Grab awaits legal progress amid domination

Country head upbeat about political scene

Mr Tarin says the number of Grab drivers in Thailand has doubled in the past 12 months.

Ride-sharing service Grab plans to expand to key areas in Thailand in 2019, most notably Chiang Rai, hoping to achieve nationwide service in the next 2-3 years, a goal that could be expedited by the upcoming election.

The company expects the election to produce favourable results, said Tarin Thaniyavarn, Grab's Thailand country head, as major political party representatives have made positive statements about Grab and the sharing economy at large.

Although Grab does not release specific numbers regarding their five years of operation in Thailand, Mr Tarin said the number of drivers has doubled in the past 12 months. The company also expanded to food deliveries in December 2017 and in the first 10 months of operation made 3 million deliveries from 15,000 merchants. At least 15% of Grab's business in Thailand comes from tourists.

"Thai customers are the most sophisticated customers in Southeast Asia, period," Mr Tarin said. "Just by the level of engagement on social media, and Bangkok is almost the No.1 city in the world in terms of using Facebook. Thais want to embrace this concept more than anyone."

EVERYONE'S A WINNER

The main political issue Grab wants resolved by government, and what is hampering expansion efforts, is legalisation. Though Grab operates in 16 provinces and 19 cities in Thailand, paying for a ride from an unlicensed driver is still technically illegal, and some Grab drivers have faced fines by police. In every other Southeast Asian country Grab operates in, ride-sharing services are legal.

The legalisation issue has made expanding throughout Thailand difficult. Mr Tarin said that if the legalisation question were resolved, Grab could make its services available in as little as six months.

Grab still has an idiosyncratic relationship with the government. Despite not being technically legal in all aspects of operation, Grab works "extremely closely with the Thailand Tourism Authority" and the Transport and Labour ministries, Mr Tarin said.

Grab has received positive signals from many political parties participating in the coming election. Recently the Bhumjaithai Party posted a video to social media of its leaders sitting in a Grab car and interviewing Grab drivers.

At the recent Go Thailand 2019 dinner hosted by Thansettakij newspaper, the deputy leader of the Pheu Thai Party, the commerce minister and the deputy leader of the Democrat Party all made favourable statements about Grab and the sharing economy, Mr Tarin said.

"This was the first time there was consensus across three big parties in Thailand -- that the benefits from the sharing economy are massive for the country and the people," he said. "They said there must be a change in how we move on this."

Mr Tarin expects the momentum towards legalisation to be in Grab's favour no matter who wins the next election.

HANDS-ON EXPANSION

At the core of Grab's expansion efforts is a hands-on approach to new areas, finding local partners and building community support for Grab services. Incumbent taxi cartels and local governments can act as hurdles to growth, so Grab must dedicate a team of employees when moving into a new area.

The company wants to focus on moving into heavily trafficked tourist areas where local taxis do not meet the demand of fluctuating tourist numbers. Grab also plans to promote development in secondary destinations in conjunction with the Thailand Tourism Authority.

"There will be many tourism cities in Thailand that could explode from Grab's presence, and a lot of people in the cities who will start making money," Mr Tarin said.

A notable example of Grab's hands-on expansion strategy was Buri Ram ahead of last year's MotoGP in October. The city had an influx of about 200,000 people for the event, with only 15 local taxis operating in the area. Grab organised operations in Buri Ram ahead of the event and was able to recruit about 200 drivers to serve the event, giving rides to 15,000 people.

"Our strategy is to spend time in a specific province, find a local partner who can help us grow the market in the long term, be more entrenched in the community and then things will be a lot more engaged and long lasting," Mr Tarin said. "Buri Ram was a great example for all of this."

Grab wants to focus on expanding into Chiang Rai, where the company has a tiny operation.

"[In 2018] there were a lot of events in Chiang Rai, and lots of tourist attractions in the city," Mr Tarin said. "This is definitely the main city we want to focus on going forward."

WAR OF THE SUPERAPPS

Chinese messenger app WeChat's "superapp" strategy has seen unmitigated success that other app companies are striving to emulate.

In China, people use WeChat all day, every day -- not just for messaging, but for payments, social media and e-commerce. The app's takeover of everyday life in China has inspired other companies in Asia to attempt to broaden the scope of their own apps.

Grab certainly has superapp ambitions, adding a number of services last year, including an e-payment wallet in partnership with Kasikornbank, a grocery delivery service and an additional service that picks up items from 7-Eleven and FamilyMart, "so you never have to leave your house".

Unlike some superapps like Facebook Messenger and WeChat, Grab doesn't want an open platform to allow third parties to publish apps on its platform, but will instead have full control of services that will be available on the Grab app. Services are often added either by Grab independently or through curated partnerships, like with GrabFresh, a partnership with an existing grocery delivery app, HappyFresh, that built the service into the Grab app.

The Japanese messaging app Line has become hugely popular in Thailand for communications and social media, but it has begun to branch out into TV programmes, games and even ride-sharing and food delivery. Both Line and Grab are vying to dominate as the WeChat of Thailand.

In December, Indonesian ride-sharing company Go-Jek launched its own taxi and food delivery service in Thailand called Get. Go-Jek provides a number of other services in Indonesia that are likely to be offered on their Thai app.

As this year gets going, Grab has an enormous share of the ride-sharing market in Thailand -- the exact figure is unknown -- and will start to face increased competition, not just in ride sharing, but in its quest to be a holistic superapp.

"I think the sheer supply of drivers we have is our main advantage over other platforms," Mr Tarin said. "It's not easy to build the supply in 1-2 months, but we've been building up over five years and it's the biggest number by far compared with any Thai transport company."

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