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Go-Jek in Singapore: ‘Caution needs to be exercised in order to not look too cheap’

Goodbye Uber, hello Go-Jek. It seems like days after the confirmation came on Uber being bought over by Grab, Indonesian ride hailing firm Go-Jek, backed by Alphabet’s Google and China’s Tencent Holdings, is looking to make its play for the greater Southeast Asian market.

Currently, the eight year old Indonesian company caters to consumers by getting drivers to deliver everything from food to appliances.

According to Reuters, as seen in an internal memo, the official announcement of its expansion will come in a few weeks. The memo, penned by Go-Jek chief Nadiem Makarim, shared that the company will also be expanding to three other SEA countries. Local newspaper The Straits Times speculates this to be Thailand, the Philippines and Vietnam.

Industry players Marketing spoke to say the move will be a welcomed one from the eyes of the consumers, as many might worry that Grab will now have all the power. As such, it is likely consumers would welcome a competitor to keep prices and service levels in check.

“Whenever two large brands merge there are always a number of consumers that want more competition in the market. Some people will view the Uber and Grab merger with a level of scepticism,” Nick Foley, president of Southeast Asia Pacific and Japan at Landor, said.

“Go-Jek is well positioned to capitalise on this and build its offer in Singapore,” he said. However, for the Indonesian company to succeed in a market like Singapore, its offerings will need to adapt due to consumer lifestyles and choices.

“ What works on the streets of downtown Jakarta will be different to Singapore. The original Go-Jek offer is very different from Uber and Grab,” he said, adding:

Caution needs to be exercised in order to not look too cheap.

Foley added that if Kuala Lumpur, for example, is a market the brand is looking at, the challenge might be lesser as it is likely to feel more familiar in that market.

In all new Go-Jek markets, Foley explained, the brand needs to feel suitably different to Uber and Grab. This, he added, shouldn’t be difficult as Uber has always suffered from connotations of being corporate and faceless.  The Grab brand, on the other hand, will have to pivot in regards to how it manages the Uber hangover.

Foley added, “Go-Jek feel genuinely from Southeast Asia. Grab could find itself depositioned quite easily as Go-Jek seeks to expand its geographic footprint within the region.”

Meanwhile Tobias Wilson, CEO of APD Singapore added that one area Grab has succeeded in from the very beginning was to be seen as the local option by tapping into cultural nuances and leveraging those in each of the markets around SEA.

“Because of this strategy, no matter where you were, people thought Grab was from that country and I think that allowed them to gain huge amounts of mental traction vs their big bad American competitor,” he said. However, he added, given the recent acquisition of Uber, the market is at point where consumers are worried that things are going to change and that Grab won’t be about the people anymore. This represents a huge opportunity for Go-Jek.

He added that if Go-Jek plays to the cultural nuances of each market, and keeps the new super-entity on its toes, “it would have a good chance at picking up a nice slice of the market while Gruber is now busy getting their affairs in order.”

Dinesh Sandhu, managing director of DIA, is however skeptical that the move into Singapore will materialise given the government is “acutely conscious of the noise and air pollution caused by two wheelers.”

“Singapore is intent on reducing its carbon footprint and vehicular population over time, so a move to allow an entrant like Go-Jek into the market is unlikely. COE prices for motorcyles have remained relatively stable despite speculation in the news of Go-Jek’s imminent entry into the market. The Government has also stated that they don’t see the recent spike in motorcycle COE prices as unnatural,” he added.

Go-Jek’s best bet for exponential growth lies in the emerging markets of Southeast Asia without question.

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