Company Description
Grab is an automated smartphone based booking and dispatch platform. It matches passengers with drivers for transport by taxis, cars, and bikes (varies by market).
Malaysian based, Grab was founded in 2012 by Anthony Tan and Tan Hooi Ling and serves as an alternate mode of transportation. Grab is currently headquartered in Singapore.
As of July 2016, there are over 350,000 drivers registered under Grab network across Southeast Asia, with more than 19 million mobile downloads.
Grab is a technology company that offers wide range of ride-hailing and logistics services through its app in Malaysia and neighboring Southeast Asian nations such as Singapore, Indonesia, Philippines, Vietnam, and Thailand
Section Sources: Grab Taxi, Digital News Asia
Hypotheses of Customer Path
When assessing Grab’s customer path several main assumptions are made. Most importantly, is identifying two primary customers: (1) Riders: those we interact with the app to secure a ride; and (2) Drivers: those who interact with the app to secure riders, receiving a different level of support from the company.
Riders
Hypothesis 1: Grab generates awareness and consideration through the network effect, offering ride discounts to new users and referees.
The network effect allows new consumers to experience Grab without even downloading the app. This at once creates awareness of a service, and consideration for future use.
Hypothesis 2: Grab generates preference and purchase, through constant promotions to “hook” consumers, creating the habit to seek out the service.
Rider downloads the Grab app. Grab uses many marketing techniques to accomplish this: billboards, social media, guerilla tactics, grassroots campaigns and probably most effectively, word-of-mouth.
Once the user has downloaded the app, Grab entices a rider through promotional campaigns, providing codes inside the “notifications” section. These promotional codes are often related to special events going on in the specific city. For example, during the SEA games Grab offered a promotion that provided RM6 off 20 rides during seven days of the games.
In further assessing the hypothesis, Grab offers promotions to the point where a rider appears to be “hooked.” Once this happens (based on an internal, proprietary company calculation on the definition of “hooked”) they offer fewer promotions to that individual smartphone user because they do not feel a promotional code is needed to trigger their use of the app. If, however, a user’s engagement decreases, the rate of promotional campaigns available increase.
Ultimately, Grab creates a cyclical customer path, for it builds and reinforces user habits, both as an individual’s first go-to ride hailing app, and repeat purchasing behavior. It’s important for Grab to continue to ensure their customers are using the app and in cases when they are not, they have strategies to incentivize increased usage.
Drivers
In order to be a successful service provider, Grab needs to match rider demand with driver supply. This being the supply-side of Grab’s business model, it is a crucial aspect that will determine the long term success of Grab.
Hypothesis 1: Grab generates awareness and consideration by leveraging existing riders, and providing distinct services and benefits through the same app.
Through the app, a user sees the option “Drive with Grab”. This is an avenue for riders of Grab to be aware that they can also become drivers. By clicking on the link, the user is redirected to a page asking for basic information.
Hypothesis 2: Grab generates preference and purchase by creating and promoting clear incentives to become drivers.
As noted below, Grab constantly evolves their driver incentives. The following example is for June 2017.
Part of Grab’s strategy is to create the necessary incentives that make the monetary reward large enough to continue being a driver. This continuity matters for the rider experience, and therefore Grab has to encourage long-term drivers.
To encourage said continuity, and the growth of the driver network, additional incentives are rolled out. The chart below further illustrates how potentially lucrative it is to refer a driver. This both gets new drivers on the roads, but keeps existing ones by offering an additional source of income. Below is a chart from April 2016 outlining such an incentive scheme.
A final technique to note is the “surge-pricing” scheme Grab employs throughout different parts of cities and times. This focuses on the “purchase” aspect of the buying path by creating even greater incentive during key times/areas. This is a clear strategy to get drivers back on the app when they initially were not compelled to drive.
Brand
Originally established as MyTeksi (where MY refers to the country of origin), Grab changed to GrabTaxi in October 2013.
The name change came as Grab expanded overseas operations, moving its international headquarters in Singapore.
In May 2014, the company went through another name change to GrabCar.
Finally, in 2016, the company launched its latest re-branding campaign with the introduction of a new logo and a new version of its flagship app. The company switched its name from GrabTaxi to just Grab in the effort to bring all its services across Southeast Asia under one umbrella brand.
Anthony Tan, the Founder of Grab, said “it was really making sure that one brand covers all the different services...it’s not just a logo, not just a brand, but an identity to reinforce [us] as a leader in the region.”
Section Sources: Digital News Asia
Chronological Logo Changes
2012
2013
2014
2016
Customer Value Proposition
To enable every single person in Southeast Asia to travel safely, comfortably, and easily to work, to college, and to tea with a few friends by providing a safe and easily accessible transportation platform and to bring people together to make life better for all.
Grab’s Malaysia Total Addressable Market (TAM)
TAM for riders: 13.47M
- Assumption #1: Grab is utilized exclusively in urban areas
- Taking the percent of the total level of urbanization.
- Assumption #2: Those who own/use smartphones have access to the Grab app.
- In taking the percent of urban dwellers who are connected to the internet and further segmenting this figure to those who access the internet via mobile phones, we determine the TAM for riders.
The graph below details the exact figures used:
TAM for drivers: 3.6M
- Assumption #1: Use grab’s requirements for suitable cars to determine potential supply.
- Grab requires no inspection for cars manufactured 2011 onwards.
- Assumption #2: Use car sales from 2011-2017 YTD to describe TAM for all potential cars
- Admittedly, though there are potentially fewer drivers than cars, this helps determine the total potential the market allows based on Grab’s standard.
Comments
Post a Comment