Asian super-apps clear regulatory road – for now

Grab's CEO Anthony Tan gives a speech before the Grab Bell Ringing Ceremony at a hotel in Singapore
Grab's CEO Anthony Tan gives a speech before the Grab Bell Ringing Ceremony at a hotel in Singapore, December 2, 2021. REUTERS/Caroline Chia

LONDON, Dec 14 (Reuters Breakingviews) - Southeast Asia’s super-apps are cruising in an express lane – for now. By helping take care of a big part of everyday mobile needs for consumers, they’re keeping governments in the region sweet. It’s a sharp contrast to the regulatory slowdowns confronting Big Tech in the United States, China and beyond.

Take GoTo and newly listed read more Grab . These all-in-one providers of ride-hailing, grocery delivery, payments and more are growing rapidly in a part of the world home to 650 million people coming online through their smartphones. Customers are happy to have multiple services offered seamlessly through a single app.

For states, these companies are helping drive read more digital adoption, ushering small- and medium-sized businesses online, and bringing finance to the masses. It’s nation building of sorts. During the pandemic, Grab used its digital wallet in Malaysia to help distribute support directly to users, a mechanism that avoids cash being pocketed by greedy middlemen, a common problem for benefit schemes in emerging markets.

There have been periodic obstacles. An idea to combine Singapore-based Grab and its Jakarta peer Gojek was dropped partly because of trustbuster concerns. Gojek subsequently merged with e-commerce outfit Tokopedia to form GoTo, Grab’s top regional rival. In 2018, Singapore also fined Grab and Uber (UBER.N) for uniting their ride-hailing units in a deal that hurt competition.

GoTo’s plan to go public in Jakarta before adding a New York listing will further appease officials who want some of the benefits from their homegrown startups to accrue to domestic capital markets. Such steps should help avoid the sort of pain being experienced by China’s Didi Global (DIDI.N), which fell foul of Beijing and recently unveiled plans to delist just months after its U.S. market debut.

It is also telling that Grab Chief Executive and co-founder Anthony Tan is leaving the door open to his company’s shares trading in Southeast Asia. In the short-term, though, GoTo’s decision to soon start public life in a market unaccustomed to money-losing tech stocks could hurt its valuation. That’s a potentially pricey toll to pay, but it may help clear the regulatory road for a while longer.

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- Singapore-based Grab is leaving open the future possibility of selling its shares in Southeast Asia, Chief Executive and co-founder Anthony Tan said at an interview broadcast on Dec. 1 as part of Reuters Next, a global virtual conference.

- “We see opportunities,” Tan said when asked whether the company would consider a local listing after its debut in New York. “It’s not either-or”.

Editing by Jeffrey Goldfarb and Thomas Shum

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Una Galani is Associate Editor of Reuters Breakingviews, based in Mumbai. She covers a cross-section of business, finance, and politics in South Asia. Una was in Hong Kong from 2013 and previously spent three years in Dubai writing about Middle Eastern economies during the Arab Spring. She joined Breakingviews in 2006 in London. In 2016, she won Asia Pacific Best Editorial Comment at the State Street Press Awards and Reuters global analysis/commentary of the year. She read English Literature at St Catherine’s College, Oxford.