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GrabKios and GrabExpress among the main growth verticals for Grab, says Indonesia country director

Written by Ursula Florene Published on     6 mins read

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Grab Indonesia country managing director Neneng Goenadi shares what the company’s future could look like for the soon-to-be-listed firm.

During her nearly 30 years of experience leading businesses in Southeast Asia, Neneng Goenadi has always been passionate about the digital economy. She has seen how technology plays an essential role in today’s society, providing more options for businesses and citizens.

When she was offered the opportunity to join Grab in February 2019 as country managing director for Indonesia, she immediately jumped on the opportunity. She has been an admirer of how Grab’s technology has transformed and arguably improved many people’s lives and businesses in Indonesia, Goenadi told KrASIA.

“I wanted to be directly involved in the work Grab was doing to help Indonesia’s digital economy,” she said. Before Grab, she served as the country managing director for Indonesia at consulting firm Accenture for five years, where she was also the Asia Pacific head of inclusion and diversity for industry resources, and the ASEAN head of human capital and diversity.

In Grab Indonesia, she took over the position previously held by Ridzki Karmadibrata, who now serves as the company’s president. Goenadi’s main goal is to improve Grab’s corporate services and transport business, she said.

Indonesia’s digital economy market value is set to hit USD 124 billion by 2025, according to a joint report by Google, Temasek, and Bain & Co. The country also represents the region’s largest market with its 271 million inhabitants and over 196 million internet users, according to data by the Indonesian Internet Providers Association (APJII).

Leading the Indonesian market for Grab is a challenging task, considering the country’s importance for the firm. In 2020, Grab officially launched its second headquarters in Indonesia, accompanying its main headquarters in Singapore. Despite the potential that Indonesia holds, market penetration is not an easy feat. The country is still struggling with unequal access to the internet and digital literacy, among other challenges.

“Indonesia is indeed a very large country, and I believe I will not be the only leader to say that one of the key challenges of managing a business in Indonesia is the sheer size and highly spread-out geography of the nation,” Goenadi said. “We like to say that there are many markets within this market. Culture, demographics, and infrastructure can vary from city to city, and that can be complex to manage.”

In 2019, Grab managed to top local rival Gojek with a 64% market share of ride-hailing services, according to research firm ABI Research. Goenadi says that Grab’s position as the country’s top ride-hailing service provider hasn’t been challenged since then. Grab has also managed to fend off Gojek’s dominance in food delivery—a market they entered in 2016—with a 53% market share as of 2020.

Read more: All eyes on Grab | From a Harvard University project to a USD 40 billion business

A challenging year with different paths to recovery

The COVID-19 pandemic, however, has also impacted Grab, as ride-hailing demand plummeted across Indonesia, which led the company to let go of 5% of its regional team. Grab’s senior executives, including Goenadi, also took a salary cut of up to 20% in 2020.

The company has also abandoned its entertainment offerings provided under Hooq, as the Singaporean streaming service company filed for liquidation in March 2020. Thanks to a partnership between the two companies, Grab users could access Hooq’s video content from the Grab app since February 2019.

Even though Grab’s ride-hailing business has been recovering and is almost back to normal levels, Goenadi admitted that 2020 has been the most challenging experience in her two years as a manager of Grab Indonesia.

“Almost overnight, our transport business fell as micro-scale social distancing measures were implemented. Small businesses were hit by a drop in foot traffic, particularly those that didn’t have any online presence,” she said. “So we had to pivot quickly, not only to ensure that our driver-partners could sustain their livelihoods but also to protect the safety of our community.”

The dimmed light of the ride-hailing sector has, however, made other sectors shine brighter. Goenadi said that GrabKios, GrabFood, GrabExpress, and GrabMart will be Grab Indonesia’s main motors of growth.

The company has been holding a series of workshops and conferences to teach digital skills to small business owners who recently joined Grab’s network, either GrabMart, GrabFood, or GrabKios. Last year alone, there were more than half a million new merchants, many of whom were going online for the first time, Goenadi added. Grab has also partnered with local organizations to educate less tech-savvy customers.

