1.

New market entry

2. New product
3. Grabcars pricing
4. Grabs issues

1. New market entry

Why and should Grabcar enter any of this markets (choose one): Khanh Hoa,
Quang Ninh, Da Nang. State clearly any assumptions and have an Excel model
to demonstrate business case with investments.

Estimate the size of three markets

Despite having lower population,
Number of 3G users in three markets
Unit: thousands
Da Nang has significantly higher
1,000
urbanization: 87% compared to
Khanh Hoas 45% and Quang
750
Ninhs 61%
Assuming number of 3G users has 500
858
positive correlation with
716
523
urbanization, Da Nang has more
250
3G users than Khanh Hoa and
0
Quang Ninh
Khanh Hoa
Quang Ninh
Da Nang

We should prioritize Da Nang due to its

market size
Source: General Statistics Office of Vietnam, Vietnam Digital Landscape 2015 Report by Moore Corporation

Da Nang with 21-33 thousands potential customers

Estimate 858,000 smartphone
users with mobile internet in Da
Nang

16-24
17.70%
220,087
Low
High
Product penetration
3%
4%
User
6,603
8,803
Average revenue/customer
15,000 20,000
First month revenue (millions VND)
99.0
176.1
Population structure
3G user by age group

Age group
Population structure
Product Penetration Low
Product Penetration High
Average revenue/customer, Low
Average revenue/customer, High

25-34
16.40%
203,922
Low
High
4%
6%
8,157 12,235
15,000 25,000
122.4
305.9

35-44
14.90%
185,271
Low
High
2%
4%
3,705
7,411
10,000 15,000
37.1
111.2

Source: Vietnam Digital Landscape 2015 Report by Moore Corporation, personal analysis

16-24
17.70%
3%
4%
15,000
20,000

25-34
16.40%
4%
6%
15,000
25,000

45-64
20.00%
248,686
Low
High
1%
2%
2,487
4,974
5,000 10,000
12.4
49.7

35-44
14.90%
2%
4%
10,000
15,000

45-64
20.00%
1%
2%
5,000
10,000

Total

Low

High

20,952

33,423

270.9

642.9

Projection shows profitability of Da Nang

Six-month Projection

Assumptions

Monthly growth
Grab's fees
Variable costs
Fixed costs (millions VND)

6%
20%
50%
30

Assumptions need to be revised

to reflect true cost of the
business

Revenue
Grab's revenue
Variable costs
Fixed costs
Profit

Low
High
1,889.5 4,484.1
377.9
896.8
188.9
448.4
180.0
180.0
8.9
268.4

Further analysis, such as revenue

sensitivity, will provide a more
accurate projection

Potential profit range from 9-268 million VND

in 6 months
Source: Personal analysis

Need to consider other factors

Internal
Strategy: plan to enter the
market, expand, and exit (if
needed)
Investment: initial capital and
return on investment

External
Local environments: Da Nang is
different from existing markets,
being a touristy city
Government relations: not
utilizing the license to operate
will risk future opportunities
Public relations: more cities
improves brand image

1. New market entry

2. New product
3. Grabcars pricing
4. Grabs issues

2. New product
If Grab wants to launch a new product/service in transportation/logistics,
which product/service, what should it be? Use data to backup your
recommendations.

Food delivery is a potential service

Leverage existing infrastructure
Low setup cost
Increase utilization of existing fleet

Strengthen brand name

More service means opportunity to attract new customers
Cooperation with new F&B partners

Stay competitive
Uber launched UberEats in 10 cities in the US, but not in Vietnam
Grabbike considered a competitive advantage given the local context

Lack of local data due to resource constraint

1. New market entry

2. New product
3. Grabcars pricing
4. Grabs issues

3. Grabcars pricing
Is GrabCar's fare well priced? If so, why? If not, how to fix that?

Compare Grabcar and Uber fare in Hanoi

Exclude surge pricing at
peak hours, Grabcars fare
is higher than Uber
However, limited data
points (lacking peak hour,
HCMC data)

Ride 2: 4.5km, 18 min

Ride 1: 6.8km, 25 min

Unit: thousands VND

80
60

Unit: thousands VND

60
40

40
20

46.5

61.2

20

32.9

Uber

Uber

Grab

Unit: thousands VND

80
60

Grab

Ride 1: 5.9km, 25 min

Ride 3: 6.8km, 30 min

Unit: thousands VND

60
40

40
20

40.5

48

61.2

20

42

53.1

Uber

Grab

Uber

In Hanoi, Grabcar fare is higher than Uber

from 23% to 32%
Source: Distance, time, Grabcar fare are actual data. Uber fare is projected using published price as of 4/8/16

Grab

Options include both lowering and raising price

Advantages

Lower price

Increase price

Disadvantages

More competitive
pricing
Attract more customers

Risk of lower revenue

Discourage drivers due
to lower income

Potential upside
revenue, depends on
price sensitivity
Encourage and attract
more drivers

Less competitive pricing

Might turn away
customers

Need further analysis to determine optimal

price

1. New market entry

2. New product
3. Grabcars pricing
4. Grabs issues

4. Grabs issues
Identify top 3 issues of Grab (can be either product, service, or business
model) and your recommendation on how to fix it.

Three issues at Grab (1)

Issue

Recommendation

Legality of service
Grabcar is licensed to operate
in Vietnam, ahead of the game
Still strong resistance from
traditional taxi companies

Work closely with regulators

Deliver a strong product to
stay ahead
Continue working with
traditional taxi companies for
mutual benefits

1. Licensed in Vietnam, but Grab is still facing difficulties in other markets such as Indonesia

Three issues at Grab (2)

Issue
Execution of a certain key
decision
Sudden cut in support
payment lead to a sizable
amount of drivers stop
working
Disrupted the service and
damaged Grabs reputation

Recommendation
Design plan for execution
Especially for decisions that
would adversely affect key
stakeholders
Minimize the effect and
enables a smooth transition
Minimize the service and
public relation risks

1. According to more than one interview with drivers: one day in October, support payment was cut significantly. The lack of support payment
discouraged drivers from working. Support payment was raised again in a short amount of time

Three issues at Grab (3)

Issue
Drivers satisfaction is low
High turnover
Thought no longer profitable
for drivers

Recommendation
Path to increase
Design payment schemes to
retain drivers
Provide fringe benefits
(insurance, recognitions,..)

Need internal data to identify and prioritize

other issues
Source: Interview with drivers