The company launched GrabFood, GrabPay, GrabFinancial and just recently, Grab Ventures.
With the islandwide rollout of GrabFood beta in Singapore, ride-hailing giant Grab is steadily positioning to be Southeast Asia’s go-to app for everyday essential needs in transport, food, delivery and payments sectors.
With thousands of merchant partners including A Poke Theory, Hock Lam Beef Noodles and McDonald’s under its belt, Grab is acting quick to expand its inherited market share from UberEats by luring customers through attractive product offerings and loyalty packages which can be applied across Grab’s wide range of services.
Unlike competitors Deliveroo and Foodpanda where merchants set minimum order sizes, Grab has set no minimum order requirement for GrabFood. Users are also treated to five times GrabRewards points which can be used to redeem Grab’s other services.
On the delivery-partner side, Grab provides same-day cash outs for its drivers as well as on-the-job insurance for all its drivers in the event of an accident.
All this is done as the company is single-mindedly targeting Singapore’s $250m total addressable market for food delivery as well as an estimated 4,000 restaurants and 12,000 hawker stalls that are not yet served on food delivery apps.
“Grab will be keen to cement the position that UberEats already had in the marketplace, and aggressively grow market share if it can,” Jack Ellis, reporter at Tech in Asia told Singapore Business Review. “Competitors will have to match Grab's investment or find alternative strategies to protect their own market share.”
Thanks to its strong logistics and technology network, GrabFood has more than enough reason to be bullish about its entry into the scene especially as it gives another reason for users to leverage its digital payments system, GrabPay.
GrabFood could also offer an opportunity for the company to sell additional insurance and loan products from its GrabFinancial offering, Ellis added, which is another net positive for the ride-hailing giant.
“From the moment you wake up, you can plan and book your entire journey across different transport modes in one tap, shop and receive discounts on-the-go, and have your favourite foods and shopping delivered right to your doorstep – all enabled by one mobile wallet, within one everyday app. This is the future we are building towards and we look forward to working with industry players and governments to innovate and realise this vision together,” Lim Kell Jay, head of Grab Singapore said in a statement following the launch.
However, investors eager to cash in on Grab’s dominance should tread cautiously especially as its services are dependent on a single platform which may ramp up its risk level. This is further underscored as Grab launched its own venture arm, Grab Ventures, which aims to support the growth trajectories of eight to ten startups in the transport, food, logistics and financial services verticals - where it also operates.
“There is always a risk that Grab or other companies may lose focus by launching into various verticals simultaneously,” Reez Nordin, partner at Monk’s Hill Ventures said.
Michelle Kung, executive director of Business Angel Network of Southeast Asia (BANSEA), is less optimistic about Grab’s new foray as it may have spread itself too thin with the launch of its venture unit.
“Grab is still a start-up with high risk profile and high burn rate. By option to create a VC arm, they are not improving their risk profile,” she said. “They should be focusing on building and strengthening their moat. The capital allocated to VC activities should rather be spent on targeted acquisitions.”
However, Grab may not necessarily be gunning for higher revenues, according to Ellis, but may be after something that can prove more useful in the long run as it steadily builds its business empire.
“As with ride-hailing, Grab is unlikely to makes lots of money in the long term from on-demand food delivery itself. But it will be able to collect a treasure trove of user data that can be monetised and leveraged to launch other types of services farther down the line.”
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