What global brands can learn from Didi, Go-Jek and Grab
As the hit song from the 1946 Broadway musical Annie Get Your Gun goes, “Anything you can do I can do it better / I can do anything better than you”. Seventy years on, domestic tech companies could well be singing those lines to global brands.
Over the past decade, apps created on America’s west coast such as Google, Facebook and Airbnb have boomed and proliferated around the world. Yet app developers in Asia have sent some clouds across the Californian sun.
Joining a long list of foreign tech firms that have fallen short in their ambition to flourish in China, Uber recently sold off its China operations to Didi Chuxing after a lengthy battle with the domestic rival. But the news isn’t all bad – Uber retains a 20 per cent stake in Didi, now valued at US$35 billion.
A negotiated exit from China now seems like the best global tech brands can hope for, challenging the notion that a one-size-fits-all approach will succeed in a market that’s as distinct and diverse as China, let alone Asia.
It's easy to dismiss Didi's achievements as inevitable in an unfair market, but a recent article in The Economist argues against it. While there certainly are political perks of being a homegrown company in China, Didi’s success lies not only in forging local relationships (something Uber also did well), but in providing localised solutions to address Chinese users’ unique pain points.
For instance, Didi Bus, an on-demand shuttle bus service, was introduced to improve the commuting experience of white-collar workers. The service commenced in Beijing and Shenzhen, where Didi Bus offered an attractive alternative to the overcrowded public buses and trains for less than the cost of taking a taxi. Users can customise travel times and routes based on their individual preferences, and unwind in a direct shuttle between work and home that comes Wi-Fi-equipped. Moreover, to complement China’s ongoing urbanisation, the service was also rolled out on messaging app WeChat during its initial phase.
Indonesia’s domestic equivalent of Uber and Didi is Go-Jek, a pioneering motorcycle taxi app. The service recently partnered with Indonesia’s biggest taxi operator, Blue Bird, consolidating the market dominance of their technology, payments and promotions.
Following in Go-Jek’s footsteps is GrabBike, a motorbike service run by Malaysian app Grab, which has seen a 300 per cent increase in Indonesia since the start of 2016. While it’s not a domestic service, Grab is familiar with the broader Southeast Asian context. Its ethos is driven by a desire to serve the needs of the masses, with a constant emphasis on its broad selection of services to stay accessible to varying income levels and commuting needs.
In expanding globally, brands have to acknowledge the vastly different political, economic and cultural conditions. Last December, Didi formed a global strategic partnership with Ola (India), Grab (SEA) and Lyft (USA), where “each country will handle mapping, routing, and payments through a secure API,” according to the announcement. If there was still any doubt about Didi’s global ambitions, it poured a further US$600 million investment into Grab just two days after the momentous deal with Uber.
For such a highly heterogeneous continent, working with local brands and tailoring business strategies to fit Asia’s multitudinous different cultural environments is a strong approach, helping to build relationships with locals and national agencies, and avoid the public backlash that appears almost unavoidable for global brands.
- Article by Andrew Ang