IT companies from Southeast Asia with unusual services and features
When we hear the phrase “Big Tech”, the logos of Amazon, Google and other Netflix and Spotify pop up in our heads. However, in the countries of Southeast Asia there are successful tech players with hundreds of millions of users and a whole scattering of unusual services and product solutions. Today I will tell you about them.
In this series of articles, I look at the coolest and most powerful technology companies outside of the so-called “golden billion”. And I’m not touching China either – this is a separate big story, it deserves its own cycle (perhaps I’ll write later). In the first part, I examined the IT leaders of Japan and South Korea, and today we will talk about Southeast Asia – Indonesia, Thailand, Malaysia, Singapore, Vietnam, and so on.
So, let's begin:
Scooters for everything or Indonesia's first unicorn
If you've ever flown to bask in the Thai, Vietnamese or, say, Balinese sun, you've probably noticed how much scooters are loved in Southeast Asia. Personally, one of the most vivid impressions of my trip to Phuket is how locals carry a family with a child, a cage with a chicken, and also a huge surfboard on a moped. And they're fine.
It is logical that with such popularity of scooters in this region, corresponding transportation has also developed. If we take Indonesia, for example, then for many years everyone there has been riding a motorcycle taxi, which the locals call “ojek”.
So, 15 years ago, one Indonesian entrepreneur thought, “Taxis are being uberized all over the world, but why are our native ojeks worse?” This is how a startup was born Gojek. Now it’s a huge ride tech and ecosystem, but it all started with bringing order to the chaos of scooters.
The ojek business was like a bazaar on wheels. BOOdzheks spent most of their time searching for passengers, and customers were getting really upset that finding a free scooter took longer than the journey itself. So, the idea turned out to be very relevant.
Initially, Gojek was just a call center that distributed orders. However, in 2014-2015, Uber and some regional players began to creep into the Indonesian market (we’ll talk about one of them separately below), so Gojek received the first attention of investors. At that moment, the realization came that the call center model was becoming obsolete. We needed an aggregator in the application, which we decided to build with the first investments raised.
In the first year, the application received as many as 30 million downloads. In general, the Indonesian market was so huge and tasty that Gojek received a valuation of $1.5 billion (i.e., became a unicorn) as part of its first investment round in 2014. However, the company's journey was just beginning.
Gojek began to grow rapidly. Every year the fleet of scooters and the number of orders served increased. At the same time, the company changed its positioning – from “Uber for Jacks” the company moved to a “digital service for all occasions” model. Almost immediately after its founding, Gojek launched a food and parcel delivery service – which is logical, given how convenient and quickly it is possible to deliver oversized items on scooters. In 2016, Gojek already had a huge fleet of scooters (is that what they say?), so it was logical to launch their short-term rental service – let's call it “scooter sharing”. Later they added full-fledged carsharing, and then a car taxi aggregator.
Then the company went all out. Gojek has digitized literally all segments and niches that it could reach with its digital Indonesian paw:
Delivery of ready-made food GoFood, delivery of non-food goods GoShop and GoMart. Medicines are delivered by GoMed. Courier delivery via GoSend and GoBox. Cleaning aggregator GoClean. Library of entertainment content with smart selection through Gotix, GoPlay, GoGames. Sign up for all kinds of massages and beauty treatments through GoMassage…
Of course, the whole thing was spiced up with its own payment service GoPay (launched in 2020). He can transfer money, generate and scan payment QR codes and pay utility bills, fines and other bills. Later, installment plans, loans, insurance, and an investment platform were added to it, forming a comprehensive offer in fintech.
Gojek also has absolutely amazing services that I have not seen even from the most sophisticated Asian superapps – for example, the company has an aggregator of pet care services, and during the pandemic the company rented out medical masks (I hope this rental was not reusable) .
In 2018, an important merger took place – Gojek bought the large Indonesian e-commerce platform Tokopedia (another Indonesian unicorn), due to which the ecosystem strengthened online trading.
