GrabTaxi has just raised its largest ever funding of more than US$350 million from US investment firm Coatue Management, China’s sovereign wealth fund, China Investment Corporation and China’s top Uber rival, Didi Kuaidi. This brings GrabTaxi’s total funding to about US$700 million and makes it one of the best-funded start-ups in the history of Southeast Asia.
According to the company, the funds will be used to rapidly grow the company’s offerings and replicate GrabTaxi’s taxi product line in the region and expand its engineering offices across Singapore, Malaysia, Vietnam and Beijing. Through the funding, the company hopes to address some of the region’s transportation challenges.
“Diversifying into private cars and motorbikes has allowed us to touch people of varying income levels and commuting needs,” said Anthony Tan, group CEO and co-founder of GrabTaxi.
He added that such investments were not only a statement on GrabTaxi’s dominance in the region, but also the growth potential of Southeast Asia on a global level.
Currently available under the GrabTaxi umbrella is GrabBike, a motorbike taxi booking service available in Vietnam, Indonesia and Thailand, markets where motorcycle taxis are a very popular form of commuter transportation.
Meanwhile, in markets such as Singapore, services such as GrabCar, a private hire vehicle service, have been made available and are increasingly being used. The service mimics that of rival Uber, which has long used private vehicles to shuttle consumers to their destinations.
In a conversation with Marketing, Ryan Lim, founder of QED Consulting, said that while the businesses might look similar from an outsider’s perspective, they differ in their target audience. Uber is known to attract a more premium international expatriate crowd whereas GrabTaxi, and even GrabCar, are more for the convenience for the everyday locals.
He noted that Uber’s strength is its global presence, and consumers being creatures of habit, will stick to services they are familiar with, explained Lim.
Prantik Mazumdar, managing partner of Happy Marketer, added that while Uber has had some PR issues globally, it is still very early in the game and it has built a robust global platform which has been lauded as a game-changer for the public transportation industry.
Moreover, with its recent US$50 billion valuation, the company also has access to a lot of resources that have fuelled its innovation and helped it scale.
“What I love about Uber is that the same app works wherever I go, its cashless payment system, the two-way rating platform, innovations like UberPOP (car pooling), UberEATS (food delivery service), and its partnership with Spotify provide a very smooth and impactful service. The company has been one step ahead in solving real world problems of commuters,” Mazumdar said.
“In my view, GrabTaxi and the likes are good solutions, but I would categorise them as ‘me too’ products, where they have managed to replicate Uber’s features, but not innovate beyond that. Hence, they have been entangled in a price war to acquire more drivers and passengers, which isn’t an idea position to be in.”
Meanwhile, according to Preetham Venkky, head of digital strategy and business at KRDS Singapore, GrabTaxi operates as a service provider, while Uber looks at its offering as a business platform.
While Uber is trying to solve logistics problems, GrabTaxi is still simply bringing consumers from one point to another, explained Venkky. One clear example of this was when Uber partnered with Chinese smartphone brand Xiaomi to sell its flagship Mi Note directly to Uber customers. When consumers ordered the Mi Note, all purchases were charged to the users’ Uber account and the handset was delivered via select Uber cars.
“Hence, the target audience and business potential of Uber is bigger than that of GrabTaxi’s,” he added.
So how can GrabTaxi innovate?
Mazumdar pointed out several ways for GrabTaxi to innovate itself in the SEA markets.
– Provide access to localised transportation solutions such as Ojeks in Jakarta and auto-rickshaws in India.
– Forge partnerships with other service providers such as hotels, restaurants, e-commerce vendors, schools and offices to strike large-scale corporate transportation deals with them to create a different niche all together.
– Address the critical aspect of safety in cars, which can have a huge impact in Asian markets, especially for women passengers.
– It can also integrate its apps with large social networks such as Facebook, Twitter, LinkedIn and WhatsApp to allow consumers to hail a car through those popular apps and have an option to share their journey details via those platforms.
– Lastly it can make rides more fun if they can publicly gamify the journeys and award drivers and passengers who are loyal to the brand.
– GrabTaxi should not just be focusing on expanding its user base, but also on converting its existing customers into a loyal community and adding value for them by making their travel experience safer, more social and more rewarding.
Ajit Varghese, CEO of Maxus, said that one key way would be for GrabTaxi be to reposition itself and push for customer-centricity.
He added the brand needed to get its positioning across to more people and build loyalty as increasingly it is becoming a cluttered market.
So, therefore, marketing would become critical in the near future to build a brand for the long term.