Entrepreneurship, Featured, Gig Economy, Opinions, Uncategorized

How a startup from Southeast Asia managed to defeat Uber

June 12, 2021January 22, 2022By Homam Alghorani
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How a startup from Southeast Asia managed to defeat Uber

Grab a Singapore based e-hailing, food delivery and more is now gearing up to be listed on Nasdaq (GROTHAUS, 2021), prior to that this startup which was founded in 2012 by Anthony Tan and Tan Hooi Ling managed to defeat and buy Uber Southeast Asia operation on 26th March 2018 (Mansuri, n.d.).

Grab idea started at Harvard when Anthony and Hooi Ling won second place at the Harvard Business Plan Competition 2011 with a cash prize of US$ 25,000 (Mansuri, n.d.).

Later in 2012 Tan and his cofounder returned to Malaysia and started Grab which was known as MyTeksi or GrabTaxi (Later renamed to Grab) which was launched between taxi drivers first and within 2 years they managed to go international entering Singapore, Indonesia, Vietnam, and others (brand360.com, n.d.).

Grab was backed by SoftBank as one of its largest investors has quickly become the dominant transportation and delivery app in Southeast Asia, operating in countries such as Singapore, Thailand, Vietnam, Myanmar, Malaysia, Cambodia, Indonesia, and the Philippines. (GROTHAUS, 2021)

Uber vs. Grab: The e-hailing War

When Uber entered the Southeast Asian market in 2013, Grab and other e-hailing services were just starting, Grab thought it’s a “game-over” for them, and they will be out of the market (Mansuri, n.d.).

Uber Branding

Uber brad can be perceived as an upper-class service as it initially focused on luxury cars, in fact, Uber in German means “above” and in the American slang it means “superb”, Uber service was very attractive for expats and tourists since they are already familiar with Uber and they already have the App when they travel and move to the region.

This elite branding applied also to the professionals and upper class, it was more about experiencing a world-class service, it was an innovative and forward-thinking branding (brand360.com, n.d.) this can be very clear when we look at Uber ads in Southeast Asia.

Uber billboard ad on the building of shopping mall in Malaysia

Grab Branding

The biggest advantage that Grab had over Uber is its understanding of the local culture and its access to local expertise. Not only that, in addition to that Grab approach was very different from Uber, Grab took a more friendly and fun approach, the brand was humble which connects with Southeast Asia culture, it’s not about luxury, it’s like a friendly ride with you next-door neighbor (brand360.com, n.d.), also Grab played the incentives game and rewarded the users with discount codes and provided cash payment, the cash was king at that time for the consumers, drivers and Grab too (Mansuri, n.d.).

Grab ads were more fun and colorful, they were taking advantage of the latest trends which connected with the big young generation of Southeast Asia.

Grab partnered with Disney  to make the interface themed with the StarWars movie
Another Ad for Grab using StarWars movie

Conclusion 

Uber lived in its US bubble and thought it can just copy its success in the US and replicate it in Southeast Asia without spending enough effort on localizing the service and makes it appeal to the regional culture

Uber’s exit was not a failure in fact it gained about $1billion USD as of 2019, that’s because on the exit deal it got a 30% stake in Grab for $2.28 billion. Grab’s 2019 valuation was $14 billion, so that means Uber’s stake is already worth $3.22 billion, a nearly $1 billion jump on paper in just a year (Russell, 2019). Today Grab is worth $40 billion which will be a great win for Uber (pymnts.com, 2021).

Grab persistence and positive attitude their understanding of the local culture gave them an upper hand in dominating the e-hailing market in Southeast Asia, it’s also worth noting that Anthony Tan is the son of the Tan Chong family a Malaysian wealthy family the owner of Tan Chong Motor Holdings Berhad is a car distributor for many automobile manufacturers like Nissan and Renault, that gave them also a unique position and strong connection network that helped them in their battle.

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