It should be noted that, unlike many Asian tech leaders, Gojek is not exactly a super app. Let me remind you, a superapp is when a company makes an umbrella interface for the user in one place and launches a platform for internal mini-applications, and these mini-applications are already created by third-party developers (well, mostly). Gojek is precisely an ecosystem of digital services developed by the company itself.
Gojek now has more than 100 million active users in Indonesia and several neighboring countries, and about 80% of local entrepreneurs certainly work through it (as their main channel or one of them). All that was needed was to bring order to the leapfrog of Asian scooters.
Gojek often claims the title of the largest digital service in Southeast Asia, but…
… their competitors from neighboring Malaysia do not agree with this…
… Or from Singapore, try to figure it out there.
Appearance Grab into the world a little more prosaically than their Indonesian counterparts. In 2012, two Singaporean-Malaysian Harvard graduates launched a local version of Uber called MyTeksi. They started in Malaysia, where the service was called that for a long time, and since 2013 they began to expand to neighboring countries – first in Singapore and Thailand, and later in Vietnam, Indonesia and the Philippines.
Grab decided to focus on on-demand mobility, so it was not very active in other segments in the first years (although the situation is now changing). But in ride technology they very quickly turned to their full potential.
We started expanding with GrabCar. As the company itself explains, this is not a taxi aggregator, but a service for short-term rental of private cars with a driver. For the client, there are exactly two key differences. Firstly, if Grab Taxi aggregates cars from local taxi fleets, which are driven mainly according to the meter, then in GrabCar private drivers drive at a fixed price (all taxis work like this in our country, but they don’t). Secondly, GrabCar focuses on more premium cars (apparently with air conditioning) and more skilled drivers. That is, in this regard, it is slightly reminiscent of our Wheely. For the company, there are a whole bunch of differences – starting from the level of involvement in the entire chain, ending with the regulator and other nuances.
A little later, Grab will launch ultra-mega luxury cabs under the GrabCar+ brand. Cars at this rate may even have leather seats!!
In 2014, the company digitized those same ojeks on mopeds under the GrabBike brand (it turns out that it re-digitized, following Gojek). Then she added her own car sharing. In 2017, the company offered a children's tariff GrabFamily – it comes as a separate service, but in essence it is just a tariff. In the same year, Grab management decided that it was enough to create related entities, and united almost all of its transport into a single super app, JustGrab. In connection with the merger, new features also appeared – for example, the launch of a single search for all cars with a fixed tariff, and then what will be found faster – be it a taxi or a private owner from GrabCar.
Also, over the years, the service for finding travel companions GrabHitch (something like BlaBlaCar), booking seats on buses, delivering groceries, food and other sundries has appeared. Later, delivery was expanded to a full-fledged e-commerce service under the GrabShop brand. Well, they launched their own payment service – where would we be without it, these are Asians.
Some interesting things about Grab:
During Covid, the company launched a separate service for convenient and quick movement of healthcare workers between home, hospital and patients. The service was called GrabCare. True, he only worked in Singapore, but still cool.
Back in 2016, Grab introduced an in-app chat between driver and passenger. Moreover, since the company immediately aimed at countries, many of which had several local languages, they almost immediately added live first-language speakers to the chat. In this regard, Grab has surpassed its original, because in the Uber app, chat with the driver appeared only in 2017. In Yandex Taxi, a year later.
Not without scandals. In 2022, Grab couriers and drivers in Vietnam carried out mass protest against company policy. In their opinion, due to rising fuel prices, being a courier or taxi driver has become much less profitable, and the company reacted too amorphously to this situation. Grab decided to respond by raising prices for customers (which, generally speaking, is logical), but the effect was so-so – grabbers simply faced a decrease in orders. The authorities even intervened in the situation, and in the end the situation was resolved by tweaking the conditions and commissions.
In 2019 Grab became the first decacorn (i.e. startup valued at more than $10 billion) from Southeast Asia. After this, the service continued its rapid development. Covid and pandemic realities have given an additional boost to the delivery of food, goods and other last-mile services. In 2021, Grab went public through a SPAC. Now at the service near 180 million users and very strong roots in most countries in the region. However, the popularity of its various services may vary by country.
