Thematic Report

The disrupted strike back

by Shaun Cochran / Feb 4, 2019


The push by app-based platforms to gain a lead in Asia’s growing payments market shows the global relevance of digital transactions as a secular threat to the expensive, incumbent models. While ride-sharers have cottoned on to this opportunity, new competition from last mile delivery robots threatens Uber’s goal to dominate deliveries next. Finally, Kroger’s strategy of selling digital ‘retail-as-a-service’ combined with Darkstore’s January fund raise supports our view that Amazon will increasingly face credible competition to dominate ecommerce.

Digital payments continue to differentiate
There is growing evidence app platforms are prioritising integrated, native digital payments which is a material long-term threat to expensive credit card models. Indian ride-sharer Ola’s strategy of letting 15 million users accumulate rides and settle in arrears monthly, while offering new risks, boasts an exciting 90% customer repeat rate. Whatsapp is similarly eyeing a bigger slice of India’s burgeoning payment market, however, regulators are tapping the brakes over data concern.

Ride-sharers face multi-faceted competition
The network of establishing extensive driver and rider networks early that facilitated Uber’s dominance is becoming less relevant forcing it to seek diversification. As such, Uber is touting massive deliveries going into its planned IPO. However, the emergence of last-mile autonomous delivery robots from Amazon, Continental AG and others indicate this sector will also see a wave of new competition.’s expansion of airborne drone deliveries in Indonesia suggests Uber will not just face city-by-city competition on the roads, but in the skies.

Kroger and Microsoft team up for data-driven grocery stores
Microsoft’s and Kroger’s expanded partnership demonstrates that industry incumbents are awake to the fact that omni-channel is key to customer convenience and retention. They have now expanded the partnership to build a data-driven smart retail experience targeting sufficient sophistication to ultimately sell as a ‘retail-as-a-service’ offering. Amazon’s future market expansions goals will face far greater retaliatory action.

The growing importance of digital enablers
To that end, the breadth of digital enabler vendors that offer traditional retailers a means to transform their customer experience has never been deeper. For example, US startup, Darkstore, is accelerating innovation by offering retailers order fulfilment and same-day delivery to reach new customers in areas they lack a physical presence. Such innovations underwrite this new more competitive era.

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