Jakarta. At a makeshift kiosk outside her home in a South Jakarta backstreet, 39-year-old Julaiha stands in the frontlines of a multi-billion-dollar battle over one of the richest opportunities in the global digital economy.
Along with goods such as instant noodles and cigarettes, she sells insurance and offers a service to pay utility bills. Though Julaiha has never had a bank account, she can help customers apply for small loans or order products from the internet.
Julaiha last year eagerly became an agent for Singapore-based ride-hailing service Grab. Her husband, a motorcycle-taxi driver, also works for Grab.
"I used to have worked hard in a shop," Julaiha said. "Now I work at home, press the phone, and earn money."
Their recruitment is part of Grab's efforts to muscle in on Indonesia – the home of rival Go-Jek – as the firms vie to bring banking, e-commerce, ride-hailing, food-delivery, and other services to every corner of Southeast Asia.
The goal is to become the indispensable "super-app" for countries with a combined population of over 650 million, with the most fiercely contested front now shifting away from their roots in ride-hailing to financial services.
"The majority of people in Southeast Asia don't have bank accounts," said Jixun Foo, managing partner for GGV Ventures and an early Grab backer. "It's a massive opportunity."
The land-grab has attracted billions in funding from marquee names.
Backers for Grab include SoftBank Group Corp, Microsoft Corp, Toyota Motor and Uber, whose Southeast Asia business it acquired in March. Go-Jek's corner features Google, Tencent Holdings, JD.com and KKR.
The firms' similarities are striking. Both were founded a year apart as ride-service companies: Grab as a taxi-booking app in Malaysia, while Go-Jek organized an informal sector of motorcycle taxis – a key way to get around Jakarta.
With cut-rate prices that made their services accessible in low-income countries, they quickly gained millions of users. Both are even led by friends – Go-Jek chief executive Nadiem Makarim went to Harvard Business School alongside Grab co-founders Anthony Tan and Tan Hooi Ling.
Grab is the bigger regional player, valued at around $11 billion at its last funding round in August, sources with knowledge of the matter have said. Separate sources put Go-Jek's valuation between $9 billion and $10 billion. Each firm is conducting a new funding round, the sources said.
The firms have declined to publicly disclose funding and valuation details.
Two Deals Pave Grab's WayIndonesia accounts for more than a third of Southeast Asia's population and Grab, declaring the market a priority, has been aggressive – acquiring startup Kudo and its network of 1.7 million agents that now includes Julaiha.
It has also partnered with fintech firm OVO, owned by the Lippo Group, whose vast mall holdings have helped make OVO's smartphone payment system a ubiquitous presence at shopping centers and restaurant chains.
With OVO's help, Grab intends to bring a "full range of financial services, including micro-lending, insurance and savings to Indonesia," said Ruben Lai, Grab's managing director of finance.
Grab has also taken an equity stake in OVO, according to a source with direct knowledge of the matter, declining to be identified as the stake has yet to be publicly announced. The companies declined to comment on investment details.
The Kudo and OVO deals have thrust Grab into a position to seize Indonesian market share away from Go-Jek, although the incumbent domestic super-app is currently viewed by analysts as having a significant edge.
Go-Jek boasts 108 million app downloads to date and 50 percent of its users also use its payments service Go-Pay, which it says is the country's most popular e-wallet.
OVO has 60 million downloads, but claims to be Indonesia's leading platform by total payment volume due to the higher amounts paid by wealthier customers at restaurant chains where it is used.
Human EdgeOthers seeking to cash in on Southeast Asia's new digital economy include China's Alibaba, which is making its push in financial services through its Ant Financial affiliate and controls e-commerce site Lazada. Tencent is promoting its WeChat super-app and is also active in e-commerce and gaming.
The region is big enough for many players to have their share. But Go-Jek and Grab are expected to be hard to beat with the familiarity and trust built up by their ride-hailing services and perhaps surprisingly in a digital age, their human agents.
The agents can introduce those with no banking experience – estimated at roughly two-thirds of Indonesia's population – to financial services while also acting as centers for customers to order and pick up their e-commerce purchases.
Like Grab, Go-Jek is a fan of husband-and-wife teams that split the driver and agent roles, and following Grab's lead, it moved to expand its agent network last year with the purchase of startup Mapan. The network consists of 180,000 community leaders who run informal groups that help working-class families buy household appliances and whose clients number about 2 million.
"Housewives told us they had no option for credit and couldn't afford most things," said Aldi Haryopratomo, Mapan's founder and now chief executive of Go-Jek's Go-Pay unit.
Outside Indonesia, Grab has the upper hand. The region's biggest ride-hailing firm serving eight markets, it started on the "super-app" path only last year but quickly built a range of services.
Grab offers smartphone payment "wallets" in partnership with banks or fintech firms in Singapore, Vietnam, Malaysia and the Philippines, while it has one in the works in Thailand. Kudo is also expanding to the Philippines, Vietnam and Singapore.
Go-Jek too is starting to foray into Grab's turf. While it does not have the same number of partnerships, it announced a tie-up this month with DBS Group Holdings, Southeast Asia's largest lender, for financial services. It debuted its app in Vietnam in September and in Singapore this week.