Local Wildberries, pushing Amazon
Right now Shopee – the most visited e-commerce platform in Indonesia and a strong player in Malaysia, Vietnam, Thailand, the Philippines and Taiwan, and also (suddenly) in Brazil.
The company was founded by Singaporean businessman Forrest Lee. In general, he owns the entire Sea Ltd. holding, which in addition to Shopee includes the gaming company Garena (a developer of mobile games and the exclusive distributor of many PC and console hits in the region, also a worthy candidate for analysis), payment services and what not. For many years, the company has been competing with the same Grab at the top of the list of the most valuable companies in Singapore. And Forrest himself topped the local Forbes list for some years.
But oh well, back to Shopee. The company launched in 2015 in Singapore and began exporting to neighboring major countries in the next couple of years. At first it was a C2C marketplace, much like our Avito, but then they introduced B2C sales, and professional large sellers began to take over the turnover.
Separately, it is worth noting that Shopee was strengthening in new markets at a time when the most powerful players were actively entering the region. Firstly, in 2017, Amazon appeared in Southeast Asia. Secondly, in 2016, Jack Ma bought the Singapore platform Lazada, after which he began to burn megatons of yuan to compete. Lazada, by the way, is also worthy of analysis in this article, but it has Chinese owners and resources behind it, so it’s not really our subject.
However, Shopee was able to beat them in Indonesia, and in other markets it retained a very good share. So how did they do it?
First, Shopee was able to understand the key pain points of its target markets faster than its competitors. In order:
The first pain is the not very high level of well-being (pardon the euphemism) of the local population. Because of this, it was necessary to focus on mobile phones, and in such a way that the service would work normally on any lowlife shovel. To achieve this, Shopee has taken a mobile-first approach from the very beginning.
Mobile-first is when any interface, process or feature is designed directly for a smartphone (mobile browser or application). And only later this whole thing is adapted for the desktop format.
Right here COO Shopee does a good job of explaining what this means in practice.
The second pain is the low technological literacy of the population, multiplied by widespread poverty. This explosive mixture led to an extremely low level of trust in online trading. Which is logical when you are not good at technology in general, and any scam can be fatal for a modest family budget. Shopee's solution is Shopee Guarantee, its own escrow service. The fintech competencies of the parent company Sea Ltd. helped here.\
Escrow is a payment method where a third party first places (escrows) the buyer's funds with itself and releases them to the seller only when the purchase is successfully completed. For example, when the buyer received the goods and notified the service about this by clicking the corresponding button in the application.
Simply put, the service acted as a financial guarantor of the transaction. By the way, there is an opinion that Alibaba once strengthened in China with the help of a similar trick.
The third pain is weak logistics infrastructure. Here Shopee use a hybrid approach. Firstly, he actively connected many local logistics partners, while strengthening them in every possible way and supplementing them with his own logistics centers. Where logistics were very difficult, the company built infrastructure from scratch. At the same time, to make delivery more accessible and attract more logistics partners, Shopee actively subsidized and offered free or discounted delivery.
In addition to treating deep-seated pain, Shopee also worked well on the consumer specifics of local markets. For example, I added a tab with discounts and special offers (essentially a continuous channel broadcasting discounts), and also added a separate section with sales through live streams. The latter is a separate fetish of Asian trade, I wrote a lot about it on my channel (once, two, three).
Now Shopee has about 400 million users (some sources say about 300 million, others about 500 million, so I rounded), which do about 215 unique visits to the service per month. About half of them are Indonesians, the rest are residents of other Southeast Asian countries.
The company's entry into Brazil is also interesting. Shopee began entering this market in 2020, and in early 2021. became the most downloaded shopping app in the country. The key to Brazilian success is the gamification of engagement. Shopee launched several mini-games in the app, the winners of which received discount and gift coupons. And this obviously could not have happened without the game development unit of the parent company. In general, Forrest Lee is very good at achieving synergies between his businesses; our ecosystem builders should definitely explore his approach.
By the way, did you notice that the article talked about three huge trans-Asian companies based in Singapore? Lee Kuan Yew's grandfather clearly knew something.
That's all for today. Would you like the same article about Japan and Korea? Then this is the place for you.
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