A short guide to new mobilities in Southeast Asia

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Posted on 29.11.21
International Mobility insights
A short guide to new mobilities in Southeast Asia

Based in Singapore since 2017, it was important for Via iD to share its knowledge of the Southeast Asian innovation and mobility ecosystems with its European Corporate Partners!  We brought the Mobility Club to Singapore in November for a series of meetings with our local network: here’s what you need to know about new mobilities in the world-leading smart city!

#1 The Super App War is Raging in Southeast Asia

It is difficult to truly understand the new mobility market in Southeast Asia without coming to grips with the competition between Gojek and Grab. These two mobility startups have a simple goal: to become the one-stop app for users’ daily needs.

This so-called ‘Super App’ model, historically launched in China with Wechat and Alipay, is essentially based on a digitised payment solution and an extensive customer base. Both Gojek and Grab’s specificity: they have met these vital conditions by building their models around mobility.

The former was established in Indonesia in 2010, and succeeded in digitising the ojeks, motorbike taxis drivers that are indispensable to avoid the huge traffic jams that characterise the region. Grab, on the other hand, launched in 2012 in Malaysia (before moving its HQ to Singapore in 2014) as a taxi aggregator. The two startups now offer similar mobility offers (taxis, ride-hailing, two-wheeled…) as well as various other services that are precisely the specificity of a Super App. One difference, however, is that Grab focuses on strategic partnerships (with BookingToyota and Mastercard) as well as aggressive geographic expansion, while Gojek grows stronger by accumulating more and more services (21 as of today!) and by acquiring additional technology and service bricks.

Here are a few figures to understand the magnitude of the phenomenon as of today: Grab boasts 2.8 million drivers and 140 million app downloads in the 8 Southeast Asian countries in which it operates. Gojek, which only took off once its app was launched in 2015, has amassed 1 million drivers and 110 million app downloads in 6 countries. Even more impressive is the amounts raised by these two giants for which international investors compete. Gojek is now valued at $10 billion, with investors such as Google, Tencent (the Chinese juggernaut behind WeChat), Temasek or Via iD. Grab has now raised $14 billion from Softbank, Alibaba (Alipay’s mother company), Didi, Honda and Toyota. Note Uber’s substantial Grab share (27.5% as of March 2018) related to the sale of ride-hailing and food delivery activities in Southeast Asia. A clear indication of how difficult it is for US digital giants to expand in Asia (see also the sale of Uber’s China operations to Didi in 2016).

The success of Gojek and Grab must be carefully analysed by new mobility actors interested in the platformization of mobility and MaaS. Their ability to build complex ecosystems of partners and service providers, their strong user-centric approach and ultimately high user retention are inspiring. It’s no surprise that Uber announced in September 2019 that it wanted to reinvent itself as the ‘operating system for your everyday life’.

To learn more about the competition between Gojek and Grab, we recommend viewing KrASIA’s detailed comparison of the various services provided by these 2 giants, as well as a focus on the competition between their founders who were once friends at Harvard by Fortune. Fabernovel’s study on WeChat, the first Super App, is also worth a read!https://www.youtube.com/embed/Tn4MGnTkF8c?feature=oembed

#2 Singapore: the meeting place of Southeast Asian entrepreneurs and investors

A hub of world trade since the beginning of the 20th century, Singapore has constantly reinvented itself since its independence: a regional energy hub (even today), an industrial platform geared towards advanced technologies in the 1970s and ’80s, a major financial centre since the 1990s, Singapore now aims to become one of the world’s innovation capitals.

Beyond its accommodating fiscal policy and stable pro-business regulatory framework, the city-state relies mainly on strong governmental agencies. These include the Economic Development Board Enterprise and Enterprise SG, which are coordinated around multi-year strategic plans that demonstrate a long-term vision. We also note the emergence within a few decades of a world-class higher education and research ecosystem around local and international stakeholders (National University of Singapore, INSEAD, Singapore-MIT Alliance for Research and Technology…). Of course, this policy relies on the incredible financial power of the Singaporean state, exemplified by its Sovereign Wealth Fund Temasek, and a large amount of funding supports (grants, subsidies, tax breaks, etc.) for innovators. Matched investments mechanisms also accompany VC funds that support Singapore-based startups.

