GrabFood eyes analytics, business intelligence for partners as it vies for superapp status
GrabFood head Tomaso Rodriguez details his vision for the food delivery app.
Grab made ripples in the transport space when it announced its acquisition of Uber's Southeast Asia (SEA) operations last year. A notable result: the folding of Uber Eats into GrabFood, boosting the latter's expansion across the region and gaining more market share.
Leading the charge is GrabFood head Tomaso Rodriguez, who previously led Uber EATS' operations in SEA.
In an extensive Q&A with QSR Media, find out how he sees the food delivery app scaling across the region, their philosophy in building customer loyalty, their take on data-driven personalisation, and how GrabFood fits with the company's bid for superapp status.
Tell us more about your background and how you came to Grab.
At Uber, I was General Manager for Italy and Greece before moving to Asia to lead regional operations at UberEATS. In January 2018, I joined Grab as Head of GrabFood, and was tasked with scaling food delivery across Southeast Asia.
Southeast Asia is an incredibly diverse market with each country, city, and province presenting different challenges, and opportunities. Grab was one of the very few players able to adapt and cater to the complexity of the region through building an everyday super app that is hyperlocalised for eight countries, down to the 336 cities we are in today.
In your view, how does GrabFood go about its expansion in the region? To what extent does the Grab brand help?
The Grab brand has become synonymous with Southeast Asia. This, coupled with our unique business model and strong regional presence, have enabled our rapid expansion.
Our everyday super app offers the most essential daily services to consumers, all housed in one app and paid for with a single mobile wallet, GrabPay. Food is one of the top household expenses. By providing food delivery as one of the services in our super app, we’ve unlocked more value for over 144 million Grab users.
We’ve seen strong organic conversion of existing transport users to food. As we introduce more daily essential services into our everyday super app, we strengthen our position as the one app that is in the centre of the consumer experience.
There are a lot of natural synergies between our transport and food business. Driver-partners who provide ride-hailing services on our platform double up as GrabFood delivery-partners. With a ready transport fleet in 336 cities, we can scale GrabFood to new cities extremely quickly. In 2018, we expanded GrabFood from one country and 13 cities in January to six countries and over 200 cities today.
We’re the only food delivery platform that serves all major Southeast Asian markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Across the region, GrabFood’s revenue grew 45 times in the period March 2018 to December 2018.
In a general sense, what are your thoughts on the industry dynamics within the region?
We project food delivery in Southeast Asia to grow over six times, into a US$13b market by 2022. According to a Nielsen report, ASEAN’s middle-class population is set to grow to 400 million individuals by 2030 - roughly the same size as China’s. Many of this new generation of young middle-class consumers are tech-savvy, having grown up in a mobile-first world, and are accustomed to the convenience afforded to them by the instant nature of mobile connectivity.
F&B brands recognise the shift in customer behaviours but struggle to find the best way forward. Some brands have ventured into developing standalone apps for delivery but this an expensive process and many don’t realise the huge hidden costs in customer acquisition.
Partnering a third-party food delivery platform is therefore an easy and cost-efficient way for brands to instantly connect with mobile-first consumers. With over 144 million downloads across Southeast Asia, Grab offers merchant-partners access to one in six Southeast Asians who use multiple Grab services daily, as well as comprehensive insights into the preferences and unmet demands of these users.
What kind of improvements has GrabFood been making tech-wise and operations-wise to serve your restaurant partners and couriers better? What can we expect to see in the coming months?
In 2018, we rolled out over 70 feature improvements to improve app experiences for merchant-partners, delivery-partners and consumers. This year, we’ll be rolling out more features that will enable merchants and delivery-partners to be more efficient and to earn more on GrabFood.
1. Improving productivity of merchant-partners through integrated delivery
Smartphone penetration in SEA is high but digital readiness and understanding differ from businesses to businesses. To cater to this, we offer two operating models to merchant-partners: integrated delivery and concierge delivery. Integrated delivery is twice as efficient than concierge delivery so our goal is to shift all merchants to integrated delivery over time.
