Grab awaits le­gal progress amid dom­i­na­tion in Thai­land

The Phnom Penh Post - - BUSINESS -

Wil­liam Hicks

RIDE-SHAR­ING ser v ice Grab plans to ex­pand to key ar­eas in Thai­land this year, most no­tably Chi­ang Rai, hop­ing to achieve na­tionw ide ser v ice i n the next t wo to t hree years, a goal t hat could be ex­pe­dited by the up­com­ing elec­tion.

The com­pany ex­pects the elec­tion to pro­duce favourable re­sults, said Grab’s Thai­land coun­try head Tarin Thaniyavarn, as ma­jor po­lit­i­cal party rep­re­sen­ta­tives have made pos­i­tive state­ments about Grab and the shar­ing econ­omy at large.

Al­though Grab does not re­lease spe­cific num­bers re­gard­ing t heir five years of op­er­a­tion in Thai­land, Tarin said the num­ber of driv­ers has dou­bled in the past 12 months. The com­pany also ex­panded to food de­liv­er­ies i n De­cem­ber 2017 and in the first 10 months of op­er­a­tion made t hree mil­lion de­liv­er­ies from 15,000 mer­chants. At least 15 per cent of Grab’s busi­ness in Thai­land comes from tourists.

“Thai cus­tomers are the most so­phis­ti­cated cus­tomers in South­east Asia, pe­riod,” Tarin said. “Just by the level of en­gage­ment on so­cia l me­dia, and Bangkok is a lmost the num­ber one cit y in the world in terms of us­ing Face­book. Thais want to em­brace this con­cept more than any­one.”

Ev­ery­one’s a win­ner

The main po­lit­i­cal is­sue Grab wants re­solved by govern­ment, and what is ham­per­ing ex­pan­sion ef­forts, is le­gal­i­sa­tion. Though Grab op­er­ates in 16 prov­inces and 19 cities in Thai­land, pay­ing for a ride from an un­li­censed driver is still tech­ni­cally il­le­gal, and some Grab driv­ers have faced fines by po­lice. In ev­ery other South­east Asian coun­try Grab op­er­ates in, ride-shar­ing ser­vices are le­gal.

The le­gal­i­sa­tion is­sue has made ex­pand­ing through­out Thai­land dif­fi­cult. Tarin said that if the le­gal­i­sa­tion ques­tion were re­solved, Grab could make its ser­vices avail­able in as lit­tle as six months.

Grab still has an id­iosy ncratic re­la­tion­ship with the govern­ment. De­spite not be­ing tech­nica lly lega l in a ll as­pects of op­er­a­tion, Grab works “ex­tremely closely with the Thai­land Tourism Authorit y” and the min­istries of Trans­port and Labour, Tarin said.

Grab has re­ceived pos­i­tive sig­nals from many po­lit­i­cal par­ties par­tic­i­pat­ing in the com­ing elec­tion. Re­cently the Bhum­jaithai Party posted a video to so­cial me­dia of its lead­ers sit­ting in a Grab car and in­ter­view­ing Grab driv­ers.

At the re­cent Go Thai­land 2019 din­ner hosted by Thanset­takij news­pa­per, the deputy leader of the Pheu Thai Party, the com­merce min­is­ter and the deputy leader of the Demo­crat Party all made favourable state­ments about Grab and the shar­ing econ­omy, Tarin said.

“This was the first time there was con­sen­sus across three big par­ties in Thai­land – that the ben­e­fits from the shar­ing econ­omy are mas­sive for the coun­try and the peo­ple,” he said. “They said there must be a change in how we move on this.”

Tarin ex­pects the mo­men­tum to­wards lega li­sa­tion to be in Grab’s favour no mat­ter who wins the next elect ion.

Hands-on ex­pan­sion

At the core of Grab’s ex­pan­sion ef­forts is a hands-on ap­proach to new ar­eas, find­ing lo­cal part­ners and build­ing com­mu­nity sup­port for Grab ser­vices. In­cum­bent taxi car­tels and lo­cal govern­ments can act as hur­dles to growth, so Grab must ded­i­cate a team of em­ploy­ees when mov­ing into a new area.

The com­pany wants to fo­cus on mov­ing into heav­ily traf­ficked tourist ar­eas where lo­cal taxis do not meet the de­mand of fluc­tu­at­ing tourist num­bers. Grab also plans to pro­mote devel­op­ment in sec­ondary des­ti­na­tions in con­junc­tion with the Thai­land Tourism Au­thor­ity.

