Converge What lies ahead in the Future of Mobility for SEA? - Solution Centre - Deloitte
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Converge What lies ahead in the Future of Mobility for SEA? March 2019 Solution Centre
02
Converge - What lies ahead in the Future of Mobility for SEA?
About
Converge
Converge is a series of reports by Deloitte Southeast Asia Innovation that provides insights into the
technology trends and startup ecosystem in Southeast Asia (Footnote 1).
Each report provides a snapshot of the upcoming technology trends in a particular sector and
introduces promising startups that are driving new ideas and taking on challenges that are unique to
Southeast Asia.
This special edition on the topic of Mobility is co-authored together with Deloitte’s Future of Mobility
Global Solution Centre, a Deloitte Global initiative.
Join us in discovering interesting and potentially disruptive startups and initiatives across a myriad of
industries, and feel the pulse of Southeast Asia’s thriving digital revolution!
Who the report is for:
• Corporations exploring innovation capabilities and startup engagement
• Individuals who are keen to understand technology and innovation trends driven by the startup
ecosystem in Southeast Asia
About Deloitte Southeast Asia Innovation
Deloitte Southeast Asia (SEA) Innovation is a cross-function, cross-country innovation unit dedicated
to driving the innovation agenda as a culture and value creator across the region.
About Deloitte Future of Mobility Global Solution Centre
The Deloitte Future of Mobility Global Solution Centre aims to become a globally recognized pioneer
of co-developed analytics & digital mobility solutions to address the rapidly changing mobility
landscape, focusing on customer centricity & emerging technologies.
Have feedback on Converge? Drop us a note at
SEAinnovation@deloitte.com!
Footnote 1
Limitations: While we try our best to ensure that this report is up-to-date and is accurate in the presentation of trends as
of the date of publication, there are some limitations to this report. Some startups choose not to disclose their funding
rounds and/ or funding amounts. As such, the data might not reflect the exact situation.
Sources: This report draws from startup databases such as Tracxn, Crunchbase, and Tech in Asia, e27, as well as reported
data from local, regional and global news sources, and respective company websites.
03
Converge - What lies ahead in the Future of Mobility for SEA?
Urbanisation and the
Challenges of Mobility
Mass mobility issues are often related to urbanisation, which is The sight of skyscrapers remains a common representation of
usually a sign of burgeoning prosperity. In the growing economy of modernisation and prosperity in this region. As cities compete
Southeast Asia, it is common for the city centres to be a bustling to build up, instead of spread out, the solution to congestion
hive of tourist and commercial activity, marrying the old and the issues at these centres resides in public transportation system
new in a smorgasbord of economic opportunities. improvements. Jakarta recently opened Indonesia’s very first mass
rapid transit system in March 2019 to alleviate gridlock in the city
Increasing urban density, however, is a double-edged sword. centre. Ho Chi Minh City and Hanoi in Vietnam are also building up
Beyond the benefits of agglomeration and the network effect, their urban commuter rail systems.
there are challenges like congestion and pollution, which adversely
affect individual health and wellness. The dizzying pace of economic progress and urbanisation has given
both new aspirations and new headaches for city governments to
From scrappy tuk-tuks to private cars to modern commuter deal with. In this report, we will also see corporations and some
subways, commuters looking to get around town in Southeast entrepreneurs stepping to the fore, making use of emerging
Asian cities are often faced with a plethora of options that provide technology trends to create solutions that can alleviate the
no real relief to the congestion and pollution they expect to problems which come with urbanisation.
experience. With Southeast Asia becoming increasingly wealthy
and urbanised (see Figure 1), this is set to get worse with more
vehicles and residents in the urban centres.
Figure 1: Urbanisation Trends for Southeast Asia
Urban Population (% of Total)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Brunei Darussalam Philippines Cambodia Singapore Indonesia Thailand
Lao People's Democratic Republic Timor-Leste Malaysia Viet Nam Myanmar
Source: Urban Population (% of Total), World Bank, 20171
1
https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS
04
Converge - What lies ahead in the Future of Mobility for SEA?
