Grab, Go­jek and Lalam­ove fight for their share of the ever evolv­ing trans­port en­vi­ron­ment.

GRAB, GO­JEK AND LALAM­OVE FIGHT FOR MAR­KET SHARE IN AN EVOLV­ING TRANS­PORT AND SHOP­PING DIG­I­TAL EN­VI­RON­MENT

The Nation - - FRONT PAGE - ASINA PORNWASIN

THAI­LAND is one of the mar­kets with the high­est growth po­ten­tial in the re­gion for ride-hail­ing and onde­mand food de­liv­ery busi­nesses as Singapore-based Grab, the GET app backed by In­done­sia’s Go­jek, and Hong Kong-based Lalam­ove fight in­tensely to gain mar­ket share in the King­dom.

Grab: from ride hail­ing to su­per app

Launched as a ride-hail­ing ser­vice, Grab has grown to be­come South­east Asia’s “de­ca­corn”, a startup val­ued at over US$10 bil­lion as it trans­forms into a su­per app for peo­ple’s ev­ery­day lives. It now of­fers not only on-de­mand trans­port but on-de­mand food and ser­vice de­liv­ery in 336 cities in eight coun­tries in­clud­ing Thai­land. In Thai­land, Grab’s ser­vice is avail­able in 18 cities within 16 prov­inces.

Grab boasts 9 mil­lion driv­ers and mer­chants across South­east Asia, and the plat­form has been down­loaded 144 mil­lion times, with about half of that num­ber ac­counted for by Thai­land.

Tarin Thaniyavarn, coun­try head of Grab Thai­land, said the plat­form serves the daily needs of Thai peo­ple. At the first quar­ter of 2019, the com­pany had grown 17 times over the same pe­riod in 2018, and is com­mit­ted to con­tinue its rapid growth, said Tarin. The star per­form­ers are the ride-hail­ing and food de­liv­ery ser­vices.

The Thai mar­ket po­ten­tial has so far been lim­ited by trans­port reg­u­la­tions. If those lim­i­ta­tions were un­locked, the growth of the ride-hail­ing sec­tor in Thai­land would be dra­mat­i­cally in­creased, said Tarin.

Af­ter six years in the Thai mar­ket, Grab’s cur­rent strat­egy is to mar­ket its on-de­mand trans­port ser­vice as a plat­form for tourists. The com­pany suc­cess­fully tri­alled the ser­vice in Buri Ram, and other prov­inces, last Oc­to­ber dur­ing the Mo­toGP Buri­ram event. Some 200,000 tourists in the prov­ince trav­elled us­ing Grab’s ser­vice.

“In Buri Ram, there are only 15 taxi ve­hi­cles, and 100,000 in­di­vid­ual ve­hi­cles. Our so­lu­tion was to help turn the ex­ist­ing [trans­port] in­fra­struc­ture into a [trans­port] fa­cil­ity to serve tourists. Dur­ing the trial pe­riod, 220 Grab ve­hi­cles helped trans­port 15,000 tourists over a week-long pe­riod and helped cre­ate trans­port spend­ing of around Bt600,000,” said Tarin.

He said the pro­ject’s suc­cess will serve as a model ap­proach for other tourism cities through­out Thai­land, help­ing cre­ate eco­nomic ben­e­fits for the lo­cal cities and dis­trib­ute the in­come to lo­cal peo­ple. This model is to help cre­ate eco­nomic for lo­cal cities and dif­fuse the in­come to lo­cal peo­ple. Mean­while, tourists will get peace of mind from a se­cure ser­vice, stan­dard prices and con­ve­nient pay­ment that comes with the stan­dard ride-hail­ing ser­vice.

“We will bring this model to ne­go­ti­a­tions with the gov­ern­ment. This model ad­dresses traf­fic prob­lems in the city, dif­fuses rev­enue to lo­cal peo­ple and fa­cil­i­tates tourists [visit­ing] cities across the coun­try. Tourism con­trib­utes around one-fifth of the coun­try’s gross do­mes­tic prod­uct (GDP) each year. We will ex­pand this model in 16 cities in eight prov­inces [where we have] ser­vice foot­prints,” said Tarin.

He said the com­pany is re­sisted in Thai­land, de­spite hav­ing con­trib­uted to the coun­try through pay­ing in­come tax, hav­ing col­lab­o­ra­tive projects with the gov­ern­ment such as a co-mar­ket­ing cam­paign to pro­mote tourism in emerg­ing prov­inces with the Tourism Au­thor­ity of Thai­land (TAT), and col­lab­o­rat­ing with the lo­cal gov­ern­ment ad­min­is­tra­tions in Buri Ram to of­fer on-de­mand trans­port dur­ing the Mo­toGP Buri­ram event.

