months after Uber quits, the story between Grab and Gojek began.
In late May of 2018, Gojek has tapped into four countries in SEA while its competitor Grab was struggling to expand in Vietnam, where it has failed to secure approval from local authorities in some Vietnam cities. Grab was only allowed to implement the ride-hailing services in Hanoi, Ho Chi Minh City, Khanh Hoa, Danang, and Quang Ninh.
The timing of the event is particularly implicit. When Gojek forayed into the Vietnam market, the Vietnam government has opposed Grab’s proposal to expand its services to more areas in Vietnam, which reflected the government’s dissatisfied attitudes towards Grab to some degree.
Expansion is crucial for Grab to sustain its growth in Vietnam, but considering Grab’s footprint in SEA, it is just a little episode for Grab. As we could tell from the diagram below, Thua Thien-Hue, Ba Ria-Vung Tau, and Lam Dong are vast (where Grab had no permit to operate), but the population density is low. What the Vietnam government did is to give Grab a kind warning to tightly supervise the operation of tech-driven transport firms.
However, this was the first time that the government got involved in the ride-hailing service industry after Uber pulled out of Southeast Asia. This small episode may turn into the foreword of an anti-monopoly investigation by governments in Southeast Asian countries, declaring that the battle for ride-hailing is no longer a battle between enterprises, but a battle between the government and overseas capital.
Grab and Gojek: Jostle for Position
When Uber merged with Grab, it is said that government watchdogs would step up probe into Grab. However, the investigation was just in progress until the Vietnam government pushed it into the stage of prohibition.
As the investigation going on and going deeper, what if governments start to meddle in the payment industry? What will happen? Let’s venture to guess:
Singapore: Grab might still play a leading role in the ride-hailing field, but GrabPay has trouble growing big out of its ecosystem. Singapore watchdogs might advance an anti-monopoly investigation into Grab, ramping up a broader government push to bring greater competition to its economy and opening door to new players like Gojek. Although Grab is a Singapore-based company, in the payment section, fueling the growth of government-backed mobile payment platform PayNow is the “original intention” of the Singapore government.
Indonesia: Through the “money-burning” strategy, Grab acquires the leading position in the “four-wheel vehicle” market, however, Gojek takes the leadership position in the “two-wheel vehicle” market with flexibility. When it comes to payment, as a local company, Gojek is more welcomed by the Indonesia government as we can tell from getting a license earlier.
Malaysia: Grab founder Anthony Tan comes from a wealthy family, his grandfather is the founder of Tan Chong Motor, which assembles and distributes Nissan cars across Southeast Asia. As a scion of a prominent Malaysian family, Anthony and his Grab are more striking than Gojek in Malaysia no matter in the ride-hailing filed or payment field. In May 2018, Grab has introduced the GrabPay in Malaysia, partnered with the biggest bank in Malaysia like Maybank and ensured GrabPay was not only accepted nationwide in eight cities but can also be used for a variety of services and a bunch of restaurants and vendors.
The ride-hailing market looks rosy and GrabPay is the phenomenal product with the largest potential to grow into Alipay in SEA. This time, Masayoshi Son and his Softbank has captured the commanding height of the payment field in SEA.
However, the ultimate rivals of payment fields are not enterprises against enterprises but foreign capital against the local government.
