Grab is a Singapore based ride-hailing platform that holds a large presence in Southeast Asian countries such as Vietnam, the Philippines, Malaysia, Thailand, Singapore, and Indonesia. Grab is planning a $700 million investment in Fintech companies in Indonesia, which is already their largest market. With only 75 of the 250 million people in Indonesia having banking Fintech is a great avenue to provide access to a part of the population that hasn’t had the ability to use Grab’s services.
Grab co-founder and CEO Anthony Tan states it well, “We see this huge, unbanked population becoming bankable. If we can… give access to those who don’t have access to credit, it’s a massive opportunity.”
Fintech transactions are expected to grow at an annual rate of 20% in Indonesia. In addition to the rise in Fintech startups in the country, there is a significant rate of smartphone use. This investment makes it evident of how important Fintech is, especially in emerging and developing markets. It is easier for people to buy a cheap smartphone than get bank credit. I see this investment having a high rate of return for Grab.
https://www.cryptocoinsnews.com/uber-competitor-grab-700-million-fintech-indonesia/
I am a little surprised Uber or Lyft haven’t yet been able to break into this market when another ride-sharing company has. Since the companies at rather similar on the surface, I would like to know what differentiates Grab from the existing big market players and whether the other firms will be competitive if they choose to expand to all the mentioned South Asian countries.
Upon reading the original blog post again, I would like to further elaborate on my previous comment. It seems like Grab is trying to go beyond its traditional service of ride share (if it is a competitor to Uber) and invest in more finance-oriented FinTech. I wonder how people will receive the expansion as Snapchat and Facebook’s money transfer options do not seem particularly popular, as drawn from my personal experience.