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Can MyTeksi sustain both its car and taxi businesses?

A group of taxi drivers participated in a protest against GrabCar outside its holding company MyTeksi’s office to demonstrate their grievances over the company’s GrabCar chauffeured service, Malaysian daily The Star reported.

The taxi drivers accused GrabCar, which charges a lower rate, of taking away most of their business. According to GrabCar’s website, an economy-type vehicle charges a lower base rate of RM2.30 and RM0.97 per kilometre of ride, compared to a standard taxi with a flag-down rate of RM3 and charges RM1.25 per kilometre.

“Our business has dropped about 60% since the service started last year,” said cabbie Ricky Subramaniam, who is currently using MyTeksi service to get customers, told The Star.

In an interview with The Star, another cabbie Rajarethinam Krishnan said, “We are here to protest GrabCar and Uber. These are illegal services.”

This case of brand competition between sister companies is not uncommon, however, how should MyTeksi juggle its businesses without having one cannibalising the other?

Dominic Twyford, country director, Landor, said, “The way for companies to ensure that they don’t cannibalise their brands is to tap in to the mode or need state of the consumer. If this can be achieved you attract new customers rather than steal existing customers.”

Cannibalising your own brand could be a good move

Meanwhile, Lawrence Chong, CEO, Consulus, argued that cannibalising one’s own brand can be seen as more of a preemptive strike against its competitors, “Companies have to be prepared in launching models to cannibalise their own rather than let others do it for them. Apple and Facebook are doing it, so this is the only way to thrive in a world of new ideas .”

Twyford also saw this as a viable business model stating that “brand cannibalisation can help if it is controlled, especially in categories where change is constant and innovation is a necessity. “

He said, “The example often used is the iPad, its introduction effected sales of Mac computers, but ultimately it grew a new market for the Apple brand and both products can sit next to each other harmoniously in the same portfolio.”

Moreover, saturating the market with the MyTeksi brand may not be a bad idea after all, as it could potentially help either of its brands pick up any sales in its targeted areas, ” Twyford added.

Could this be MyTeksi’s business objective?

According to a statement to A+M, MyTeksi said that both services were complimentary.

Twyford concurred with this possibility, citing an example of supermarkets that traditionally had large out of town stores opening smaller “express” outlets in city centres or in major transport hubs.

He said, “Such a move extended the brand reach so that apart from appealing to families for their big shop, they started to appeal to those who needed to grab food and go quickly. Express formats did not cannibalise the sales of their larger formats, instead they complemented each  other by tapping in to an unmet demand.”

Chong said that the key to surviving both brands relies on MyTeksi’s willingness and ability to improve in terms of differentiating its services.

“It has been a rather rushed approach to roll it out to grow market share. I believe after this, they will evaluate and evolve the two services further to clarify the propositions,” Chong said.

“It is similar to what Facebook is doing with its Messenger service and Whatsapp which is also owned by them. Nowadays companies are more prepared to let two similar models thrive and see which one survives,” Chong added.

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