The 2 most innovative companies in
the world today are changing how hundreds of millions of Asian consumers buy
food, book hotels, and (a lot) more
The “transactional super app” is transforming local businesses
across Asia as well, digitizing their operations and fueling their growth and
expansion.
50 MOST INNOVATIVE COMPANIES
In the first half of 2018, Meituan Dianping—a Chinese tech
platform that expedites the booking and delivery of services such as food,
hotel stays, and movie tickets—facilitated 27.7 billion transactions (worth
$33.8 billion) for more than 350 million people in 2,800 cities. That’s 1,783
Meituan-enabled services every second of every day, with each customer using it
an average of three times a week.
Meanwhile, in Southeast Asia, Grab, the Singapore-based
ride-hailing company, forced Uber out of the region in 2018 and acquired its
local operations. A few months later, it expanded its app to offer its 130
million users not only food delivery and travel booking, but also financial and
other services. These efforts helped Grab hit $1 billion in revenue in 2018 and
attract more than $3 billion in fresh funding to expand. Later this year, it’ll
add healthcare services from Ping An, the Chinese digital health giant.
Both Meituan and Grab are what’s known as transactional super
apps, amalgamations of lifestyle services that connect hundreds of millions of
customers to local businesses. “We want to help millions move through the
economy and up the social ladder,” says Grab cofounder Hooi Ling Tan. They may
not be well known in the U.S., but Meituan and Grab are changing the lives of
hundreds of millions of consumers and millions of merchants with highly complex
operations disguised as simple transactions—elegant tech to enable real-world
experiences.
Meituan, which views food as its core offering, is skilled at
leveraging its data regarding users’ consumption habits, including price
sensitivity, to recommend other things they’ll like. “Our strategy in
integrating different businesses,” says Xia Huaxia, Meituan’s chief scientist,
“is to attract a large volume of users with high-frequency services, and then
push forward some low- and medium-frequency ones like haircuts and marriage services.”
Grab uses transportation data to figure out what services to roll out next.
“We’ve been bringing users to these businesses,” Tan says. “Now they can come
to you.”
Success for a transactional super app requires what Xia calls “a
culture of long-term patience.” Meituan is competing fiercely with Alibaba, and
although its revenue in the first half of 2018 was $3.8 billion, the company
has sustained significant losses as it pursues its vision. Grab is fighting
with another startup, Go-Jek, in parts of Southeast Asia. In its effort to win,
Grab has opted to partner with the likes of Toyota, Microsoft, and Mastercard
rather than build everything itself. “We can be smarter and faster by making
the platform more open,” says Tan.
Efficiency also drives innovation. Meituan’s Smart Dispatch
system, introduced in 2015, schedules which of its 600,000 motorbike riders
will deliver the millions of food orders it fulfills daily. It now calculates
2.9 billion route plans every hour to optimize a rider’s ability to pick up and
drop off up to 10 orders at once in the shortest time and distance. Since Smart
Dispatch launched, it has reduced average delivery time by more than 30%, and
riders complete 30 orders a day, up from 20, increasing their income.
Uber was once poised to popularize the transactional super app.
Instead, Meituan and Grab—and the companies emulating them globally, from
Swiggy in India to Rappi, in Latin America—are leapfrogging ahead to build a
new model for the service economy for billions of people.
https://www.fastcompany.com/90298866/meituan-grab-most-innovative-companies-2019
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