Merchants on integrated delivery operate the GrabFood merchant app, which immediately notifies them of incoming orders from consumers. As merchants prepare the order, delivery-partners are already en route to the restaurant. This makes the process more time-efficient for all. In addition, merchants can manage their online listing easily through the GrabFood merchant app.
2. Using data to drive business growth
We want to help merchants harness the trove of data available on our platform to identify demand gaps and optimise menu offerings. We are building and will start to trial merchant analytics dashboards this year to help merchants better analyse overall sales on GrabFood, optimise operations and identify opportunities to design or update their menu to grow their business. The analytics dashboard will be offered as a self-service tool within the GrabFood merchant app.
3. Tech integration for better operational efficiency
Grab has always embraced the concept of “hyper-localisation” in Southeast Asia. On the food delivery front, we understand that merchants have different preferences and we try our best to cater to them.
For example, this year, we’re working with merchant-partners on point-of-Sale (POS) integration for better operational efficiency. This will allow orders placed on consumers’ GrabFood app to be sent directly to the merchant’s own POS system, bypassing the GrabFood merchant app. When orders are updated on merchants’ POS system, it will automatically be reflected on the GrabFood consumer app.
4. Improving productivity for delivery-partners
For our couriers/delivery-partners, we value every hour they choose to spend on our platform and look to find ways to help them improve their productivity. With scale, comes efficiency. We are currently running pilot programs on order-batching. What this means is that our GrabFood delivery-partner algorithm will aim to assign delivery-partners up to two orders from the same restaurant with customers who have delivery addresses within the same short radius (i.e. near one another).
GrabFood is also working closely with our dedicated Mapping Operations team to implement last-mile navigation which will help delivery-partners easily navigate within buildings so they can quickly locate restaurants and pinpoint the designated pick-up spot.
5. Operational enhancements
When it comes to food delivery, getting the fundamentals right is important. Merchant-partners care about the quality of food in each delivery and it is our responsibility to ensure orders are delivered fast. Our delivery fleet is two-times larger than our competitors combined and the Grab app understands local roads and regulations better than mapping providers, allowing us to accurately guide delivery-partners to their pick-up and drop-off points. In Indonesia where traffic comes to a standstill during peak hours, our average delivery time is 29 minutes.
Speedy delivery is only one part of the equation. To ensure food doesn’t degrade over time, we’ve revamped our GrabFood courier bags to cater to each market’s specific needs and preferences. Beverages such as bubble tea and coffee are popular, so our bags are equipped with cup holders and D-rings to avoid spillage and insulated, to maintain the temperature of hot and cold beverages. The bag has to be compact so it doesn’t affect balance on the bike but be roomy enough to accomodate large pizza and doughnut boxes. To navigate this, our courier bag has an extendable compartment, and external hooks that keep bags secured to the bike.
What's GrabFood's philosophy in building long-term customer loyalty?
We believe that quality is the key to building and retaining customer loyalty in the long run. Being able to guarantee customer satisfaction in every order is no mean feat, but it’s how we earn their trust, prompting them to place repeat orders. Our philosophy is based on the following principles:
1. We prioritise merchant quality over quantity
We have a clear merchant acquisition strategy where we focus on working with local favourite brands in every country. We want consumers to know us as the food-delivery service that offers all their favourite food options and with guaranteed freshness and speed - be it familiar hometown flavours or beloved QSR chains from their childhood. It’s not just about having a wide selection of food options, but really finding unique ways to help consumers access their favourite foods more easily.
Last year, we’ve signed over 150 top national and international QSR chains across the region as GrabFood partners, such as McDonald’s, Bonchon, Dominos, Starbucks, Subway, Krispy Kreme, Burger King, Bakmi GM, Long John Silvers, Wendy’s, The Coffee Bean & Tea Leaf, HokBen, and more.
2. We understand that consumer loyalty begins with merchant loyalty
We understand that to become our consumers’ favourite brand, we need to build a robust relationship with merchants to become their preferred partner. We look at ways to value add to their business by harnessing our technology, reach, and hyperlocal know-how to enable them expand their customer base and increase their earnings.
