Singapore-headquartered mobility platform Grab is speeding up in the fast lane as competition steepens in the Southeast Asia region, which might partially be a result of its archrival Go-Jek’s strong expansion push. Taking Go-Jek’s recent foray into Singapore for instance, local drivers hopped quickly onboarding Go-Jek’s ship, according to the Straits Times.
Grab, itself, today has very bold ambitions. It likens itself to a technology-based firm that offers a wide slew of services that covers all three aspects of mobility – 1) the physical, 2) the economic/financial and 3) the social. Grab users now enjoy ride-hailing, financial, and marketplace-like services all just by clicking on the Grab app. City life for Grab users across the region has never been more convenient.
The firm claims more than 125 million in terms of mobile downloads to date. It is also working with over 8.5 million micro-entrepreneurs across the region.
As services expand, customers will only get more demanding; competition will escalate; the company that fails to innovate itself will only lag behind. Research & Development (R&D) is becoming more of a necessity than just a “good to have”.
R&D strategy
Grab’s target market has always been Southeast Asia. However, when it comes to developing the optimal strategy for its R&D, the company has a more globalized mindset. About 3 years ago, Grab took a leap of faith launching its first R&D center outside of the SEA region, in China’s capital – Beijing. The experiment worked well and it has 7 R&D centers (Bangalore, Ho Chi Minh City, Jarkata, Malaysia, Seattle, Singapore, and Beijing) globally to date.
Each R&D center has its own set of unique tasks, allowing Grab to tap on the international talent pool. This is important as SEA might not have the tech talents that have the wealth of experience in scaling products to cater to large populations as compared to their Chinese counterparts.
Grab’s Beijing R&D focuses on mapping and food delivery technologies such as supply chain, on-demand staffing, etc. These are areas where China has a clear comparative advantage in. On one hand, tech giants like Ele.me and Meituan-Dianping has developed efficient food delivery support technologies to meet the demands of China’s burgeoning city dwellers. On the other, mapping is the core technology that enables Didi Chuxing to support the massive ride-hailing demands in China.
One example can be Bangalore’s engineers that are tasked with working to better mobile technologies that are suited for SEA consumers. In Seattle, for example, engineers work on data safety and security, an area where there tends to be a higher focus on in the tech space there.
This global perspective drives Grab’s underlying R&D mission. It seeks to leverage both the strengths and talents around the world to serve its core objective. Some of these include bettering its services to for its users; integrating its wide array of services in an efficient and sustainable manner.
Super app dream
The race to become the everyday app began pretty much in China. Apps like WeChat, Meituan etc have encompassed features to satisfy many daily needs of the Chinese locals. That’s where Grab got the idea to expand its service offerings beyond just transport, with a bigger dream of becoming the app that people need to enjoy a convenient lifestyle in Southeast Asia, according to Grab President Ming Maa.
That said, the firm remains pragmatic in its approach to achieving this huge goal. Rather than doing everything by itself, Grab is actively looking at partnerships, strategic tie-ups, launching accelerator programs amongst others to boost the service offerings on the Grab app. The main benefit that Grab provides to its partners is: the extensive network that it has built in the region and its experience at scaling up a business. Some notable partners include HappyFresh among others that joined its open platform initiative.
In addition to the partners on its open platform, on its way driving closer to the super app dream, Grab also signed up a long list of investors who double as its strategic partners. Booking Holdings is one that allows Grab to move into the travel booking space; the partnership with China’s Ping An is targeted at addressing the healthcare gap in Indonesia.
Another example of Grab’s realistic pathway lies in how the firm expands its service offerings. Maa told KrASIA about how locals in the SEA region often do not have sufficient cash to buy smartphones that can hold a lot of apps. They usually keep those “more useful” apps to save space. Thus, when making the decision of adding new services, its relevance must be first determined, before opening up the services for people.
It is worth highlighting how Grab’s method is, in fact, very similar to Go-Jek. The Indonesia-based rival, like Grab, relies heavily on applying data analytics to understand the user base before providing new services. And with that strong understanding of the Indonesian market, the Go-Jek app has close to 20 different on-demand services that cater specifically to its domestic market.
The game played by the tech giants in the region has reached a tipping point. Grab’s entry into other verticals and Go-Jek’s expansion plans only speeds up the route to the convergence of services. The eventual long-term winner, then, is really the one with the “better” R&D prowess, since that’s one of the cornerstones behind superior services that eventually will help an upstart stand out from the competition.
Editor: Ben Jiang