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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.

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
[Photo: The Voorhes; Icons: Fae Frey (wallet); Paisley (car); Linseed Studio (heart); Bom Symbols (silverware); Maxim Basinski (plane) at the Noun Project]








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 $33.8 billion worth of transactions for more than 350 million people in 2,800 cities. In food delivery alone, it handled 2.77 billion transactions: That’s 178 Meituan-enabled services every second of every day. The average customer used Meituan 38% more often than the prior year.

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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.

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