As a result, a strong innovation ecosystem has emerged in Singapore over the past decade, particularly around e-commerce, logistics and e-payment. The city-state does not yet equal Silicon Valley, especially in terms of disruptive innovation and deep tech, but is positioning itself as a marketplace where regional startups and international investors meet. Less than 4 hours of flight time are concentrated on 636 million inhabitants, including a middle class of 300 million people with extremely digital customs (50 million more by 2022). India, China and their 2.7 billion inhabitants can also be reached in up to 6 hours. The latter, where world-class breakthrough technologies (EVs, autonomous vehicles, AI, etc.) are emerging, remains very difficult to reach from outside, even from Hong Kong. Those who wish to source innovative solutions early enough in China must be accompanied by players with a powerful local network of investors and corporate partners. It’s worth mentioning Idinvest (whose portfolio includes the Chinese startups WeRide -autonomous vehicles-, Forsee Power – battery maker- and DST -EV trucks leasing) and Cathay (see the Autonomous Driving Brains startup Momenta).

As such, many international corporate players have set up innovation labs in Singapore to expand across the region. Among the players involved in the mobility sector are the Lufthansa Innovation Hub and the Engie Factory. This is also why Via ID established an office there in 2017. A good example of our office’s regional monitoring objective: the 6 laureates of our Asia Mobility Startup Challenge were from Singapore, India, the Philippines, Australian and India.

#3 Singapore: a smart city that revolutionizes mobility

As a small (only 7 times larger than inner Paris) and densely populated country, Singapore very quickly developed a unique and innovative approach to transport and mobility. The city is characterised by highly developed and efficient public transport infrastructure, a legacy of decades of planned heavy public investment as well as sometimes coercive regulations. This is exemplified by the ‘Certificates of Entitlement’, required permits to own a personal vehicle, the number of which is limited with a cost varying between SG$30k and SG$40k in 2019.

As such, there is very high usage of public (metro, buses, trains…) and shared (taxis, ride-hailing…) transportation: they represent around 65% of journeys made, compared to 32% for individual vehicles and 2% for soft mobilities.

The strong arm of the Singapore Government is the Land Transportation Authority (LTA), which regulates and plans the transport sector and associated infrastructure. Its reach also covers new mobility, as evidenced by the ban of electric scooters on footpaths at the end of 2019. The majority of public transportation and taxis are operated by SMRT (a subsidiary of Temasek) and ComfortDelGro, also active VC investors. Momentum, SMRT’s CVC, has notably invested with Toyota in the MaaS startup MobilityX, as well as in the on-demand bus technology startup SWAT with ComfortDelGro Ventures.

As already emphasised, Singapore’s public policies are characterised by the development of long-term strategic plans. The Smart Mobility 2030 program, coordinated by the LTA, is dedicated to ‘moving towards a more connected and interactive land transport community’. It is in this context that BlueSG, a subsidiary of the Bolloré Group, has rolled out since 2017 a car-sharing system for electric cars that will include 1000 vehicles and 2000 charging points by 2020.

Another symbolic initiative is the ambition to be the first country to adopt autonomous vehicles on a large scale, structured around the Singapore Autonomous Vehicle Initiative (SAVI). Tests have been carried out since 2016 by the Boston startup NuTonomy (acquired for $400M by Delphi, an equipment manufacturer), and will gradually be extended throughout the western side of the island (more than 1000 km of roads). The government has also launched the Centre of Excellence for Testing & Research of AVs (CETRAN), one of the largest public-private research initiatives on autonomous mobility. Finally, SG Innovate, the Government deep tech VC fund, has already invested in 5 autonomous mobility startups. All these efforts are yielding positive results: Singapore is the world’s leading Asian country and world’s second in KPMG’s Autonomous Vehicles Readiness Index.

Singapore must be observed as it is: a true laboratory for new mobility, that validates the relevance of new models and technologies.  On the other hand, it is not simply a template. Indeed, the very special and unique environment of the city-state (size, population density, level of development, quality of infrastructure and above all strong centralised regulation) means that locally validated solutions are not necessarily replicable in other geographies.

This snapshot makes you want to know more about the Southeast Asian new mobility trends and key players? Don’t hesitate to reach out!