“Our focus this year is on inclusivity. We are partnering with organizations like Sahabat UMKM to reach out to the elderly and those with disabilities, to provide tools and training to help them with their digitalization journeys.” Sahabat UMKM is an independent organization that helps small business owners connect and share growth tips.

Grab Indonesia is planning to establish a strong presence outside of metropolitan cities like Jakarta or Surabaya for its network of services. The firm is looking to enter more cities in the middle and eastern parts of Indonesia, such as Bau-bau in Southeast Sulawesi, and Polewali Mandar in West Sulawesi. For instance, Grab is courting more and more micro-stalls, also known as warung, to board its GrabKios platform. The service allows warung owners to offer digital products, including remittance, electricity, and insurance (BPJS) payments, phone credit top-ups, bill payments, gold savings, and insurance protection products.

“Increasingly, we are seeing GrabKios agents as an important node in supporting our goal in creating greater financial inclusion in Indonesia. Because of the geographical spread of the nation, as well as the cultural and demographic differences across cities, our GrabKios agents have an important role to play in encouraging the adoption of digital and financial services, as they can be a point of convenient access for users when they need it,” she said.

To date, the company has more than 2 million GrabKios agents, including its driver-partners. Goenadi sees this as an opportunity for drivers to supplement their earnings during the pandemic.

As for deliveries, Goenadi said the company will increase its local footprint. “In the coming months, we will be rolling out GrabMart and GrabAssistant in more cities to serve more consumers. We will also enable more MSMEs to leverage our platform and logistics network to reach more consumers,” she added.

Grab’s parcel delivery service, GrabExpress, will also see new features aimed to make last-mile deliveries more accessible and affordable for businesses. “Last year, as the pandemic gave rise to more home-based businesses, we realized that many social sellers were using GrabExpress to deliver their products to consumers,” she said.

Adopting an idea that Grab Philippines first started, Grab Indonesia also set up the Klub Juragan GrabExpress, a dedicated community to support MSMEs and social sellers. Today, more than 10,000 business owners have registered under this program, which offers merchants special training programs such as business management and social media marketing.

Grab has no interest to re-enter the entertainment segment, either by partnering with another streaming platform or other means. The company will focus on “daily services that resonate with our consumers,” and entertainment is just not one of them, Goenadi said.

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Looking to the overlooked markets

In the first quarter of 2021, Grab expanded to 24 new cities, mostly small towns located in East Indonesia. The company has also made a minority investment in e-wallet LinkAja, which has a strong presence in tier-2 to tier-4 cities, complementing Ovo, Grab’s e-wallet investee with a strong performance in tier-1 areas.

“Indonesia is so vast, and cash is still king. If we really want to accelerate Indonesia towards a cashless society, it is necessary to foster an open fintech ecosystem and work together with like-minded partners to advance the shared goal of improving financial inclusion in Indonesia. Partners like OVO and LinkAja offer different strengths and portfolios of use cases,” she added.

“We also see GrabKios as a key differentiator for us. By leveraging warung, which you can find in every neighborhood in the country, we can help make digital and financial services more accessible to every community in Indonesia,” Goenadi said.

Looking also into the environmental aspect, the company has announced plans to run a fleet of 26,000 electric vehicles by 2025. Currently, the firm operates more than 5,000 EVs, ranging from electric cars, scooter bicycles, and bikes. “In 2021, we are also planning to operate an additional 1,500 two-wheel electric vehicles in Indonesia,” Goenadi said.

Grab has also collaborated with crowdfunding platform Benih Baik and independent research institute World Resources Institute (WRI) to launch a carbon offsetting program. Grab users can calculate the carbon footprint of their transport usage, which will be converted into voluntary donations for tree planting partners facilitated by WRI Indonesia.

With the recent announcement of a SPAC merger and upcoming US listing, Goenadi is confident with Grab’s future in Indonesia. “We’re proud to represent Southeast Asia in the global public markets. Going public will give us wind in our sails to accelerate our mission of empowering everyday entrepreneurs and bringing financial inclusion to the millions of unbanked and underbanked across Southeast Asia. At the same time, we will maintain our focus on building a sustainable business in the long term,” she added.

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