Through this strategic move, Grab is expanding from its core ride-hailing services into other areas including electronic money transfers, loans, payment services and food delivery. Through GrabFresh, it now serves on-demand grocery deliveries. It is targetting revenues of $1 billion by the end of 2018.
On Tuesday, in a strategic move that banks on its vast network of 7.1 million drivers, merchants and agents, Grab unveiled a grocery delivery service that aims to expand its services beyond its core ride hailing services business, across Southeast Asia.
The strategy to provide its “everyday” offerings vide its new platform is clearly aimed to securing a dominant place in its market. It comes at a time when its peer, Go-Jek, is embarking on a $500 million expansion into key markets such as Singapore and Thailand.
Indonesia-based Go-Jek, Grab’s main competitor in the region, is a ride-hailing firm in that has the backing of private-equity firms Warburg Pincus and KKR. It has expanded its footprint beyond just ride hailing into areas including food delivery, digital payments, on-demand massage and cleaning services.
Grab, is also transforming itself into a consumer tech group, has already begun offering electronic money transfers, loans, payment services and food delivery. Through GrabFresh, it now serves on-demand grocery deliveries.
“We believe that as we offer more localized everyday services, there will be more users and higher engagement across the user base,” said Anthony Tan, Grab’s 36-year-old co-founder and group CEO. “When that happens, it attracts more partners and it’s a virtuous upwards cycle. Great for business”.
He went on to add, “Whether it’s food, whether it’s groceries, we need to make sure that all these are well funded, both technologically and financially”.
In Singapore, Grab’s entry into the gross delivery services will pit it against firms such as RedMart and Amazon.com. RedMart is owned by Alibaba-backed Lazada.
From this month, Grab will also test the launch of GrabFresh in Jakarta; by the end of 2018 it plans on rolling out this service in Malaysia and Thailand. A launch in other countries in the region is expected to follow.
Grab has the backing of the Softbank Group and China’s Didi Chuxing, a ride-hailing firm. In June 2018, Toyota Motor Corp also agreed to pump in $1 billion into it thus valuing it at $10 billion.