The smartphone changes mobility move across a distance using a shared bicycle, a shared electronic
Eminently, advancements in consumer telecommunications, scooter, or a shared car. The immediacy with which personal
computing and smartphone internet penetration in Southeast demand and mass supply for transportation can now be matched
Asian countries have enabled many app-based solutions to has also transformed the landscape of on-demand mobility
emerge within the last decade. While commuters rejoice at having provision, extending this model to traditionally scheduled and
many transportation options at their fingertips, changes to back- fixed-route systems like public bus services.
end operations and business models, the continuous maintenance
of mass transportation infrastructure, and mindset shifts towards SWAT and Via Transportation, for example, are two companies
the business of providing first-mile last-mile transportation that have developed a dynamic routing and matching algorithm
services, are all required for societies to fully embrace and benefit to enable a fleet of on-demand public bus services (see Table 1).
from the potential of having new technology in our lives. Announced in 2018 by the Singapore government, this new service
is slated to be on trial for six months, and will allow commuters to
A multitude of apps now enable consumers from this region to request for pick-up and to alight at any bus stop within the defined
hail a ride from anything ranging from a car to a motorcycle to a geographical location of the trial2.
3-wheeled vehicle (for example, a tuk-tuk), or for consumers to
2
https://www.lta.gov.sg/apps/news/page.aspx?c=2&id=ba5e1ec1-ace5-4639-ad5c-e5f3fd1c92a8
05
Converge - What lies ahead in the Future of Mobility for SEA?
Table 1 – On-Demand Bus Services
Startup Description Country Year Funding
founded
SWAT SWAT provides shared ride services which uses dynamic Singapore 2016 Seed- S$3M
https://swatmobile.io/ routing algorithm for booking shared rides. The platform uses
algorithms to assign passengers for each ride maintaining
the lowest possible commute time for the passengers. The
platform uses distance-based pricing model.
Via Transportation Via is an on-demand transit system that takes multiple USA 2012 Series C-
https://ridewithvia.com/ passengers heading in the same direction and books them into US$387.1M
a shared vehicle.
Dada Bus Dada Bus is a bus pooling app for shuttle service. It leverages China 2014 Series C –
http://buskeji.com/ big data to smartly match users with routes. Provides services US$59.7M
on 2,000 transportation routes in 30 Chinese cities, catering to
2 million users as of Feb 2016. Has 800+ buses which are run by
100 operators. Aimed at white-collar workers and allows users
to book through wechat and its own app.
Shuttl Shuttl is an app-based bus-pooling service operating in select India 2015 Series B –
https://ride.shuttl.com/ Indian locations, primarily catering to corporate commuters. US$36.6M
Users can book the service by selecting the boarding point and
drop points. The company rolled out inter-city bus services and
rentals in Nov 2016 to make use of unutilized fleet capacity.
*Information and numbers sourced from Crunchbase and company websites
06Converge - What lies ahead in the Future of Mobility for SEA?
Slowly but surely, the onset of
Electric Vehicles in Southeast Asia
to automakers producing plug-in hybrids and electrics
in the country. Meanwhile, in Vietnam, conglomerate
Vingroup has also taken huge steps towards EV
development, targeting to launch their homegrown
electric vehicle in September 2019 with the backing of
about 20 European companies, including BMW4.
In the meantime, in Singapore, the government
has supported BlueSG, a subsidiary of French
conglomerate Bolloré Group, in their pursuit of
implementing a network of 1000 EVs and 500 charging
stations across the island to facilitate their car-sharing
business venture5. Most significantly, Dyson’s decision
to establish manufacturing operations in Singapore for
production of its first electric vehicle, targeted to launch
in 2021, signals great intentions from both parties to
make a big impact on the EV industry in the region6.
