Grab’s market share continues to grow in Malaysia, yet it still faces stiff competition for other ride-hailing apps.
In the following post, we’d like to summarize once more Grab’s profile, customer segments, and present a series of campaigns to not only maintain, but also increase their market share in Malaysia.
Business Background
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 headquarter in Singapore.
As of July 2016, there is 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 neighbouring Southeast Asian nations such as Singapore, Indonesia, Philippines, Vietnam and Thailand
Current Situation
Grab is currently in a heated battle with Uber for market share in Malaysia. The latest statistics of the how the market is divided came in July. At this time, Grab had 71% of the private ride-hailing market. The private ride-hailing market refers to individuals who drive their own cars, rather than drivers who own taxis. They also completely dominated the third party-party taxi market by owning 95%.
Uber understands this and has begun to aggressively pursue market expansion in the country. In November, Uber announced a $1 billion investment from SoftBank. The company plans to deploy a large portion of these funds in the region and in Malaysia.
Also, in Singapore, Uber just landed an investment from the largest Taxi operator in the country, ComfortDelGro. The deal is valued at $474 billion and gives Uber a fleet of 15,000 taxis. This is a direct attack on Grab’s market-leading position in the third-party taxi market.
As a result, Grab has to continue to be aggressive and refuse to relinquish its hold on the market because of Uber’s aggressiveness.
Key Issues & Challenges
As we know, Grab was founded in 2012. The first Taxi, on the other hand, was founded in 1897 and in the larger scheme of things, Grab and ride-hailing is relatively new. As a result, the biggest issues the company faces is growth and market share, especially with such a well-funded, global competitor in Uber.
Marketing Objectives
Through effective marketing the number one objective is to become the preferred ride-hailing app for all consumers in Malaysia.
To do so, proper segmentation and targeted campaigns for each group must be completed. This will be discussed further down in the post.
Communication Objectives
The communication objectives for the variety of marketing campaigns will be to interact with the desired segment in locations often visited and interact with them in creative ways that are personable, while not intrusive.
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Target Consumer
The three segments identified that will provide the most impact for Grab are:
- Tourists
- Business Travelers
- Young Professionals
Below is a table detailing the definition for each of these segments:
Tourists
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Business Travelers
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Young Professionals
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18 and older
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21 and older
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Age 21-35
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Behavior: Travels frequently
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College Educated (Including Grad School)
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College educated (including Grad School)
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-
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Frequent international travelers and/or traveled within the last two weeks
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-
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Target Consumer Strategies
Tourists
Airports are the central place for a majority of tourists, notably as the main entry point for many coming to Malaysia.
As a result, there are two specific strategies Grab should execute with the objective of introducing Grab to new customer, or more broadly, new entrants to Malaysia.
Strategy 1 - Partner with Telcos
Upon arrival, a large portion of tourists purchase a prepaid sim card. This allows them to use their smartphone in the country without having to buy a new phone. The stalls for sim card purchases are normally in arrival halls or around baggage claim. This process takes place within 10-20 minutes of a tourist being in the country. As a result, it is an incredible opportunity to introduce them to Grab.
The strategy is to work with a variety of leading telecom providers, such as Digi, Cellcom, and Maxis and provide “sponsored packaging” on each sim card that has a free first-time rider promo code.
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The promo code will be placed inside of the packaging and will be communicated in a way acknowledging their location in the airport and Grab’s excitement for them to become a customer.
Sample Insert:
KPIs for Strategy 1:
- Track amount of promo codes used
- Track retention of users, following their unique user ID tied to the SIM card
- Monitor volume of grab drivers in airport during campaign. Compare to historic volume to measure change
Strategy 2 - Partner with Airport Wi-Fis
74% of airports provide free Wi-Fi solutions for travelers. As a result, this is becoming something relied upon for travelers, especially when arriving in a new airport.
This is a prime opportunity to introduce Grab as new travelers can be exposed to Grab first, prior to other options via wi-fi connection.
Below is a mock-up of what it could look like:
When someone logs on to the Internet they will be redirected to a screen with a promotion code for a free ride and then an email will be sent. If they do not have the app, they are prompted to download. If they are a newcomer, but user Grab in Southeast Asia, they will still enjoy this benefit.
Section Sources: Travel and Leisure
KPIs for Strategy 2:
- Track amount of promo codes access via pop-up
- Track retention of users, following their unique user ID tied initial code provided
- Track by email address repeated users
- Monitor volume of grab drivers in airport during campaign. Compare to historic volume to measure change
Budget Proposal
Tourists
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Model
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Cost
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Partner with Telcos
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Partner with Airport wifi , Airlines
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First time user discounts
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Young Professionals
Young and medium income professional as are best targetted during peak hours, noting they are in highly concentrated areas within city centre (KL Golden Triangle). This includes morning rush hour, lunch time as well as end of workday.
Two different strategies are recommended for this customer segment. The intention is twofold: (1) provide perpetual rewards and rebates to frequent users to create customer stickiness; and (2) offer free ride upgrades at the discretion of grab based on the vehicle availability during the time of booking.
Strategy 1 - Rebates and Rewards for frequent users
Better promote Grab’s existing reward system through new marketing campaigns. Highlight the benefits of accumulating points, and more importantly, create more clout around the silver, gold, and platinum status.
Possible campaigns include:
- Highlight best rewards at each level:
- Silver: Movie Tickets, and other incentives at a similar price points.
- Gold: Free upgrade
- Platinum: Free Ride after accumulation of more than 4K points.
Budget Proposal
Young Professionals
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Campaign
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Cost
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Rebates and Rewards for frequent users
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Business Travelers
Business travelers value quality and time the most. This often translates into loyalty programs, and established work trip routines. With this in mind, the below strategies have been developed.
Strategy 1 - Allow Business Travelers to Use Grab Rewards to Purchase Hotel and Airline Reward Points
All business travelers are advocates of rewards program at different hotels and airlines. For example, Marriott Rewards has 54 million members and Starwood has 21 million. A fascinating statistic is 62% of frequent travelers used hotel loyalty programs.
After digesting the current offerings in the rewards section of the Grab App, an initiative catered to the business travelers should be develop. As such, rewards program points must be leveraged.
With this in mind, we proposed creating a marketing program working directly with hotel chains and airlines to promote that each Grab point can be exchanged for a point in the hotel’s rewards program, or vice-versa.
Business Travelers
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Campaign
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Cost
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Free upgrades to Grab XL
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Free upgrade, up to 30 RM for first 1K users;
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Free upgrades: 30K/Month
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Partner with reward points at hotels - basically, let them earn points by using Grab
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Merge loyalty system through hotel/airline partnerships, allowing frequent travelers to “cash-in” points
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Cost associated will vary, based on: hotel night rates, airline flight, and customer preference on how to use rewards. Same budget restrictions apply as for Young Professional reward system.
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Proposed Time Line
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