SUPER-APP BATTLE: GR AB VS. GO-JEK
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FORTUNE.COM // APR.1.19
THAT ’S THE IDEA BEHIND ICE CREAM DAY, a promotion
launched by Uber Technologies in 2012. The ride-
share giant courts customers by allowing them, for one
day each summer, to arrange instant dessert delivery
through the Uber app. But in June 2015, as the Ameri-
can powerhouse expanded that campaign across 53
countries, Malaysian entrepreneur Anthony Tan saw a
chance to cast Uber as an outsider—and burnish the
appeal of his homegrown ride-hailing venture, Grab.
Just after Uber’s event, Grab offered what Malay-
sians really scream for: smelly durians. Customers in
Kuala Lumpur, the capital, could have one of the pun-
gent fruits rushed to their doorstep by a Grab driver.
To deliver on that promise, Grab had to devise special
packaging: Durians, though considered a great delicacy,
emit an odor so overpowering that they are banned
in many airports and hotels. Grab surmounted that
obstacle and offered the fruits at the bargain price of a
single ringgit (24¢). They sold out almost immediately,
and the “GrabDurian” marketing coup is now well into
its fourth year.
“No foreigner would have thought to do that,” chor-
tles Tan. Uber, he says, “couldn’t fully appreciate how
local you needed to go” to win in Southeast Asia.
Grab has employed hyperlocal strategies with
remarkable success. Since its 2012 launch from a
warehouse closet in a gritty Kuala Lumpur suburb,
the venture has expanded to eight countries. It boasts
2.8 million drivers—more than the 2 million claimed
by Uber. Grab says its app has been downloaded to
139 million devices and that it processes more than
6 million ride orders a day. Grab’s 2018 revenue topped
$1 billion, and it expects to double that figure this year.
Along the way, it outlasted its ice-cream-peddling rival:
In March 2018, Uber announced that it would sell its
Southeast Asian operations to Grab in exchange for a
27.5% stake in the company and a seat on its board.
Tan, 37, and cofounder Hooi Ling Tan (a 35-year-old fellow Malaysian to whom Anthony is not related)
have aspirations stretching far beyond the taxi business.
They aim to transform Grab into an “everyday super-
app” that engages consumers on multiple fronts—of-
fering food delivery, digital payments, financial services,
and even health care along with rides. Most of the
region’s 650 million consumers are only now getting
access to conveniences long taken for granted in China
and the West; Grab hopes to be the app that connects
them to whatever goods and services they demand.
With a 2017 GDP of $2.8 trillion, Southeast Asia,
were it a single country, would be the world’s seventh
largest economy; at its current growth rate, it would
rank No. 4 by 2030. But for investors, market size is
only part of the appeal. Super-apps promise a new
mode of connecting with customers and an opportu-
nity to amass a vast data trove about their preferences
and purchasing behavior. It’s a model pioneered in
China by Alibaba’s Alipay and Tencent’s WeChat; Mark
Zuckerberg, in a recent blog post, hinted that he hopes
Facebook can emulate it. Many believe revenue from
super-app services and the data they generate will
prove to be more stable, more profitable, and easier to
scale than revenues from ride-hailing—where profits
have been elusive even as growth skyrockets.
In Southeast Asia, the super-app model is evolving
more rapidly than anywhere else in the world. That
helps explain why Grab has raised $8.6 billion in ven-
ture funding from powerful players including Japan’s
SoftBank Group and Toyota Motor, Chinese ride-
hailing giant Didi Chuxing, and Microsoft. Grab’s most
recent funding round values it at more than $14 billion,
making Grab Southeast Asia’s most valuable unicorn.
Grab prevailed over Uber, Anthony argues, because
it adapted to local consumers’ needs. In a relatively
low-income region, Grab provided a platform for cheap
taxis and motorcycles to counter Uber’s expensive
“black cars.” And while Uber required payment by credit
card, Grab created a network of intermediaries to help
“unbanked” customers pay cash. (Plus, those durians!)
But in Grab’s latest battle, it doesn’t hold home-
court advantage. Grab has moved its headquarters
to Singapore, but Anthony Tan has recently been
spending more than 70% of his time in Indonesia.
Many analysts believe that winning there is crucial to
establishing regional digital hegemony. Indonesia ac-
counts for 40% of Southeast Asia’s GDP, and it boasts
unusually tech-savvy consumers: 74% of Indonesians
with mobile Internet access make e-commerce pur-
chases, the highest figure in the world, according to
social media management platform HootSuite.
Here’s the rub: Across the archipelago, Grab’s driv-
ers must vie for passengers with rivals from Go-Jek, an
Indonesian venture whose backers include Google and
Tencent. Go-Jek employs more than a million drivers
and processes more than 100 million transactions for
25 million monthly users. Go-Jek is also a super-app:
The venture’s 18 on-demand services include Go-Mart
(grocery shopping), Go-Clean (housecleaning), Go-
Glam (hairstyling and makeovers), and Go- Massage
(self-explanatory). Go-Jek claims 108 million appwe all
scream forice cream.