Much has been discussed about the battery-charging Would it be more consequential for public or private
infrastructure required around town to make any vehicles to go electric? China’s tech hub Shenzhen
network of Electric Vehicles (EV) feasible as a mode of has blazed the trail by electrifying its entire public bus
transport. Over the years, as the technology of specific network7. Meanwhile, India’s government has recently
components of the EV, like batteries, improve as well, expanded its Faster Adoption and Manufacturing of
governments are finally coming around to embrace and (Hybrid) and Electric Vehicles (Fame II), showing its
lay the groundwork for EVs. renewed support for the industry to deliver on greener
private and public vehicles that can reduce pollution in
In Indonesia, the government has said in January the country8.
2019 that it was open to foreign investment for
the manufacture of EVs, and has decided on fiscal Perhaps, it would be easier to implement electrification
incentives to encourage the sale of EVs locally. Their on public transportation systems, since governments
aim is to have EVs form at least 20% of total domestic can more easily control, monitor, and manage the
vehicle sales by 2025, which translates to about infrastructural development needed for a public
400,000 cars and 2 million motorcycles3. In Thailand, transportation system, which serves a larger volume of
the government has offered generous tax incentives commuter activity, compared to private vehicles.
3
https://www.straitstimes.com/asia/se-asia/indonesia-charging-ahead-with-electric-vehicle-ambitions
4
https://asia.nikkei.com/Business/Business-trends/Japan-carmakers-angle-for-EV-primacy-in-Southeast-Asia
5
https://www.edb.gov.sg/en/our-industries/company-highlights/bollore-global-innovation-centre.html
6
https://www.straitstimes.com/singapore/transport/fan-maker-dyson-to-build-electric-cars-in-singapore
7
https://www.scmp.com/magazines/post-magazine/long-reads/article/2182466/powered-state-china-takes-charge-electric-buses
8
https://www.livemint.com/auto-news/how-fame-2-scheme-aims-to-promote-the-use-of-electric-vehicles-in-india-1552352972259.html
07Converge - What lies ahead in the Future of Mobility for SEA?
Diversification needed
for profitability
Public transportation is an important system to get Singapore’s commuter rail operator SMRT Corporation
right in order for the wider society to function, and has experienced this in the past few years, when
often involves a government hand. Attempts to privatise breakdowns and disruptions have occurred more
and commercialise public transportation provision has frequently than before, prompting the public at large
shown what a poor profit this business brings, however. to voice vehement displeasure10 and question their
competence and business model11.
Asset-heavy and capital-intensive, commercial public
transportation companies have turned to other This phenomenon of business diversification is not just
incidental activities like property rental to boost profits for urban rail operators though. Even amongst disruptive
—to varying levels of success. Hong Kong’s commuter startups in the mobility sector, most notably Go-Jek and
rail service, MTR Corporation, is popularly known to Grab in Southeast Asia (see Table 2), we have seen their
make more money from property development, than the shift from being ride-hailing apps specifically, to being
provision of mass transportation9. the “everyday superapp” for their users12 13, in a model
that takes after China’s WeChat all-in-one umbrella app
Commercial public transportation is a tough business; structure that houses many mini programmes serving a
beyond the expensive infrastructure required of them, variety of their users’ everyday needs.
they have to comply with strict government guidelines
ensuring affordable pricing and have to face the wrath
of angry commuters when systems break down.
9
https://www.scmp.com/news/hong-kong/economy/article/2136403/mtr-corp-announces-64-cent-rise-net-profit-hk168-billion
10
https://www.todayonline.com/singapore/when-it-not-enough-smrt-apologise-breakdowns
11
https://www.asiaone.com/News/AsiaOne+News/Singapore/Story/A1Story20111218-316922.html
12
https://www.grab.com/sg/press/business/grab-unveils-open-platform-strategy-to-build-southeast-asias-first-everyday-superapp/
13
https://www.gojek.io/superapp/
14
https://www.straitstimes.com/business/grab-launches-online-checkout-system-plans-customer-credit-services-and-loans
08Converge - What lies ahead in the Future of Mobility for SEA?
The businesses of Grab and Go-Jek seem to be evolving everyday as they experiment with new services, markets, and pricing models. One
of the biggest push from the app-based startups is in financial services. Grab, for one, has not only created its GrabPay e-wallet system, it
announced at a conference in March 2019 the launch of an online checkout and point-of-sale device integration, a Pay Later plan offering
credit and instalment payment options to worthy customers, and a variety of insurance options for all its different segments of users14.
