Asian cab firm Grabs a piece of the action by combining rides with financial inclusion
Grab is one of Uber’s main rivals and is now on a major drive to expand across Asia, competing with Uber in a race to serve the underbanked.
Grab has made the bold move to team up with mobile wallet service Wave Money in Myanmar to launch GrabPay. Riders will earn points per ride and be able to cash them in for a newly expanded network of “top tier merchants across South East Asia”- from airlines to eateries and entertainment venues.
Predominantly a cash-based market, it could be seen as a risky strategy; however, take-up is likely to emulate a leapfrog pattern in Myanmar, where appetite for digital services couldn’t be higher. And this is precisely what Grab is gunning for.
Myanmar is a fascinating market, not least because of the astronomical growth in mobile and internet usage in the country in the time since the end of military rule. Government figures as of H2 2016 stated the number of SIM cards in the country had increased in the space of two years by 400% and the internet-using population had increased by 94.9% in the same time scale.
Consider this alongside World Bank figures stating that in Myanmar, less than a quarter of the population aged over 15 have a bank account and the exponential curve from unbanked to saturation begins to draw itself.
CEO of Myanmar’s Yoma Bank, Hal Bosher, told Electronic Payments International’s group editor Douglas Blakey, in November 2016 that the banked population of Myanmar could feasibly treble in the next ten years, from 10% to 30%. The current population is 50 million. Grab is in for one hell of a ride if it can pick up new customers and keep them happy.
Wave money is a mobile payments provider with more than 9,000 outlets across Myanmar. A partnership between Telenor, First Myanmar Investment (FMI) and YOMA Bank, it is mainly used for P2P transfers, often domestic migrant workers sending money home, and was the first venture of its kind to be given the green light by the central bank in Myanmar.
According to Grab, 620 million people in Southeast Asia use the service and it also hosts a P2P platform, Grab Pay.
Grab operates in Singapore, Indonesia, Philippines, Malaysia, Thailand, Vietnam and Myanmar and tots up around 2.5 million rides daily. It has the largest driver base in the region with more than 930,000 drivers across 55 cities. There have been more than 45 million downloads of the Grab app since launch in January 2012 in Singapore by Anthony Tan.
Head of GrabPay, Jason Thompson, said, “With our new expanded GrabRewards programme, we’ve created an ecosystem in which our customers stay loyal because a dollar spent with Grab is more valuable than a dollar spent elsewhere.”
He added that during the soft launch, a number of GrabPay’s merchant partners hot their redemption targets four times over.
“With as little as a week’s worth of rides to and from work, our loyal GrabPay users will be able to get valuable benefits like movie tickets and free meals,” Thompson continued.
Wave Money knows that a strong distribution network is crucial to the success of bulking up subscriber numbers, and spreads its shops wisely, putting its agents to work to enlighten locals about its offerings. And with Grab’s experience in Singapore and other Asian markets, the pairing seems bound for success and may even outdo Uber, which jumped on the bandwagon in Myanmar immediately afterwards, announcing an imminent launch in the region.
Next on the map is likely Indonesia, where Grab Money already has a network of 500,000 agents “helping” the unbanked and underbanked access GrabPay’s platform. It will have to fend off competition from local ride-hailing app Go-Jek. And Uber for that matter. But if I were them, I wouldn’t rest on my laurels.