“With the rapid development of China’s digital economy, the leaders in the internet business will one day venture beyond the country to bring their services to other parts of the world. Same goes for Meituan, which will combine its services with other local players to lead the e-commerce industry,” Wang said.
Home to 650 million people, Southeast Asia could certainly take a leaf out of Meituan’s playbook. Especially for super app aspirants Grab and Gojek, which are rapidly diversifying their businesses beyond ride-hailing and food delivery in order to become all-inclusive apps, much like Chinese super apps Meituan and WeChat.
SEA = Indonesia?
The food delivery business, which helped drive Meituan towards profitability in 2019, remains a tough nut to crack. In Southeast Asia, although food delivery is poised to bring in some US$20 billion in gross merchandise value by 2025, the industry remains a heavily loss-making business. Grab Thailand’s then-chief Tarin Thaniyavarn said the Thai unit lost US$22 million in 2018 and losses nearly doubled in 2019 as the food delivery business remained unprofitable. And that is just one market.
But the business could provide user stickiness, especially when the user base is as wide as Grab or Gojek’s, beyond ride-hailing. A strong user base also helps monetise merchants.
Then there’s payments. Currently, Gojek boasts an edge over Grab as it bagged funding from US tech giants Facebook and PayPal to boost its payments business. And if Meituan chooses to inch closer to the Indonesian market, it could further speed things up for Gojek.
A venture funding consultant who asked not to be named said the Gojek investment by Meituan is an opportunistic move. “I think it followed [the footsteps of] Tencent [which invested in Gojek in 2017 and owns about one-fifth of Meituan],” said the consultant, adding that Meituan has recently set up a global investment team in October 2019 to “seriously look at the global market”.
Prior to the mobile revolution in the region, Asian economies looked to developed or Western markets for innovation, ideas, and adoption. For Grab and Gojek—which started off as ride-hailing service providers in 2012 and 2010, respectively—US-based Uber was a role model.
But a lot has changed since
The explosive growth in mobile internet penetration in Southeast Asia is looking a lot like China, which has been the leading market in mobile usage and has spawned many mobile-first businesses, including WeChat.
This makes the Chinese experience much more relevant to emerging economies in Southeast Asia, says Jixun Foo, partner at global venture capital firm GGV Capital, which led Grab’s Series B investment in May 2014. “Southeast Asia is more of a follower market, where it is more adaptive towards China’s strategies, making it easier for Chinese companies to expand their presence, technology and investments to this region,” he adds.
Number of services
Meituan Dianping
At least 10
Grab
8-13
Gojek
20 (Indonesia only)
Of the 360 million internet users in Southeast Asia—about two-thirds of the population—90% access the internet via their mobile phones, according to a report by Temasek, Google and Bain & Co.