Table 2 – Becoming the Everyday Superapp in Asia
Startup Year Active Regions Some Notable Funders Funding
Founded
Go-Jek 2010 Singapore, Malaysia, Indonesia, Tencent Holdings, JD.com, Series F – US$3.1B
https://www.go-jek.com Philippines, Google, Temasek Holdings, PT
Vietnam Astra International
Grab 2012 Singapore, Malaysia, Indonesia, SoftBank Vision Fund, Central Series H – US$8.8B
https://www.grab.com Philippines, Vietnam, Cambodia, Group of Company, Yamaha
Myanmar, Thailand Motor, Hyundai Motor, Toyota
Motor, Microsoft
Didi Chuxing 2012 China, Australia, Japan, Mexico, SoftBank Investment Advisors, Corporate Round –
https://didiglobal.com/ Brazil Apple, Tencent Holdings, US$20.6B
Alibaba Group, Ant Financial,
Temasek, Ping An Ventures
Ola 2011 India, Australia, UK, New Hyundai Motor Company, Kia, Corporate Round –
https://www.olacabs.com/ Zealand Tencent Holdings, SoftBank US$3.8B
Group, Didi Chuxing, GIC
*Information and numbers sourced from Crunchbase and company websites
09Converge - What lies ahead in the Future of Mobility for SEA?
Can insurance
providers adapt?
Armed now with the ability to track how users actually their plans to roll out even more financial services
drive and how commuters actually move through the include micro-insurance and an insurance marketplace
various modes of transportation, insurance tech startups through their joint venture with Chinese company Zhong
are emerging to offer personalised quotations and An Insurance.
premium plans based on real usage.
With 6.6 million drivers and agents, over 100 million
An example of usage-based insurance was launched users, delivering over 6 million rides a day across
in 2016, between insurance company AXA and Grab, 8 countries in Southeast Asia, Grab has access to
offering commercial motor insurance for Grab drivers individualised first party data on personal commuting,
based on a “per kilometre driven” basis, instead of the payments and other daily requirements. Would insurers
norm of fixed annual premiums15. Since then, Grab has be similarly enabled by technological advancements and
grown in its ambitions as a financial services provider. new business models to tap on this treasure trove of
Based on Grab’s latest announcements in March 2019, possibilities?
15
https://www.axa.com.sg/latest-news/2016/grab-and-axa-launch-first-usage-based-insurance
10Converge - What lies ahead in the Future of Mobility for SEA?
Importance of fleet management
comes during consolidation
Despite the spectacular exit by Uber from this region in 2018, mobility service startups continue to emerge and hustle
to gain market share. While we have yet to see the enthusiasm for this sector taper off, it is expected that the many
players will eventually consolidate to leave much fewer dominant players, with much larger fleets to manage and
own across the region. This has been the case in Europe (see Figure 2), and we foresee that a similar situation may
emerge in Southeast Asia, with the natural attrition of startups with poorer value propositions, operational experience
and funding.
Figure 2: Europe’s Consolidation of Fleet Management Business
Automotive Service
HLA ARI Daimler Fleet Management
Group
ING Car Lease
LHS LeasePlan FleetLogistics
Fleetlevel Car Professional
22 5
Athlon GE Capital Management
Parcours
ASG TÜV SÜD
Fleet Company
Masterlease
HPI Alphabet
Arval
Players man- Players manage>50%
aged>50% of market ALD Automotive of market share in
share 15 years ago… 2017…
Deutsche Leasing
ALD Automotive Alphabet
Athlon LeasePlan
Arval
In Europe where the fleet management business has become a significant market, multiple cross M&As
have led to the consolidation of the market, and the same could occur in Asia.
Source: Deloitte Analysis
The importance of fleet management will certainly emerge in time to come with dominant players forming. The ability
to optimally coordinate a vast amount of these resources will require a whole new level of management, and will be of
paramount importance as dominant players strive to sustain and win over keen competition.
