With over 12 years of finance and investment experience across the US and Asia, Ming Maa, President of Grab, joined the company from Softbank, one of Grab’s key strategic investors. Armed with the right experience and skills, the Massachusetts Institute of Technology (MIT) graduate played a key role in overseeing the Softbank’s Series D and F investment in Grab.
“It was a no-brainer. One of the things that really struck me was: when you think about the opportunities in Southeast Asia, there’s just a lot of elbow space. When you’re in China, (companies like) Didi come up against Meituan and a number of different companies and payments. There’s just great competitors, great companies in each and every segment in Internet technology within China, the US, India,” shared Ming.
“But when you look at Southeast Asia, (you) notice there were very little companies at scale operating in the region. And so I looked at the opportunity and thought, wow, this creates a whole bunch of white space, which something interesting can come out of.”
Despite the confidence that Ming had in the young company then, the region was highly diverse and competitive, with companies like GoJek and Uber fighting for a slice of the pie. Upping the stakes in 2016, Uber struck a deal with China’s leading ridesharing company, Didi, freeing up resources and money to wipe out their competitors in the market.
The path to success was uncertain. As time went on, each decision the company made for Grab became critical for its future.
How Grab Approached Expansion
The first six years of Grab’s journey was challenging. They were up against some of the world’s best companies from Silicon Valley with better technology, working at scale. The mature state of the industry meant the cards were often stacked against them.
One of the key decisions Grab made was to be hyper-local in every aspect of their business, and it was one that won them half the battle. While Uber launched a summer campaign to deliver ice cream to passengers, Grab did the same - but with their own twist.
“Durian is the king of fruits in Southeast Asia. It’s the fruit that everybody loves eating. Instead of doing ice cream, we delivered durian to our passengers in the region. That mindset, understanding local flavour, local preferences and doubling down on being hyper-local helped win customer mindshare, the customer’s love, and out-served our customers compared to international companies,” said Ming.
The effort that went into crafting a thoroughly localised user experience is evident - there is much attention to detail with the app’s inclusion of relevant local information like the latest news, current affairs and updates about road closures during large scale events.
Such a highly customised smart experience would be difficult for a foreign company to emulate, and gave Grab an edge over its competitors.
Finding A Balance Between Development and Scaling
Throughout Grab’s journey growing into a super app, the company was constantly torn between developing what they knew worked, or scaling the company - just as their internationally successful predecessors in ride-hailing apps have done.
A balance had to be struck between these to help them ensure that they didn’t bite off more than they could chew. At the same time, they also had to stay true to their value proposition: making life easier for users.
This led to the creation of services such as GrabPay. When Grab was first introduced, it was to solve a payment problem for ridesharing. While companies like Uber could introduce a seamless ridesharing process through credit card payments on the app, Southeast Asia posed a different problem. Many people in the region did not own credit cards, and found online payment processes too complicated.
“So the approach that Uber took, while it made sense for Uber as a global company, didn’t quite make sense in the context of Southeast Asia, because you immediately alienate or take away a very large population set that could not otherwise use your services without credit cards or banking,” explained Ming.
Instead, Grab decided to launch a prepaid system for its users. This key innovation allowed the company to solve the working capital issue that was associated with cash payments for ridesharing.
The next step was to scale; as it grew a loyal customer base, they never forgot the need to constantly develop. With a large user base, they could finally solve the cashless issue with a payment solution that became a feasible alternative to credit cards: GrabPay.
Becoming a Super App
While payment gateways already exist in more mature markets like the US, the fragmentation or lack of integration for these limits the user-base for apps. When companies enter the market, they are only able to serve an extremely small margin of customers who already have access to these services.
As a platform that enables an entire ecosystem or economy of digital services, a super app is not something that fits in all markets. They flourish best in regions like China and Southeast Asia, where the app serves to complement the countries’ developing digital infrastructure.
“So we realized was, well, hey, we’ve actually built all these services for our own business. So why don’t we provide all of these services as EPIs to other startups and other technology companies, and enable them to thrive on top of the infrastructure rails that we’ve built? That was really the genesis for thinking about the super app.”
Making a super app work is highly dependent on the consumer - it must serve the needs of the region, cater to the user base and address their needs. There will also be an ongoing need for product education required to drive new innovative services.
Fortunately, Southeast Asia is home to a predominantly very young, affluent middle-class population.
“You have a lot of folks in their 20s, in their 30s, who are mobile-first, mobile-native. And once they open an app, they start playing around and then they very quickly learn and get up the learning curve. So it’s a combination of both. But the key is to provide the services and then let the market decide what makes sense,” said Ming.
The Uber Deal
Nearing the end of the fight against Uber, the market environment at the time saw companies firing on all cylinders against each other. Uber was no different - they aggressively expanded their presence in multiple cities and launched a great product.
To compete against a company with such a track record of success, Grab had to ensure that they had a sustainable model which offered services that could remain consistent beyond the competition. One of the triggers that resulted in the acquisition was having the support of Chung Wei from Didi, and Softbank; the next logical step was to find a better way to service customers.
“One of the things that we always believe in is, it’s always better to partner with great companies. In fact, we always believe that it’s better to stand on the shoulders of giants than having to create things ourselves. And that has led us down the path of partnering with world-class companies like Bookings with Microsoft, with many others to provide specific services for our super app, whether it’s travel, whether it’s hotel bookings, and many, many more that will come.”
Once the acquisition of Uber was concluded, Grab ventured into food deliveries, its first non-transport offering. It allowed them to successfully tap into the expansive resources of their large transportation fleet and provide their drivers with new income sources. This also allowed them to maximise the efficiency of their network of transport drivers.
“If you really think about the dynamics of that marketplace, it’s a natural adjacency to go into. Why? Because we have a massive transportation fleet of, whether it’s four wheels, it’s two wheels, we have three-wheel tuk tuks in certain markets,” explained Ming. “I always joke if there’s a five-wheel vehicle out there, it’ll be on our platform. What we realized is, the more opportunities that you provide drivers with ways to earn income, the more efficient the overall network becomes, and then the lower the cost of deliveries for our consumers.”
The Future
Grab’s journey is an object lesson in flexibility and adaptive innovation, at times process-driven, and others, focusing on agility and speed to market. However, what their future holds will depend on the next steps the company makes, and the paths these decisions open up for Grab.
At its core, the company has displayed a deep understanding for the advantages of agility to help stand out in the market. With Grab, growing a super app and constantly evolving, it’s not about getting it right or wrong. It’s about staying true to understanding what their consumers need, and finding a way to deliver a solution to these needs.
The key is to remain humble, hyper-local and close to your customers. To spend as much time as possible with our drivers, our passengers, our merchants, our restaurants - and understanding exactly what their problems are. Don’t dismiss the problems, and really understand what is behind that, and solve it.
— Ming Maa, President, Grab Holdings Inc.
