ali baba wrote: ↑Sat Sep 30, 2017 2:13 am Cambodia is a small country so it cannot change the rules of the game, it can only play as best it can and tariffs, quotas, capital controls, subsidies and so on are all legit tools that were successfully used by every developed country during their industrial development.

When incompetent and criminal businesses practices are rewarded with no-strings subsidies and bailouts or punished by modest fines that are less onerous than the tax burdens of legit companies, those who refuse to use the same tools on principal have no hope of succeeding.

Are you crazy to quote the HE family mantra?

Uber is losing out to Grab in essentially every county in SE Asia. All of their billions can not outshine the local cultural understanding that the Malaysian Grab brings to their operation. Uber is slow to move and slow to react to cultural expectations of their customers. It took forever before they finally allowed cash transactions on their network.

Uber tries to impose their own vision onto everyone. It is their company culture and their downfall. Grab has successfully thwarted them everywhere in SE Asia by being more adaptable and culturally sensitive.

If Uber plays fair and doesn't throw millions into subsidizing rides in Cambodia, I think it is possible for the Cambodian companies to beat out Uber because they can understand and better serve the Cambodian market. Keep in mind Uber failed miserably in China despite throwing multiple billions at the market. They have learned that they can't necessarily buy their way into markets, and I think their experiences in the rest of SE Asia are going to keep them from being too aggressive here, where the market and prize are relatively small.

Unfortunately, I don't think the Cambodian companies can successfully compete against Grab, who will likely crush them. Grab has hundreds of millions in cash to play with, and no Cambodian app has any obvious cultural advantage against them.

ali baba wrote: ↑Sat Sep 30, 2017 2:13 amIt also allows it to benefit from economies of scale and undercut the pricesof saller start ups leaving consumers with less choice and less competition. To use an analogy- Is it fair to expect a group of 11 year old girls to compete against the Harlem Globe Trotters on a level playing field? Must people would argue that the playing field should be tilted in the 11 y.o.'s favour until they are big and skilled enough to face the Globe Trotters as equals.

My misunderstanding of Ford's history makes it a poor example but I think you see what I'm getting at. When incompetent and criminal businesses practices are rewarded with no-strings subsidies and bailouts or punished by modest fines that are less onerous than the tax burdens of legit companies, those who refuse to use the same tools on principal have no hope of succeeding.

I know what you're getting at, but I respectfully disagree. Your analogy is flawed again. By your logic, Burger King, Dominos and Carl's Jr arrival to the Kingdom should have totally swept the local burger joints and taken everyone else out of business. Costa Coffee should have done the same by undercutting the competition due to their sheer size, assets and revenue... Should the government subsidies or prioritize Cambodian chains such as Lucky or smaller local restaurants? Tell me if I'm wrong, but plenty of smaller places are still operating at a high profit. Kety Perry, Pizza company and tons of smaller pizza joints are still around, while local coffee carts, shops and chains are popping up everywhere... Meanwhile, the horrible ones such as Burger World and Lucky burger have almost gone under. All of this without any subsidies or government protectionism, despite the fact that these big chains have enough money around to undercut the competition.

monomial wrote: ↑Sat Sep 30, 2017 1:23 pm Uber is losing out to Grab in essentially every county in SE Asia. All of their billions can not outshine the local cultural understanding that the Malaysian Grab brings to their operation. Uber is slow to move and slow to react to cultural expectations of their customers. It took forever before they finally allowed cash transactions on their network.

Uber tries to impose their own vision onto everyone. It is their company culture and their downfall. Grab has successfully thwarted them everywhere in SE Asia by being more adaptable and culturally sensitive.

This is exactly what I'm talking about. The behemoth gets eaten at from either the inside or from the side by small businesses capitalizing on a niche market. Uber is currently losing tons of money anyways, so it's not like they can give free rides forever. The same reason Burger King doesn't sell burgers for $1... They know that even with their deep pockets, they can't do it forever and the second they stop, competitors will pop up... Grab isn't Cambodian, but it's a regional player and apparently doing good. Pretty much every country I've ever been to recently has had a successful local variant of Uber that was often more widely used than Uber itself. Though I don't use it, Exnet here is doing fine as far as I can tell. How many people would an app like Exnet or Grab employ locally in Cambodia? I'm guessing not many, or not many more than Uber would. Either way, people who work for big businesses like that often end up starting their own later on.

Bitte_Kein_Lexus wrote: ↑Sun Oct 01, 2017 11:21 am

ali baba wrote: ↑Sat Sep 30, 2017 2:13 amIt also allows it to benefit from economies of scale and undercut the pricesof saller start ups leaving consumers with less choice and less competition. To use an analogy- Is it fair to expect a group of 11 year old girls to compete against the Harlem Globe Trotters on a level playing field? Must people would argue that the playing field should be tilted in the 11 y.o.'s favour until they are big and skilled enough to face the Globe Trotters as equals.