Un­der the su­per app con­cept, Tarin said, Grab has moved be­yond onde­mand trans­porta­tion to also em­pha­sise its on-de­mand de­liv­ery ser­vices for food, gro­ceries, and par­cel de­liv­ery. Thais place around 10 mil­lion or­ders monthly for all kinds of Grab ser­vice.

Grab Food, an on-de­mand food de­liv­ery ser­vice, has be­come the ris­ing star busi­ness for Grab Thai­land with 40-times growth in 2018. It re­ceived more than 3 mil­lion or­ders and com­pleted trans­ac­tions last year.

“We pi­loted Grab Food in 2017 be­fore of­fi­cial launch­ing it in 2018, and be­came the mar­ket leader in the third quar­ter of last year. In the first quar­ter of 2019, we also surged in our growth. In only one week dur­ing the Chi­nese New Year in 2018 in Thai­land we de­liv­ered 800,000 dishes to peo­ple,” said Tarin.

The com­pany part­nered with Cen­tral Group to ex­pand its Grab Food mer­chant base and to of­fer a mul­ti­stop food or­der­ing ser­vice with Cen­tral Restau­rant Group. Cur­rently, Grab Food is avail­able in only Bangkok, Chi­ang Mai and Khon Kaen, but this year it will ex­pand its on-de­mand food de­liv­ery ser­vice to at least an­other six cities in its foot­print. It also plans to of­fer new ser­vice in­no­va­tions such as Grab Kitchen, sched­uled to roll out in the third quar­ter of this year. It aims to ex­pand col­lab­o­ra­tion across food­sup­ply chains to strengthen the food de­liv­ery ecosys­tem.

Ad­di­tion­ally, Grab Ex­press, an onde­mand par­cel de­liv­ery ser­vice, launched in July 2018, and is grow­ing as e-com­merce and on-de­mand lo­gis­tics ser­vices be­come in­creas­ingly pop­u­lar. Mean­while, the Grab Pay pay­ment and fi­nan­cial ser­vices, a joint in­vest­ment be­tween Grab and Kasiko­rn­bank, and Grab Re­ward, a cus­tomer re­la­tion­ship man­age­ment (CRM) plat­form, are also on track to ex­pand this year.

Ag­gres­sive in­vest­ment

Re­gion-wide, the com­pany plans a rapid ex­pan­sion through­out South­east Asia and has an­nounced plans to raise US$6.5 bil­lion (Bt206.6 bil­lion) in cap­i­tal by the end of this year. Grab will also seek to invest aggressively, with a com­mit­ment to make at least six in­vest­ments or ac­qui­si­tions across the re­gion in 2019.

Un­der­pin­ning Grab’s growth is the back­ing of SoftBank and other key strate­gic in­vestors who have put in over $4.5 bil­lion in Grab’s cur­rent Se­ries H round. Last month, Grab se­cured a $1.46 bil­lion in­vest­ment from the SoftBank Vi­sion Fund. Grab’s part­ner­ship with SoftBank runs deep, and the two com­pa­nies have been work­ing to­gether since 2014.

An­thony Tan, Grab’s co-founder and CEO, said that the sup­port from strate­gic in­vestors like SoftBank and oth­ers, will al­low Grab to grow very aggressively this year across ver­ti­cals of pay­ments, trans­port and food.

“At our cur­rent growth rates, we ex­pect to be four times big­ger than our clos­est com­peti­tor in In­done­sia and across the re­gion by the end of the year. As we grow to be­come the lead­ing su­per app in South­east Asia, we see mas­sive op­por­tu­ni­ties to ex­pand our busi­ness and con­tinue to serve our cus­tomers, driver-part­ners and mer­chants across South­east Asia,” said Tan.

Grab pres­i­dent Ming Maa said that among other key mar­kets, In­done­sia in par­tic­u­lar will see Grab invest a sig­nif­i­cant por­tion of fresh pro­ceeds. Grab’s In­done­sian busi­ness is ex­pand­ing rapidly, with rev­enue more than dou­bling in 2018. GrabFood is ex­pe­ri­ence rapid growth in that na­tion, op­er­at­ing in 178 In­done­sian cities, up from 13 at the start of last year, and with de­liv­ery vol­umes grow­ing al­most 10 times in 2018.

