Analysis: Is the Zig app ComfortDelGro's one chance to disrupt Grab's dominance?

Last week, ComfortDelGro officially launched its lifestyle app called Zig. Done in collaboration with digital agency R/GA, ComfortDelgro’s Zig is a mobile lifestyle platform that combines journey planning, transport booking and lifestyle discovery into an all-in-one mobile app.

According to Dorothy Peng, managing director, R/GA Singapore, the agency designed Zig based on “a consumer behaviour-centric approach" and "defined the opportunity areas for the business”. Zig was launched through a mobile app-first platform, and has been built upon "a sustainable business model", said Peng. She also told MARKETING-INTERACTIVE that the app was created after noticing a gap in the market in driving online to offline experiences - which she says, is something its competitor Grab currently doesn’t have.

"Zig is a one-stop city concierge, combining reservations, lifestyle experiences, with the mobility services. What’s interesting, is the ability to compare between taxi, bus and train and the journey planning function," she said, adding that the brand, design and experience used is also very modern and easy to the eye. 

However, given that both apps are birthed from parents in the transport industry, which are now trying to establish themselves as lifestyle brands, there are undeniable similarities between Zig and Grab. For instance, both platforms offer a range of activities such as ride-hailing, booking of entertainment facilities, hotels and attractions, and showcase a food options. As such, the real question is, with Grab obviously solidifying its base of app users in Singapore over the years, are the odds stacked too high against ComfortDelGro in getting consumers to download yet another app?

Industry players MARKETING-INTERACTIVE spoke to believe there is still a strong fighting chance for Zig - although having a well-established competitor such as Grab in the market may make Zig’s entry a tricky one.

“It is important to remember that users tend to show repertoire behaviour in categories such as ride hailing and food delivery,” Ambrish Chaudhry, managing strategy director, Superunion, said. This means that users are not dead-set on using a certain app when it comes to fulfilling their needs. As such,

Zig doesn’t have to become the preferred choice over Grab off the bat; it just needs to convince customers to use it occasionally to build its presence and split the pie.

“One should not underestimate the low entry barriers to try new apps,” Chaudhry said, explaining that it all boils down to whose technology reigns king which is a particularly brutal task. In this case, he is of the view that ComfortDelGro’s entry into the completely new lifestyle scene feels like a well-thought through move.  “The fact that ComfortDelGro hasn’t gone at it alone and leveraged the expertise of Chope and Klook indicates a certain humility and customer centricity which will hold this initiative in good stead,” Chaudhry added.

Home grown advantage?

Chaudhry also said that with ComfortDelgro’s advantage of being familiar with Singaporeans over the years can give consumers the trust towards the brand, as many people would be more open to sharing their financial and credit card details, as compared to an entirely new entrant in the scene, due to the trust factor. As such, one should also not underestimate the influence that ComfortDelGro has in the ride-hailing industry.

Jessalynn Chen, managing director of Labbrand Singapore, seconded the statement and told MARKETING-INTERACTIVE that ComfortDelGro has “insurmountable advantage in its heritage” and also has the home ground advantage of being associated with the familiar “taxi uncle” persona in Singapore. To establish a share of voice in the lifestyle scene with Zig, Chen said ComfortDelgro should leverage on the familiar connection it has with Singaporeans to elevate its service experience. Tapping onto its “taxi uncle” persona, one of the ways ComfortDelGro can bring about a different experience is by becoming Singapore’s go-to “local tour guide”, giving personalistion a modern take. 

With many different competitors in the ride-hailing industry, no one player today can truly claim to be the disruptor in the industry.

It's not about another price war 

Rika Sharma, managing director of Digitas Singapore and ASEAN was of the view that to stand out, ComfortDelGro needs to focus on offering customers a seamless experience to capture the white-space where consumers are looking for “one-stop” solution to booking an entire experience. For example, this means that consumers can purchase the entire night out in the same platform easily and then frictionlessly move within the different offerings, she explained. Without this seamless experience, Sharma isn’t confident that ComfortDelGro will be able to retain customers post-acquisition, as consumers would not be enticed to use the updated offering in the long-term.

“ComfortDelGro needs to understand the customer needs, and offer a distinctive value proposition to Zig. Today there are multiple apps that offer reservations or online ticket purchase. ComfortDelgro needs to either define a distinctive value proposition or offer a better alternative in terms of customer experience or cost to be able to compete with established apps.” Sharma added.

While there are many things that ComfortDelGro can do entice Singaporeans to use its app, industry players agree that value-for-money is something that the brand should look into to acquire new customers. Free trials as giveaways to users in return for richer reviews or promotional offers have proven to work and are a straightforward means of acquiring new consumers. However, freebees cannot be the brand’s core focus, say industry players.

“One could argue that a lot of customers already have Grab and ComfortDelgro downloaded on their phones but use Grab more frequently. In this case, the acquisition strategy could shift to those in search for dining and attractions as an alternative to expand their customer base and a different strategy to drive frequency and win-back usage occasions from Grab platform,” Sharma elaborated.

Adding to the conversation, Alex Zhang, head of strategy, APAC at VCCP said while an initial price incentive can cause consumers to move from their usual apps to try out Zig, long-term growth of the app can only be achieved if Zig is able to create unique features that consumers will not get anywhere else.

“If the current offering is really just ComfortDelGro’s transport serviced coupled with booking services from Klook and Chope, I do not foresee this to be able to achieve long-term organic growth,” he said.

To differentiate itself from Grab or Gojek, Zhang said ComfortDelGro will have to “make bold moves, be more customer-centric, and create strong relevancy” with consumers in Singapore. Although it sounds like a tall order, Zhang thinks it is entirely possible for Zig to compete with the big boys in the industry.

Similar to how Grab disrupted ComfortDelGro in the transport field, Zig is ComfortDelGro’s opportunity to disrupt Grab in the lifestyle apps field.

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