For example, in Vietnam, we provided an experimental testbed for merchants to innovate and trial new menus. We looked at our data to identify popular flavour profiles among Vietnamese consumers and used that insight to design new bubble tea flavours with Gongcha. The new bubble tea flavours are offered exclusively on the GrabFood app, providing a differentiated experience online and in-store.
We noticed that snacking culture is taking off and merchants aren’t maximising these moments. We worked with merchants to promote their snack-time menus, bringing more business to them during non-peak hours.
3. We create the most value for consumers when we bring multiple Grab services together
Consumers use Grab for multiple everyday services - food delivery, transport, groceries, payment and more. Our loyalty programme, GrabRewards, reward users for every dollar they spend on Grab, regardless of which service used.
As one of the most frequently-used apps in Southeast Asia, GrabRewards is an easy and effortless way for consumers to accumulate points for small daily transactions, which can be used to redeem deals from partners and discounts on Grab.
In addition to GrabRewards, we also run regular seasonal campaigns with merchant-partners to keep consumers excited and engaged on our app, by helping them discover the variety of food options and merchants on our platform, and encourage them to try new merchants and services.
We understand that consumers appreciate Grab for the convenience we bring across multiple aspects of their lives so we offer a range of subscription plans that bring greater cost savings for their most frequently-used services. Consumers can choose to subscribe to combination plans for savings on transport and food, or individual transport or food plans, depending on their needs.
Data-driven personalisation is becoming a trend within the aggregator space. Should we expect Grab to also utilise data in this way?
We like to say that we have 336 Grab apps for all 336 cities we’re in. Now we want to go a step further to create hyper-personal and bespoke app experiences for consumers. Already, we have certain features that make our user experience more personalised.
In some countries, we have a special widget on our newsfeed that allows users to re-order their favourite menu items from the same restaurant within a few taps. This feature was developed because we examined our data and found that customers tend to order the exact same menu items multiple times a week. We trained our app algorithm to remember each user’s preferences, giving them a smoother, more seamless experience with every order.
As we offer more everyday services in our super app, we'll build an even richer understanding of Southeast Asia. Picture a future where a car automatically arrives at the same time every Monday to Friday to take you to the office. During lunchtime, a midday thunderstorm causes traffic jams.
Whilst you browse through the app for transport options, a GrabFood notification pops up, suggesting you order in instead, saving 20 minutes of waiting time. And as you approach one of your favourite restaurants on your way home from work, the Grab app notifies you of an ongoing promotion at the restaurant when you order via GrabFood. You place an order and arrive home to find your meal as well as your weekly grocery order delivered to your doorstep.
What areas are you focusing now versus your competition?
We view competition more broadly, because we are seeking to change behaviours and create new, more efficient ways of doing everyday things. That not only broadens the concept of competition but the addressable market, allowing us a bigger playing field.
Merchant enablement is a core component of our long-term growth strategy. As part of our bid to reduce operating costs for merchants, we plan to use our scale and volume to leverage better deals with suppliers.
Packaging is also another focus for us this year. We are working with designers and suppliers to develop cuisine-specific, cost-effective packing solutions, optimised for delivery.
Finally, we also plan to provide professional services such as analytics, business intelligence and marketing services to merchant-partners at preferential rates.
How many delivery companies do you think can be in Southeast Asia? Do you think there is still huge space for growth?
Whilst there are many food delivery companies in the market today, we’ve seen news about potential mergers and acquisitions. It is a matter of time before the industry consolidates.
Southeast Asia is home to Grab and we are invested in this region. Food remains a key pillar of Grab’s one-stop everyday super app. As the only food delivery service that currently serves all six major Southeast Asian markets, we believe we are in a strong position to drive the multi-billion dollar food-delivery market forward. According to the e-Conomy SEA 2018 report by Google and Temasek, online food delivery in Southeast Asia is projected to reach over $8b in market size by 2025.