“There will be many tourism cities in Thai­land that could ex­plode from Grab’s pres­ence, and a lot of peo­ple in the cities who will start mak­ing money,” Tarin said.

A no­table ex­am­ple of Grab’s hand­son ex­pan­sion strat­egy was Buri­ram ahead of last year’s Mo­toGP in Oc­to­ber. The city had an in­flux of about 200,000 peo­ple for the event, with only 15 lo­cal taxis op­er­at­ing in the area. Grab or­gan­ised op­er­a­tions in Buri­ram ahead of the event and was able to re­cruit about 200 driv­ers to serve the event, giv­ing rides to 15,000 peo­ple.

“Our strat­egy is to spend time in a spe­cific prov­ince, find a lo­cal part­ner who can help us grow the mar­ket in the long term, be more en­trenched in the com­mu­nity and then things will be a lot more en­gaged and long last­ing,” Tarin said. “Buri­ram was a great ex­am­ple for all of this.”

Grab wants to fo­cus on ex­pand­ing into Chi­ang Rai, where the com­pany has a tiny op­er­a­tion.

“[Last year] there were a lot of events in Chi­ang Rai, and lots of tourist at­trac­tions in the city,” Tarin said. “This is def­i­nitely the main city we want to fo­cus on go­ing for­ward.”

War of the su­per­apps

Chi­nese mes­sen­ger app WeChat’s “su­per­app” strat­egy has seen un­mit­i­gated suc­cess that other app com­pa­nies are striv­ing to em­u­late.

In China, peo­ple use WeChat all day, ev­ery day – not just for mes­sag­ing, but for pay­ments, so­cial me­dia and e-com­merce. The app’s takeover of ev­ery­day life in China has in­spired other com­pa­nies in Asia to at­tempt to broaden the scope of their own apps.

Grab cer­tainly has su­per­app ambi- tions, ad­ding a num­ber of ser­vices last year, in­clud­ing an e-pay­ment wal­let in part­ner­ship with Kasiko­rn­bank, a gro­cery de­liv­ery ser­vice and an ad­di­tional ser­vice that picks up items from 7-Eleven and Fam­i­lyMart, “so you never have to leave your house”.

Un­like some su­per­apps like Face­book Mes­sen­ger and WeChat, Grab doesn’t want an open plat­form to al­low third par­ties to pub­lish apps on its plat­form, but will in­stead have full con­trol of ser­vices that will be avail­able on the Grab app. Ser­vices are of­ten added ei­ther by Grab in­de­pen­dently or through cu­rated part­ner­ships, like with GrabFresh, a part­ner­ship with an ex­ist­ing gro­cery de­liv­ery app, Hap­pyFresh, that built the ser­vice into the Grab app.

The Ja­panese mes­sag­ing app Line has be­come hugely pop­u­lar in Thai­land for com­mu­ni­ca­tions and so­cial me­dia, but it has be­gun to branch out into TV pro­grammes, games and even ride-shar­ing and food de­liv­ery. Both Line and Grab are vy­ing to dom­i­nate as the WeChat of Thai­land.

In De­cem­ber, In­done­sian rideshar­ing com­pany Go-Jek launched its own taxi and food de­liv­ery ser­vice in Thai­land called Get. Go-Jek pro­vides a num­ber of other ser­vices in In­done­sia that are likely to be of­fered on their Thai app.

As this year gets go­ing, Grab has an enor­mous share of the ride-shar­ing mar­ket in Thai­land – the ex­act fig­ure is un­known – and will start to face in­creased com­pe­ti­tion, not just in ride shar­ing, but in its quest to be a holis­tic su­per­app.

“I think the sheer sup­ply of driv­ers we have is our main ad­van­tage over other plat­forms,” Tarin said. “It’s not easy to build the sup­ply in one or two months, but we’ve been build­ing up over five years and it’s the big­gest num­ber by far com­pared with any Thai trans­port com­pany.”

Grab’s Thai­land coun­try head Tarin Thaniyavarn says the num­ber of Grab driv­ers in Thai­land has dou­bled in the past 12 months.


Grab Thai­land’s coun­try head Tarin Thaniyavarn says the Grab vi­sion for mo­bil­ity is to en­able a multi-modal fu­ture.

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