Why Grab app is such a success

  

grab

Formerly known as GrabTaxi, Grab is a Singapore-based car-sharing technology company that operates in Singapore and other Southeast Asian nations such as Malaysia, Indonesia, Philippines, Vietnam, Thailand, Myanmar. Through its app, Grab offers ride-hailing, ride sharing logistics services.

While Uber's founders were testing their app in San Francisco, two Harvard Business School classmates from Malaysia conceived a similar idea: Uber for Asia and that's how GrabTaxi started. They fist tested the app in 2012 when they launched the ride-sharing service with 40 drivers in Kuala Lumpur. Ever since, Grab has grown exponentially, overtaking the ride-sharing market in Southeast Asia, with 2.3 million drivers in 168 cities across eight countries. Today, Grab is the most valuable tech startup in Southeast Asia, amassing $2.5 from investors such as Softbank, the Chinese ride-sharing company Didi Chuxing, and Hyundai, and as a result, now Grab is valued at $10 billion.
Although Uber has invested dramatically in the region, Grab remains the number one ride-sharing app in Southeast Asia. What Grab has mastered and Uber hasn't is a better knowledge of the region. Uber has spent years doing research on Western users, but these results can't be applied to Southeast Asian countries. Meanwhile, Grab has made the most of its cultural advantage, and has invested, instead, in trying to figure out how to make e-pay work in nations with poor financial infrastructure. Grab acquired Uber's Southeast Asia business in 2018 with Uber getting a percentage stake in Grab.
The company has recruited young coders - that include alumni of Facebook, Amazon and Google - to keep up with the fierce competition in the region. Ever since Uber launched in the region in 2013, the company has invested millions of dollars into recruiting riders and drivers. At the same time, local competitor Go-Jek has a strong market lead in Indonesia and has recently raised at least $13 billion in a funding round that involved Google as well as Chinese companies Tencent and JD.com and the Singapore sovereign wealth fund Temasek. Go-Jek recently closed $2 billion round at $9.5 billion valuation.
This millionaire investments and race to dominate the market stem from the fact that dominating ride-share in Southeast Asia leads significant economic opportunity. A report co-authored by Google stated that spending on ride-hailing apps in the region has more than doubled over the past two years to $5 billion. By 2025 it is expected to reach $20 billion.
Despite Uber's astronomical investments, local companies are still leading the market, which has prompted the Western company to try and match the discounts and promotions competitors are offering riders and drivers in the region. This initiative, however, has resulted in Uber losing money. During a New York Times Dealbook Conference in New York, Uber CEO Dara Khosrowshahi addressed this issue and the company's performance in Southeast Asian, saying that the market was over-capitalized. “We're going in, and we're leaning forward,” he said. “But I'm not optimistic that market is going to be profitable any time soon.”
It is hard for Uber to catch up with Grab, which has prompted rumours that both companies might join forces. Uber cannot compete with Grab's cultural proximity and understanding of the needs of drivers and riders in countries like the Philippines and Vietnam. For instance, when Grab first launched, it held sessions every to weeks to train drivers how to use the app and even smartphones. Since most riders didn't have credit cards, Grab accepted case from the very start. Although Uber accepts cash in some parts of the region, it took it two years to adopt this strategy.
As people were already familiar with Grab, when smartphones started to become more popular, they already fest comfortable to use Grab's app to hail a car, a motorbike, a van ride or even a trike.
The best step for Grab was to enable riders to load money via into their app via credit cards, online banks, local ATMs and even convenience stores that take part in an over-the-counter digital wallet service called GrabPay. To this date, the company has been purchasing fintech startups and opening research and development centres dedicated to growing its payment service.
Grab has also enabled peer-to-peer payments and allowing other merchants to accept GrabPay. The way that it works is that you scan a merchant's QR code, key in an amount and then hit the “pay” button. This service was launched across restaurants and food stalls in downtown Singapore, and is now being spread out through the region.

 

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