Moving beyond mobility solutions, fleet management is also starting to become a branch of business on its own.
Startups focusing on telematics and analytics have also emerged, like DRVR from Thailand, and Overdrive in
Singapore. Such startups aim to make fleet operators more efficient with the use of predictive analytics, based off the
data collected on tracked vehicle performance, driver behavior, unscheduled stops and other relevant events. (see
Table 3). Having data analytics to help detect faults within each vehicle or with driver behaviour enables preventive
measures to be taken, improving safety as well.
11Converge - What lies ahead in the Future of Mobility for SEA?
Table 3 – Fleet management analytics startups
Startup Description Country Year Funding
Founded
Overdrive Overdrive is an integrated cloud solution that allows its user Singapore 2015 Series A -
https://overdrive.sg/ to connect a vehicle from his/ her smart device. It helps users US$2.9M
to get instant one-time location of the vehicle, engine cut to
immobilize the vehicle to prevent unauthorized usage with the
wireless relay, blast tracking with 15 minutes real-time location
updates, receive instant notifications from the vehicle and plan
maintenance schedule
Versafleet Versafleet is a cloud-hosted solution for logistics operations. Singapore 2012 Seed –
https://versafleet.co/ Has features for job order management, scheduling, US$3.5M
dispatching, route optimization, with the VersaDrive app for
drivers for up-to-date job details, photos, e-signatures capture,
and updating order status
DRVR DRVR provides fleet management and big data analytics focused Thailand 2015 Seed –
http://www.drvr.co/ on driving behavior to improve fleet efficiency, direct costs, and US$522K
deliver improved customer service.
Katsana Katsana is a data company focusing on usage-based insurance Malaysia 2013 Venture
https://www.katsana.com and connected cars. Its prediction engine tracks driver Round –
behaviour patterns, scoring drivers based on actual risk on the US$1.1M
road, and engages them to become better drivers. Katsana
provides the next generation web-based GPS tracking and fleet
management solution. It employs advanced GPS trackers that
utilize both GPS and GLONASS positioning system
*Information and numbers sourced from Crunchbase and company websites
12Converge - What lies ahead in the Future of Mobility for SEA?
E-logistics take off!
As one of the most engaged, mobile-first internet regions globally, Southeast Asia provides much more business
opportunities to app-based companies than just ride-hailing. The Southeast Asian digital economy, which would
include ride-hailing, ecommerce, and food delivery, is slated to exceed US$240 billion by 2025, from US$72 billion
clocked for 2018.17
The ecommerce segment has been identified as the fastest growing segment of the burgeoning digital economy
of Southeast Asia. It reportedly reached US$23 billion in 2018 and is forecasted to surpass US$100 billion by 2025
(see Figure 3). One of the biggest hurdles to ecommerce in this region, however, is last mile delivery18. Unlike major
markets like USA or China, Southeast Asia is not only fragmented by country borders, it is also physically fragmented.
Indonesia, for instance, is made up of over 17,000 islands, while the Philippines has over 7,500.
Figure 3: SEA E-Commerce Market Size
SEA E-commerce market size (GMV, $B)
34%
102B
62%
114%
23.2B
10.9B
5.5B
2015 2017 2018 2025
E-commerce CAGR
CAGR ‘15-’18 62%
CAGR ‘15-’25 34%
Source: e-Conomy SEA 2018 Southeast Asia’s internet economy hits an inflection point, Google and Temasek (2018)”
17
https://www.thinkwithgoogle.com/intl/en-apac/tools-resources/research-studies/e-conomy-sea-2018-southeast-asias-internet-
economy-hits-inflection-point/
18
https://www.reuters.com/article/lazada-strategy/planes-trains-and-automobiles-lazadas-logistics-battle-to-win-se-asia-idUSL8N1M906S
19
https://www.theguardian.com/global-development/2018/jan/02/rwanda-scheme-saving-blood-drone
13Converge - What lies ahead in the Future of Mobility for SEA?