“In line with the tremen­dous trans­for­ma­tion that South­east Asia is cur­rently un­der­go­ing, the op­por­tu­nity is ripe for us to fur­ther grow in do­mains like health­care and fi­nan­cial ser­vices among oth­ers. We are set to make at least six in­vest­ments or ac­qui­si­tions this year, and raise $6.5 bil­lion in to­tal cap­i­tal by the end of the year,” said Maa.

GET: a sec­ond choice for su­per app

GET is an on-de­mand multi-ser­vice ap­pli­ca­tion de­vel­oped for Thai­land, driven by a Thai found­ing team and backed by Go­jek’s tech­nol­ogy, ex­per­tise and in­vest­ment. GET pro­vides a range of ser­vices, in­clud­ing onde­mand trans­porta­tion (GET Win), food de­liv­ery (GET Food), parcels (GET De­liv­ery) and fi­nan­cial ser­vices (GET Pay).

Pinya Nit­tayakaset­wat, co-founder and chief ex­ec­u­tive of­fi­cer of GET, said it is ex­pand­ing ser­vices to cover all of Bangkok’s dis­tricts in re­sponse to grow­ing de­mand. GET will soon be op­er­at­ing in all 50 dis­tricts in Bangkok, of­fer­ing GET Win, GET Food and GET De­liv­ery. GET of­fi­cially launched its ser­vices in Fe­bru­ary and af­ter just one month, the com­pany saw 65-per-cent growth in user num­bers, with the to­tal num­ber of its app down­loads ex­ceed­ing 300,000.

“We are a su­per app, we of­fer a plat­form to users that in­cludes food, mes­sen­ger, trans­porta­tion, and pay­ment,” sums up Pinya.

GET is con­tin­u­ing to im­prove its ser­vice qual­ity, in­clud­ing tweaks to ser­vice speed and price. Cur­rently, more than 10,000 driv­ers are reg­is­tered on the GET plat­form.

GET was founded with the goal of us­ing tech­nol­ogy to im­prove peo­ple’s lives in Thai­land, by pro­vid­ing ac­cess to prod­ucts and ser­vices, cre­at­ing more value for so­ci­ety by pro­mot­ing ef­fi­ciency and pro­duc­tiv­ity, and im­prov­ing fi­nan­cial in­clu­sion.

GET aims to of­fer a choice that ben­e­fits Thai con­sumers. Users have more choices and that has forced GET’s ri­vals to im­prove their qual­ity of ser­vice and re­duce their prices.

The ride-hail­ing pen­e­tra­tion rate in Thai­land is only 3.6 per cent of the to­tal pop­u­la­tion, while food de­liv­ery is only 1.6 per cent. Other South­east Asian coun­tries – Singapore, In­done­sia, Viet­nam, the Philip­pines and Malaysia – have dou­ble-digit pen­e­tra­tion. Tai­wan has 60 per cent pen­e­tra­tion in food de­liv­ery. For Thai­land, it is ex­pected to grow to dou­ble-digit par­tic­i­pa­tion.

There are two key rea­sons for the adop­tion lag in Thai­land. The first is­sue is that gov­ern­ment reg­u­la­tions are not yet open to ride-hail­ing; the sec­ond is that Thais have more spe­cialised needs that re­quire in­no­va­tion in food de­liv­ery ser­vices.

“Thai­land re­mains a mar­ket with a lot of room to grow, and the com­pe­ti­tion is good for the mar­ket and for con­sumers and the sup­ply chain and gov­ern­ment,” said Pinya.

In Thai­land, only mid­dle- to up­per­in­come peo­ple can or­der food via apps due to the need to pay a Bt60 de­liv­ery ser­vice fee. GET’s mis­sion is to of­fer in­no­va­tion in food de­liv­ery ser­vice in or­der to lower that price point to reach the larger mar­ket of lower-in­come peo­ple and to let them to ben­e­fit from the off­line to on­line plat­form.

“Our lat­est ad­di­tion, GET Food, has con­trib­uted a great deal to this growth,” said Pinya. “Our fo­cus is to de­liver the most con­ve­nient and seam­less ex­pe­ri­ence for GET Food users, and our av­er­age de­liv­ery time is 28 min­utes, which is above the in­dus­try stan­dard. We have strong trac­tion with lo­cal SMEs, as 70 per cent of our food mer­chants are street-food ven­dors and small to medium-sized restau­rants. Our top restau­rants en­joyed an av­er­age de­liv­ery sales in­crease of roughly 40 per cent.”

