Grab, the Only 'Decacorn' in Southeast Asia After Swallowing Uber [Hidden Business Story]

Car-sharing Service 'Grab' Started in Malaysia
Grows into Southeast Asia's First 'Decacorn Company'
Swallows Global Giant Uber with 'Localized Strategy'
Challenges Beyond Mobility as a 'Lifestyle Platform'

The logo of 'Grab,' which has grown from a car-sharing service to a comprehensive economic platform. / Photo by Yonhap News

[Asia Economy Reporter Kang Juhee] If the United States has 'Uber,' Southeast Asia has 'Grab.' Grab has ousted Uber, the world's number one ride-sharing company, and grown into a comprehensive platform providing services such as ride-sharing, food delivery, parcel delivery, and digital payments in over 400 cities across eight Southeast Asian countries.

Starting in 2012 in Malaysia with an initial capital of $25,000, Grab is now valued as a 'decacorn' at $39.6 billion (approximately 45 trillion KRW). How did Grab manage to become the top company in Southeast Asia amid fierce platform competition?

◆ Born from the challenge of solving congested traffic and overcharging

Grab was founded by Anthony Tan, a Malaysian attending Harvard Business School, and his classmate Hooi Ling Tan. At that time, Malaysia faced severe traffic congestion due to poor road infrastructure and lacked a well-developed public transportation system. It was not only difficult to hail a taxi, but overcharging was also rampant. To address these transportation issues, Anthony and Hooi Ling started a business in 2012 by developing a taxi-hailing app called 'MyTeksi.'

However, persuading taxi drivers was not easy. The concept of call taxis was unfamiliar in Malaysia, and taxi drivers were unfamiliar with digital devices or apps. Even smartphone ownership was low. Initially, only about 40 taxi drivers signed up for MyTeksi.

Anthony and Hooi Ling personally went to the field to encourage taxi drivers to join. They visited taxi companies one by one, convincing drivers that using the app would save time finding passengers and increase their income. They also negotiated with smartphone manufacturers and telecom companies to subsidize smartphone purchase costs for taxi drivers.

Grab car-sharing service vehicle./Photo by Yonhap News

As taxi drivers experienced the convenience and profitability of the app, word of mouth about Grab began to spread. In 2013, the company rebranded as 'GrabTaxi' and expanded its services to eight Southeast Asian countries including the Philippines, Thailand, Singapore, Vietnam, and Indonesia. Grab received great responses from neighboring countries facing similar traffic problems as Malaysia.

Within two years of its founding, Grab's user base grew to 30,000, and by 2016, it surpassed 200,000 users. Currently, Grab has grown into a giant company with over 45 million daily users and more than 100 million registered users.

◆ The secret to beating global giant Uber: 'Localized services'

Uber, the world's largest ride-sharing company from the United States, entered the Southeast Asian market in 2013. Competition between Grab and Uber, offering similar services, was inevitable. Uber, with its strong capital and experience in various markets, was a formidable threat to the newly launched Grab.

However, the result was a victory for Grab. After five years of competition, Grab acquired Uber's Southeast Asian business in 2018. Grab's winning strategy was to implement localization tailored to the unique transportation characteristics of Southeast Asia. It enabled cash payments to accommodate the low credit card penetration rate and provided 'customized services' suited to each country's circumstances.

For example, in Vietnam, Indonesia, and Thailand, where motorcycles are a primary mode of transport, Grab launched 'GrabBike.' In the Philippines and Cambodia, where tricycles are widely used, it introduced 'GrabTrike' and 'GrabTukTuk.' To meet diverse demands, it also launched 'GrabCar,' which mediates private vehicles, and 'GrabHitch,' a carpool service for commuters.

The differentiated ride-hailing services helped alleviate severe traffic congestion in city centers across countries, making Grab an indispensable 'must-have app' for Southeast Asian citizens.

Anthony Tan, Co-founder and CEO of Grab. Photo by Yonhap News Agency

◆ Leap beyond ride-hailing to become Southeast Asia's 'all-in-one platform'

Grab is currently expanding its business into various fields such as food delivery service 'GrabFood,' logistics delivery service 'GrabExpress,' and mobile payment system 'GrabPay,' evolving into an 'all-in-one platform.' In an interview, Anthony expressed his ambition to transform Grab into a lifestyle platform beyond mobility services. The company's raison d'?tre is to provide convenient lives to Southeast Asian citizens through digital innovation and to create higher social value. Introducing a payment system, fundamental to all services, is part of this goal.

Grab is focusing on popularizing mobile payments in Southeast Asia, where cash usage remains strong, to enable more people to conveniently access the useful services Grab offers. Among numerous ride-sharing platforms, Grab's rapid growth is attributed to creating a new business model that revolutionized consumers' lives.

Having dominated the ride-sharing service and mobile payment markets, Grab's future growth prospects are limitless. Recognized for its business performance and growth potential, Grab has received investments worth billions of won from numerous companies including Naver, Hyundai Motor Group, SK Group, Toyota, Oppenheimer Fund, Booking Holdings, and Microsoft. As of 2019, Grab's cumulative global investment reached 10.2 trillion KRW.