Table 4 – Logistics Technology Startups
Startup Description Country Year Funding
Founded
Ninja Van Ninja Van provides e-commerce logistics services to Singapore 2014 Series C –
https://www.ninjavan.co/ enterprises companies in SEA countries. Core offering US$117.5M
includes last-mile delivery, drop-off services, and collect
services. It is involved in providing logistics needs of
customers by offering them options of tracking their parcels,
receiving real-time updates and gaining access to alternative
pickup points. Utilizes proprietary technology to automate,
optimize, and streamline the operations.
Skootar Skootar is a web and mobile app that connects users with Thailand 2014 Various –
https://www.skootar.com/ available scooter messengers in the area. Skootar also US$470K
features tracking and rating systems for messengers.
Zoom Zoom provides on demand local delivery services for Malaysia 2016 Seed –
zoomitnow.co/ individuals and businesses, connecting the shipper with MYR4M
a runner, who may can sign up on the platform to provide
delivery services.
Logivan Logivan is an online marketplace for on-demand trucking Vietnam 2017 Venture
https://www.logivan.com/ services. The platform connects shippers with a network of Round –
truck owners/drivers with unutilized capacity and enables US$7.9M
shippers to search and book trucking services. The platform
also offers real-time freight visibility, electronic proof of
delivery and online payments.
*Information and numbers sourced from Crunchbase and company websites
14Converge - What lies ahead in the Future of Mobility for SEA?
The brave new world
requires alliances
The modernisation and growing prosperity of Southeast potential benefits of partnerships and alliances are
Asia is more than just building higher skyscrapers. becoming stronger with this interconnectedness.
Becoming a smart city is also the goal, and there are Partnerships and collaborations are inevitably the way
many ways lives and livelihoods can be improved with forward, to catalyse change within organisations to catch
the interconnectivity made available to us by the Internet up with the rapidly changing environment and demands
of Things. of the consumer. Traditional automaker competitors
Daimler and BMW, for instance, have set up a joint
Mobility is an integral part of a smart city. As can be venture in Berlin to spearhead their combined efforts
seen by the startups that have shaken up the industry, into creating a suite of mobility services for Europe20.
it is clear that mobility is more than just how people Japanese car-manufacturer Toyota is also looking to
move from point A to point B, but also about goods, move into providing mobility services, and has invested
retail commerce and financial services. Underpinning in and partnered up with Grab to provide their fleet with
all of that is the incredible wealth of first-party telematics solutions21.
consumer data smart cities and new-age companies sit
on, changing the ballgame for almost every consumer- Traditional business models cannot carry us into the
facing industry that exists. new world of smart cities and mobility in Southeast Asia.
Instead, it would be of paramount importance to groom
In such a highly interconnected ecosystem, it is almost ecosystems, so that various stakeholders can learn from
impossible for one party to dominate and control, and work with each other. That will be the hope for a
necessitating a mindset change in how companies think congestion-free and pollution-free future of mobility in
about and view their businesses. Business competitors Southeast Asia.
are no longer locked in a zero-sum game, and the
https://www.daimler.com/innovation/case/shared-services/jv-daimler-and-bmw.html
20
https://asia.nikkei.com/Spotlight/Sharing-Economy/Grab-leverages-Toyota-s-telematics-technology-as-competition-heats-up
21
15Converge - What lies ahead in the Future of Mobility for SEA? Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our network of member firms in more than 150 countries and territories serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 286,000 people make an impact that matters at www.deloitte.com. Deloitte Asia Pacific Limited is a company limited by guarantee and a member firm of DTTL. Members of Deloitte Asia Pacific Limited and their related entities provide services in Australia, Brunei Darussalam, Cambodia, East Timor, Federated States of Micronesia, Guam, Indonesia, Japan, Laos, Malaysia, Mongolia, Myanmar, New Zealand, Palau, Papua New Guinea, Singapore, Thailand, The Marshall Islands, The Northern Mariana Islands, The People’s Republic of China (incl. Hong Kong SAR and Macau SAR), The Philippines and Vietnam, in each of which operations are conducted by separate and independent legal entities. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. © 2019 Deloitte & Touche LLP 16
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