Ride Sharing in Southeast Asia

AN OVERVIEW OF THE ASEAN LANDSCAPECREATED BY DYLAN LER

Economics of South East Asia

Key Takeaways ASEAN’s total population at 625 million people makes it a HUGE market for global players like Uber.

With a current GDP of $2.4 billion and increasing RAPIDLY, it is a region to worthy of paying attention and scaling market share.

Addressable Market Ranking Name Country Population

1 Jakarta Indonesia 10,135,030

2 Bangkok Thailand 8,305,218

3 Ho Chi Minh City Vietnam 7,981,411

4 Hanoi Vietnam 7,067,000

5 Singapore Singapore 5,399,000

6 Yangon Myanmar 5,451,439

7 Surabaya Indonesia 2,843,114

8 Quezon City Philippines 2,761,720

9 Bandung Indonesia 2,575,478

10 Bekasi Indonesia 2,510,951

ContinuedRanking Name Country Population

11 Medan Indonesia 2,185,789

12 Tangerang Indonesia 2,001,925

13 Hai Phong Vietnam 1,946,000

14 Depok Indonesia 1,869,681

15 Manila Philippines 1,652,171

16 Semarang Indonesia 1,575,058

17 Palembang Indonesia 1,561,959

18 Caloocan Philippines 1,489,040

19 Kuala Lumpur Malaysia 1,475,337

20 Davao City Philippines 1,449,296

TOTAL ADDRESSABLE MARKET: APPOXIMATELY 72 MILLION PEOPLE

Smartphone Users & PenetrationCountry Smartphone users

(millions)User penetration (% mobile phone users)

Indonesia 55.4 37.7Philippines 26.2 36.6Vietnam 16.6 36.2Thailand 15.4 39.2Malaysia 8.9 46.6Singapore 3.8 85.2Total 126.3 Percentage increasing every year

Key TakeawaysIn theory, total population of Southeast Asia is about 625 million people (HUGE POTENTIAL). However, it is important to capture market share in large cities FIRST (about 72 million people in just 20 largest cities) as smartphone and data penetration is high.

Smartphone ownership is at about 126 million in just the 6 Southeast Asian Powerhouse (Thailand, Indonesia, Malaysia, Singapore, Vietnam, Philippines) with tremendous growth rate.

Hence, market leaders should move fast to expand from cities to cities (in different countries) around Southeast Asia and NOT focus resources on a single country at a time.

To scale at a high pace, market leaders should hire local operations team (who understand the market landscape) in a new city from the ground up. This will be more cost effective in the long run compared to transferring teams from one country into a new country. (For example from Uber USA to Uber Thailand)

Legality & StatusCountry Legal Status Ease of

OperationImportant Notes

Indonesia Given permission to operate. On March 2016, a new decree which puts obstacles to Uber has been made public.

Yellow light 1. New decree states companies cannot work with private car owners.

2. Apps cannot set fares and recruit.3. Companies must disclose data to

government.Philippines Approved & legalized

nationwide.Green light 1. Cars need to be GPS-equipped and

less than 7 years old.

Vietnam Permitted to operate if cars registered as taxis.

Yellow light 1. Insist that ride sharing companies comply with taxi regulations.

ContinuedCountry Legal Status Ease of

OperationImportant Notes

Thailand Still illegal pending reviews. Red light 1. Government recently suspended Uber & Grab’s motorcycle services.

Malaysia Recently announced to be legalized.

Green light 1. New proposal to integrate ride sharing companies and local taxis in the works.

Singapore Approved & legalized with strict regulations.

Green light 1. Vehicles must be registered under Land Transport Authority (LTA)

2. Drivers must complete government approved 10 hour course.

3. Drivers must go through medical & background screening.

Key TakeawaysUber faces heavy backlash in majority Southeast Asian countries from local taxis which in turn forces local government to treat Uber as a taxi company (with the same regulations) to satisfy all parties.

Governments decisions’ to legalize ridesharing is a good sign. However, strict regulations stifles Uber’s growth in the country.

Foreign ridesharing companies like Uber must work to convince local government that it is a technology company and not a transportation company.

Companies should consider setting up local entities and incorporate as a company locally to fuel growth at a faster pace.

Major Players

LocalizationMotorcycles

In Southeast Asian cities, heavy traffic congestion and a cheaper price tag makes motorcycle ownerships high.

For ride sharing companies to capture market, it is strategic to launch ride sharing motorcycles in certain cities to capture market share.

Cities like Bangkok, Jakarta, Manila are noteworthy.

Using cash

In majority Southeast Asian countries, credit card and electronic payment infrastructure has not been fully established. By allowing cash transactions, companies can capture market share first while the country transitions to electronic/card payments.

Localization Incorporating as local companies By incorporating locally, foreign companies can hire local operation teams that are familiar with the local landscape. It is also cost effective and will ensure local government’s trust in the company.

Country Top Messaging Apps

Malaysia Whatsapp

Singapore Whatsapp

Thailand Line

Philippines Messenger

Indonesia Blackberry Messenger (BBM)

Vietnam Zalo, Line

Local Social MediaSoutheast Asia is a buzzing region with high social media activity. Knowing the top messaging apps in each country will allow companies to conduct strategic ads and promotions to lower customer acquisition cost.

Reference1. https://en.wikipedia.org/wiki/List_of_cities_in_ASEAN_by_population

2. https://www.techinasia.com/talk/digital-southeast-asia-q4-2015

3. http://www.emarketer.com/Article/Asia-Pacific-Boasts-More-Than-1-Billion-Smartphone-Users/1012984

4. http://jdih.dephub.go.id/assets/uudocs/permen/2016/PM_32_Tahun_2016.pdf

5. https://www.techinasia.com/indonesias-new-transportation-regulation-uber-grab

6. http://time.com/3854958/uber-legal-philippines-ride-hailing/

7. . https://newsroom.uber.com/philippines/arriving-now-progressive-ride-sharing-regulations-in-the-philippines/

8. http://www.thanhniennews.com/business/uber-ordered-to-respect-vietnam-laws-when-running-cabhailing-service-40073.html

9. http://www.bangkokpost.com/tech/local-news/975773/make-us-legal-pleads-uber

10. http://www.bbc.com/news/business-36328840

11. http://www.thesundaily.my/news/1932155

12. http://www.straitstimes.com/singapore/transport/parliament-uber-grabcar-drivers-to-have-vocational-licences-undergo-background

13. https://www.similarweb.com/blog/worldwide-messaging-apps

14. http://www.statista.com/statistics/258749/most-popular-global-mobile-messenger-apps/