A SECOND LIFE FOR A SUPER APP

GOTO HAS LOST THE BATTLE FOR REGIONAL DOMINANCE TO RIVAL GRAB. A FOCUS ON FINTECH COULD FUEL ITS REBOUND

- BY LIONEL LIM

THE SOUTHEAST ASIAN super apps GoTo and Grab have a lot in common. Both started in the early 2010s to fill a hole in the on-demand, private-hire transport and delivery service sector before moving toward the idea of a super app (much like what is seen in China), later adjusting their strategies to streamline offerings.

Now, after a decade or so, Grab (No. 128 on the Fortune Southeast Asia 500) has arguably risen to the top. The firm’s on-demand services are available in eight of Southeast Asia's 11 countries, while GoTo’s on-demand arm, Gojek, is lagging in the sector's market share and has exited all Southeast Asia markets for on-demand services save for Singapore and its home market, Indonesia. But GoTo (No. 266) remains formidable in Indonesia, the region's largest market—so much so that the rumor mill is spinning with talk of Grab seeking to buy some, or nearly all, of its chief competitor.

Even if GoTo agrees to sell its on-demand services to Grab, the deal would likely need to be cleared by regulators in Singapore and Indonesia. If it’s blocked, an agreement to sell in the first place still signals an admission that GoTo has lost the on-demand sector battle. Instead, it’s making a big bet on fintech to drive future growth.

WITH “G” NAMES, green branding, and ride-hailing roots, Grab and GoTo have long been locked in rivalry. Grab’s ascendance to a position in which it can snap up slices of GoTo’s business can be traced back to how the two companies diverged from their early days, eventually leading to Grab’s regional expansion and GoTo’s regional retreat to focus almost entirely on its home market.

Grab, established in 2012 as MyTeksi in Malaysia, moved quickly to expand into other Southeast Asian countries: It entered the Philippines, Singapore, and Thailand in 2013, and Vietnam and Indonesia a year later.