NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, March 27, 2019

By Clay Chandler

We all scream for ice cream.

That’s the idea behind Ice Cream Day, a promotion launched by Uber Technologies in 2012. The ride-share giant courts customers by allowing them, for one day each summer, to arrange instant dessert delivery through the Uber app. But in June 2015, as the American powerhouse expanded that campaign across 53 countries, Malaysian entrepreneur Anthony Tan saw a chance to cast Uber as an outsider—and burnish the appeal of his homegrown ride-hailing venture, Grab.

Just after Uber’s event, Grab offered what Malaysians really scream for: smelly durians. Customers in Kuala Lumpur, the capital, could have one of the pungent fruits rushed to their doorstep by a Grab driver. To deliver on that promise, Grab had to devise special packaging: Durians, though considered a great delicacy, emit an odor so overpowering that they are banned in many airports and hotels. Grab surmounted that obstacle and offered the fruits at the bargain price of a single ringgit (24¢). They sold out almost immediately, and the “GrabDurian” marketing coup is now well into its fourth year.

“No foreigner would have thought to do that,” chortles Tan. Uber, he says, “couldn’t fully appreciate how local you needed to go” to win in Southeast Asia.

Grab has employed hyperlocal strategies with remarkable success. Since its 2012 launch from a warehouse closet in a gritty Kuala Lumpur suburb, the venture has expanded to eight countries. It boasts 2.8 million drivers—more than the 2 million claimed by Uber. Grab says its app has been downloaded to 139 million devices and that it processes more than 6 million ride orders a day. Grab’s 2018 revenue topped $1 billion, and it expects to double that figure this year. Along the way, it outlasted its ice-cream-peddling rival: In March 2018, Uber announced that it would sell its Southeast Asian operations to Grab in exchange for a 27.5% stake in the company and a seat on its board.

Photo courtesy of Ava Systems.