The spectacular battle for dominance in the region’s ride-hailing market was put to bed a few days ago when Grab took over Uber’s Southeast Asian operations.
The wait is finally over. After weeks of speculation that Uber’s Southeast Asia’s operations would be sold off to Southeast Asian ride-hailing giant Grab, the deal – the largest of its kind in the region – was officially announced earlier today.According to the media release from Grab, Uber’s ridesharing and food delivery business (UberEats) will be integrated into its existing multi-modal transportation and fintech platform.
2017 was an exciting year for the e-commerce landscape in Southeast Asia.
Microfinance is described by the Financial Times Lexicon as a service where financial institutions will back small start-ups and would-be entrepreneurs with small loans, in the poorest parts of the world. In Southeast Asia, the biggest microfinance players currently include Asia Pacific-based LenddoEFL, Singapore's CredoLab and the Philippines’ Lendr, for example. To add to this mix, Singapore-based ride-hailing service Grab will now join the fray.
The news of an impending acquisition by Grab of Uber's Southeast Asian business is now drawing the scrutiny of Southeast Asian regulators. Their concern is that a monopoly on ride-hailing services would hurt instead of benefit consumers in the long run. According to reporting by the Wall Street Journal, Uber is said to have agreed to sell most of its Southeast Asian operations to Grab, in exchange for between 20-30% of Grab’s equity.
The competition between ride-hailing apps in the region could slowly become a one horse-race as the tech world has been rocked with rumours of Uber exiting the region. The speculation began after Japan’s SoftBank made a US$1.25 billion investment in Uber that effectively made them the company’s largest shareholder.
Mobile ride-hailing applications are modernising and enhancing urban transportation systems in Southeast Asia. In Indonesia, 250 million people have embraced the use of apps such as Grab, Go-Jek and Uber, according to a 2018 ecommerceIQ (eIQ) - a market research brand dedicated to ecommerce - report.
Public transportation in the region will see a drastic change over the next few years.
Southeast Asia is fast becoming one of the most dynamic and industrialised regions in the world. Contributing to this rapid pace in development is a growing car market driven by an increase in demand for automobiles. Besides that, strategic partnerships are also paving the way for the introduction of new technologies that look to improve the mobility of Southeast Asians.
With increased digitisation of services these days it was only a matter of time before digital payments caught up. Digital payments are transactions of monetary value conducted via electronic means. These are expected to bring in US$32 billion in revenue to Southeast Asia by 2021, according to Euromonitor. To capitalise on it, Ant Financial’s Alipay and Tencent’s WeChat entered the market with an initial focus on Chinese tourists to the region.
Grab first started out as MyTeksi in Malaysia. Its founder Anthony Tan started the business to improve on the poor state of the existing taxi system here, and to provide better security for women, whenever they used public transport. Grab’s initial strategy to use technology to overcome these issues has since proven itself across still-developing Southeast Asia. As of 2017 the company holds 72% of market share in private vehicle hailing across a total of 156 cities in the region.
Southeast Asia’s internet economy, spanning online travel to ride-hailing, will reach $50 billion this year, putting it on a solid trajectory to grow fourfold by 2025, according to a joint research report by Google and Temasek Holdings Pte.As more consumers buy airline tickets and book hotels through smartphones, the region’s online travel market expanded from $19.1 billion in 2015 to $26.6 billion in 2017, according to a report the two companies released Tuesday.
