Starting with ride-hailing, the two companies now aim to monopolize the digital market by expanding their services
Restrictive measures imposed to counter the consequences of the Covid-19 pandemic are fostering the potential of the digital economy at the global level in all areas of consumption. In South-East Asia, this dynamic is further reinforced by the remarkable increase of digital consumers in recent years, achieved through a more widespread access to the internet across the different countries of the region. Today, big local companies are fully aware of this evolution and are actively investing in the digital market, which is expected to be worth around $200 billion over the next five years.
Particularly interesting are the cases of Grab and Gojek, tech start-up leaders of the ride-hailing sector. Born in 2010 in Jakarta offering support services for motorcyclists, Gojek has then expanded its range of services reaching to date a value of $12.5 billion. Grab, founded in Malaysia in June 2012, has grown rapidly throughout South-East Asia, with a current valuation of nearly $14 billion. Both started out in the mobility sector, but then they gradually expanded their service network from car-sharing and home delivery to financial and insurance services. The goal of both companies is to become the first everyday super app by developing an ecosystem of entrepreneurs, drivers and customers connected through the app, in order to meet all the needs of everyday life.
In particular, Grab is developing digital cash-less payment tools such as GrabPay, which allows to make payments using internal credits of the app. In addition the company also offers services such as GrabFood and GrabFresh, that allow to order groceries online. Grab has also begun working with governments and small businesses locally to digitize traditionally offline segments of the agri-food ecosystem, bringing them on its platform. The company recently launched GrabMart, GrabFood, GrabExpress and GrabAssistant, establishing relationships with over 78,000 retailers and 115,000 drivers and riders in March and April 2020. In the last twelve months, Grab has achieved a 21% increase in online revenue and contributed approximately $8.5 billion to the ASEAN economy.
Also GoJek is expanding its business into several consumer sectors, leveraging the exponential growth of the digital sector. GoFood, GoClean, GoAuto, GoLaudry and GoGlam are just some of the services launched in recent years, from food delivery to laundry services. In addition, the company is heavily investing to offer training courses in business management, finance and information technology to over 35,000 entrepreneurs with the aim of supporting the digital transformation also within civil society.
Both companies therefore represent concrete examples of one of the most significant trends that is characterizing the South-East Asian market. With a young and dynamic population, the region is expected to observe a considerable increase in demand for digital services, creating space for the proactivity of innovative tech companies able to ride the wave of digitalization.
Article written by Tullio Ambrosone e Gabriel Zurlo Sconosciuto