Blackbox explores the latest consumer preferences and usage habits across Southeast Asia, revealing which ride-hailing app stands to benefit the most as the region emerges from the pandemic.
Ride-hailing apps have disrupted urban transportation in cities all around the world, more than anything else this past decade. Long gone are the days of snaking lines of people waiting for taxis. Millions of commuters now rely on apps on their mobile phones to order rides to their chosen destinations whether it be for work or recreation.
Ride-hailing services have arisen as a key feature of the recent intensified digital revolution, as well as the consumer shift to the sharing and gig economy overall. In some countries, government policies have actively advanced such shifts in user habits — for example, Singapore’s move towards a “car-lite society” that means reduced car ownership and greater reliance on modes of travel involving vehicle sharing, backed by greater societal support for eco-friendly shifts to help address climate change.
In 2021, the ride-hailing market in Southeast Asia, which includes online transport and food delivery, amounted to approximately US$13 billion. By 2025, this market is expected to reach US$42 billion.
A new research study conducted by Blackbox across Singapore, Malaysia, Vietnam, Thailand, Philippines, and Indonesia, reveals the ride-hailing sector in Southeast Asia is led by Grab, which operates across the six key ASEAN markets, as well as in Cambodia and Myanmar. Founded in 2012 in Malaysia as an app to provide safer and more reliable transport, the company moved its headquarters to Singapore in 2014. Since then, it has expanded beyond transportation to other services including food delivery, digital payments, and other areas of fintech.
Grab’s only serious regional ride-hailing competitor is Gojek, an Indonesian company set up in 2010 and operating in many of the same sectors as Grab. Gojek is currently present in three markets: Indonesia, Vietnam, and Singapore. It was initially operating in Thailand until mid-2021 when the Thai entity was acquired.
Other than Grab and Gojek, numerous local ride-hailing apps have popped up in major cities across the region, but so far their share is only a fraction of the two leading players.
Ride-hailing now part of daily life across Southeast Asia
Ride-hailing services — booking a taxi, car or motorbike — have become an essential part of everyday life in Southeast Asia. More than half the respondents surveyed (53%) had used ride-hailing apps during the survey period. Vietnam (69%) and Singapore (64%) recorded the highest proportion of users.
The markets with the lowest proportion of users (around two in five users) are Malaysia (41%) and Thailand (38%). In some places, temporary factors have affected demand, including relatively more stringent movement control measures in Malaysia, and regulatory restrictions in Thailand.
Preference: Which ride-hailing brand leads in the region?
In terms of brand popularity, Grab is the clear winner among ride-hailing apps across all six markets, with 75% of users selecting Grab as their most often used app. Gojek is in second place, well behind at 13%.
Grab’s lead is strongest in Malaysia (94%) and Philippines (91%). In three other markets, Grab has a lead of six-fold or more over the closest challenger. For example, in Vietnam, Grab leads Gojek (73% to 10%).
Except in Indonesia, domestic industry players, even longstanding ones, have fallen behind significantly. In Singapore, Grab (74%) is now miles ahead of Comfort (12%). In Thailand, the gap is even bigger, with Grab at 80% and LINE Taxi stuck at 11%.
The only challenger of note to Grab’s leadership is Gojek in Indonesia. At 43% usage, Gojek is not far behind Grab’s lead at 52%. For Gojek, factors such as a longer in-country track record and “national pride” among consumers may have been helpful, but Grab has proven to be a formidable competitor. Across these six markets, we observed that Gojek is the only player able to take a sizeable, albeit still small, slice of the market, securing 11% in Singapore and 10% in Vietnam.
Success: How did Grab become so successful in Southeast Asia?
Grab’s innovative application of information technology and big data, as well as related aspects such as dedication to customer service and strong investor backing, has enabled it to grow even with well-established players such as longstanding stalwarts such as Comfort in Singapore.
After a brief tussle for regional market share with its US-based rival Uber, Grab acquired Uber’s Southeast Asian operations, with Uber now holding a minority stake in the company. In 2019, Grab announced its setting-up of a second headquarters in Jakarta, signalling its serious region wide aspirations.
The global digital disruption which had already carried Grab on a ride of exponential growth looks to have been boosted further by the pandemic. Since 2020 it has onboard 600,000 new merchants across Southeast Asia.
On the demand side, another major factor in its favour are the increasing numbers of new- and older-generation customers and partners becoming more accustomed and comfortable with smartphone transactions, embracing the sharing and gig economy. Brand loyalty to Grab is also more deeply established and enhanced with its customer-oriented efforts in branding and more recent efforts to address social and environmental issues in the region.
The Future: Ride-hailing usage expected to continue growing
Since 2020, the pandemic has triggered game-changing shifts in consumer attitudes and behaviour. The increase in demand for delivery services, especially during periods of pandemic lockdown along with movement restrictions, were a major counterbalance to the drop in demand for transportation to and from places of work, business, and recreation. Such changes — especially with more people working from home — look set to modify, for good, how people will adjust their commutes to achieve a different work-life balance, and even how societies are fundamentally organised.
As COVID-19 restrictions are gradually relaxed, usage of ride-hailing apps, unsurprisingly, appears set to increase in all six of the markets surveyed. The greatest enthusiasm is seen in Thailand, with 76% of respondents indicating a desire to boost their usage of such services. This makes Thailand, which recorded the lowest previous usage (38%), the ASEAN market with the highest pent-up demand and potential.
In second spot is Vietnam (69%), which is already the market with the highest usage (69%). By contrast, Singapore is an interesting market, with the lowest forecast of future growth at 37%, despite a similarly high existing usage (64%).
Interestingly, amongst all six countries, Philippines had the highest proportion of respondents (23%), predicting reduced usage, perhaps due to factors such as renewed access to other more affordable transport options.
Competition: Grab looks to retain top spot in a post-COVID-19 future
In terms of brand preference after the pandemic, Grab is the runaway leader in all the markets except Indonesia. Overall, 78% picked Grab as the most-preferred app to use post-pandemic for four-wheel ride-hailing[1].
In second place is Gojek, far behind at just 9%, with the other players holding negligible scores. Grab’s leadership in brand loyalty was most significant in Malaysia (94%) and Philippines (91%).
Only in Indonesia is there a contender of note against Grab (Gojek at 40% vs. Grab 54%). Gojek also has a minor foothold in Singapore (Gojek at 13%, Grab 72%). However, in Vietnam, where it ranked second (10%) as the most often used ride-hailing app, Gojek doesn’t feature in the top 5 most preferred apps post-pandemic, suggesting that Gojek faces challenges, post-pandemic.
Conclusion: Ride Hailing is Here to Stay and More
Ride-hailing apps are clearly here to stay in Southeast Asia. They have gained much ground as a most frequently used app on consumers’ smartphones. In transforming personal transportation, regional companies that are digital disrupters have jostled aside even longtime, homegrown industry players everywhere except Indonesia.
Looking ahead, Grab appears in pole position to maintain its significant lead, even once the pandemic is over. In Indonesia, it’s currently a close fight, with much at stake for the key competitors. Elsewhere, growth opportunities exist for all players but, at this point in time, signs suggest it’s really Grab’s game to lose.
[1] Two-wheel ride hailing is only available in Vietnam, Thailand and Indonesia.
Author: Blackbox Research Team
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