My misunderstanding of Ford's history makes it a poor example but I think you see what I'm getting at. When incompetent and criminal businesses practices are rewarded with no-strings subsidies and bailouts or punished by modest fines that are less onerous than the tax burdens of legit companies, those who refuse to use the same tools on principal have no hope of succeeding.

I know what you're getting at, but I respectfully disagree. Your analogy is flawed again. By your logic, Burger King, Dominos and Carl's Jr arrival to the Kingdom should have totally swept the local burger joints and taken everyone else out of business. Costa Coffee should have done the same by undercutting the competition due to their sheer size, assets and revenue... Should the government subsidies or prioritize Cambodian chains such as Lucky or smaller local restaurants? Tell me if I'm wrong, but plenty of smaller places are still operating at a high profit. Kety Perry, Pizza company and tons of smaller pizza joints are still around, while local coffee carts, shops and chains are popping up everywhere... Meanwhile, the horrible ones such as Burger World and Lucky burger have almost gone under. All of this without any subsidies or government protectionism, despite the fact that these big chains have enough money around to undercut the competition.

There is a critical piece you are missing here though, which is that a brick and mortar store is highly dependent on location, whereas that does not apply to an app.

For example, I would never eat at any other burger joint if I was close enough to go to My Burger Lab on Norodom. But if I'm across town I'm sure not going to go an hour out of my way to eat there. I'll probably eat at Lucky Burger instead, despite that fact that Lucky Burgers taste like cardboard and don't really deserve to be called food. Location is so important in brick and mortar retail, that even a horrible quality store can still outcompete the better one if they happen to be better located.

Apps don't have that built in protection. If you build a better app and people know about it, then the other guy will just get shut out. The online space is so much more competitive than the real world, and it is much easier for a foreign competitor to completely obliterate the local competition.

Not saying protectionism is the answer. The only real solution is to invest in local talent and develop the industry such that you can build a better app than the multinational that is better suited to the local market. Unfortunately, Cambodia doesn't really have a venture capital scene right now to any degree, no government investment at all, and as such it is very unlikely to withstand the online barrage of foreign players coming in to the Kingdom as the economy grows. Somebody from outside will eventually sweep the local competitors away like bad smelling prahok.

I just don't happen to think Uber is that company.

I posted links to the wiki pages about infant industries and import substitution earlier. I don't really feel like getting into it here so people can read up on it there if they're interested.

I don't see the relevance of restaurants here. The infant industry argument is about manufacturing and since you cannot patent an ingredient or copyright a recipe there's very little restaurants can do to suppress competitors and competitors are plentiful because almost everyone learns to cook when they're kids.

In the tech age network effects, economies of scale and the huge quantity of data gathered by incumbents create barriers to entry and exit. I have a facebook page because everyone else is on facebook even though I'm not a fan of the layout or privacy policy.

There is no way to justify stealing from local consumers in order to prop up local producers.

Uber and Grab set to fight for pole position in Cambodia
28 Sept 2017
http://sea-globe.com/uber-grab-cambodia/

jmagic wrote: ↑Sun Oct 01, 2017 2:14 pmThere is no way to justify stealing from local consumers in order to prop up local producers.

Pretty much every gov't in the world provides some subsidies for some industry and pretty much every gov't has some form of sales tax and import tariff. So you're the only person on the world who believes this.

What does it matter who's the biggest or best and if they get subsidies or have more cash?

Try looking at it from the other side. The drivers.

Locals get work or are encouraged to start a business themselves now they have platform(s) to help them, whereas before there wasn't any.

You're all overthinking it.

The only difference here is the lack of existing taxi forms and the reliance on cash which will effect the taxi apps profits, from dodgy drivers.

bangkokhooker wrote: ↑Mon Oct 02, 2017 11:09 am What does it matter who's the biggest or best and if they get subsidies or have more cash?

Try looking at it from the other side. The drivers.

Locals get work or are encouraged to start a business themselves now they have platform(s) to help them, whereas before there wasn't any.

You're all overthinking it.

The only difference here is the lack of existing taxi forms and the reliance on cash which will effect the taxi apps profits, from dodgy drivers.

I agree. Most drivers that I have used so far do not have a preference to a particular app anyway, they use at least two of them and accept whatever comes in.

I think the first app that links up with a local payment platform (such as Pi Pay) will steal a march on the others as the cash is still an issue.

As a consumer, I use the first app that manages to find a ride. With the Uber promotion currently on I will use that, when it finishes I will have no loyalty to them.

Will be interesting to see if any of the apps offer carpooling in Phnom Penh, although I am not too sure how useful it will be. A Bike would make much more sense.