| April 09, 2018
I have been working on a presentation about what regular brands can learn from the disruptors like Amazon, Airbnb and Uber. In the case of Uber one lesson might be that being the first mover in one country does not help when you go up against the incumbent in another.
If you look at Uber in the U.S. it stands out as the dominant brand: meaningful, different and salient. But that does not mean that its one size fits all business model translates to other cultures without the wheels coming off. Uber has retrenched from China, Russia and now South East Asia. Uber has agreed to sell its South East Asia ride-share and food delivery businesses to local brand Grab.
Tempting as it is to assert that the failure is all down to differences in culture it is not. Most people have more than one app on their phone and when there is little difference between the services the game is all about how fast you can grow availability and salience. And as we have seen in other similar categories, if you are not number one player then acquisition of a smaller brand is a good way to play catch up. So it makes sense for Grab to acquire the number three brand in the region.
If we look at Indonesia, the largest country by population in South East Asia, in 2017 according to BrandZ Uber lagged both leader Go Jek and Grab by a significant degree. Go Jek launched in 2010 with the slogan, “Karya Anak Bangsa” (Made by Indonesians) and by 2017 was known to every Indonesian interviewed about their use of taxi services, but Grab had gained significant ground between 2016 and 2017, with awareness growing from 54 percent in 2015 to 84 percent and usage climbing fast. And our data suggests that of the two brands Grab has the strongest growth potential from a consumer perspective.
Uber lagged behind the two local brands. Although it too had grown awareness, usage of the app lagged the other two brands. In part this might be because only one in four Indonesians claim to have more than two ride-hailing apps on their phone. And that being the case, being number three in the market is just not good enough. Still, better to have tried and failed, Uber will take a 27.5 percent stake in Grab and that brand has plans to fuel further growth with bicycle-sharing and on-demand shuttle services planned in addition to the usual motorcycles.
My suspicion is that the three are brands seen as interchangeable by most Indonesian consumers. In the absence of any real differentiation – functional, emotional or cost – the main thing people want is to quickly, easily and safely get from A to B and simply choose the service that will fulfill that need quickest. Success is largely down to building mental and physical availability as quickly as possible.
This said, once you allow for the difference in size between brands, Grab does seem to have some attitudinal advantages over Go Jek. In 2017 Grab was seen to be more meaningful and scored relatively higher on desirable, kind and trustworthy, and as abrand people are very likely to recommend. It will be fascinating to see how this all plays out and what this year’s BrandZ Top Most Valuable Brands ranking has to tell us.
So what do you think? Is my assessment correct or, if you live in the region, is there a different perspective to offer? Please share your thoughts.