GET’s driv­ers get more in­come and ben­e­fits, in­clud­ing in­surance and emer­gency fund­ing. Mean­while, small and medium-sized food and bev­er­age play­ers ben­e­fit from GET, since around 50 per cent of its pop­u­lar food or­ders are street food and 40 per cent are bev­er­ages.

“Their sale rev­enue is in­creased and we pro­vide data back to them about which menu is pop­u­lar, who their cus­tomers are, and how to ex­pand their on­line cus­tomers. We get very good feed­back from them and we aim to en­cour­age a lot more SMEs to get on our plat­form. We fo­cus on the ‘long­tail’ busi­ness,” said Pinya.

The beauty of GET is that it can help the most pop­u­lar restau­rants on its plat­form in­crease their rev­enues by 40 per cent, while GET mes­sen­gers also help de­liver items and goods from so­cial com­merce in Thai­land. Mean­while, its driv­ers can dou­ble their in­come through join­ing GET.

“Com­pe­ti­tion is good for con­sumers. We’ve be­come an­other choice for con­sumers. The trend of O2O in Thai­land is still young and has a lot of room to ex­pand,” said Pinya.

Lalam­ove: fo­cus on de­liv­ery ser­vice

Lalam­ove has been in the Thai mar­ket since 2014 and grew 2.5 times in 2018. Cur­rently, Lalam­ove is avail­able in 11 cities in nine coun­tries through­out the re­gion, and more than 100 cities in China.

The com­pany cur­rently fo­cuses on an on-de­mand de­liv­ery ser­vice for cities, and is not aim­ing to be­come a su­per app, said San­tit Ji­ra­wongkraisorn, com­pany co­founder and re­gional di­rec­tor. Onde­mand de­liv­ery is the com­pany’s strength and the com­pany is a mi­nor part – at 5 per cent – of the over­all lo­gis­tics in­dus­try. Yet, given that lo­gis­tics is a large in­dus­try con­tribut­ing around 10 to 20 per cent to the coun­try’s GDP, there is a lot of op­por­tu­nity for Lalam­ove to grow its busi­ness.

Lalam­ove of­fers on-de­mand food and par­cel de­liv­ery, but in con­trast to other play­ers, does not pro­vide per­sonal trans­port.

That fo­cus is both the strength and the area dif­fer­en­ti­at­ing Lalam­ove from its com­peti­tors.

Cur­rently, some 80,000 driv­ers in Bangkok have joined Lalam­ove.

“We fo­cus on the re­li­a­bil­ity of the plat­form, the ser­vice qual­ity of the driv­ers, and our ser­vice sup­port and call cen­tre to en­sure our cus­tomers get good ser­vices,” said San­tit.

In 2018 alone, its to­tal trans­ac­tion fees were around Bt1.5 bil­lion. In­di­vid­ual trans­ac­tion fees are around Bt100 to Bt200 de­pend­ing on dis­tance.

“We are not competing to be a su­per app since we do not of­fer a trans­porta­tion ser­vice, just de­liv­ery of food and parcels We are also not competing with lo­gis­tic busi­nesses since we have a dif­fer­ent busi­ness model. Our busi­ness is a shar­ing model – we cre­ate and pro­vide a plat­form and build an ecosys­tem in­clud­ing driv­ers, mer­chants and con­sumers. We do not invest in or own phys­i­cal in­fra­struc­ture,” ex­plained San­tit.

The app fo­cuses on speed or the time to de­liv­ery, aim­ing for stay­ing within 60 min­utes. Its main sup­pli­ers and cus­tomers are small busi­nesses and restau­rants.

“We fo­cus on how to make our ser­vice bet­ter rather than fo­cus­ing on our com­peti­tors. The com­pe­ti­tion is tighter and big play­ers come in,” said San­tit. The com­pany is plan­ning to ex­pand ser­vices to na­tion­wide this year in Thai­land.

Mean­while, the com­pany en­tered In­dia ear­lier this year and plans to ex­pand to more coun­tries out­side South­east Asia, in­clud­ing Aus­tralia, Eu­rope and the Amer­i­cas. It also will in­tro­duce ad­di­tional new ser­vices to Thai­land and the re­gion, such as sell­ing ve­hi­cles to driv­ers as it is do­ing in China.

“We also have the Lalam­ove e-wal­let but we use it within our closed sys­tem with driv­ers, mer­chants and con­sumers. We are not now fo­cused on pay­ment ser­vices,” said San­tit.

Some 28 mil­lion Lalam­ove apps have been down­loaded glob­ally, with 2.5 mil­lion of them in Thai­land.

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