Grab launches grocery delivery service in race for growth

SINGAPORE: Grab unveiled a grocery delivery service on Tuesday, betting the firm´s extensive network of 7.1 million drivers, agents and merchants will help steer the company as it expands beyond its core ride-hailing business across Southeast Asia.

The strategy to provide "everyday" offerings via a new open platform underscores Grab´s ambition to secure its dominant market share at a time when rival Go-Jek is embarking on a $500 million expansion into markets including Thailand and Singapore.

Go-Jek, the main ride-hailing player in Indonesia that is backed by private-equity firms KKR and Warburg Pincus, has expanded into digital payments, food delivery and on-demand cleaning and massage services.

Grab, which is transforming itself into a consumer technology group, already offers loans, electronic money transfers, payments and food delivery. With the launch of GrabFresh, it will now provide on-demand grocery delivery.

"We believe that as we offer more localised everyday services, there will be more users and higher engagement across the user base," Anthony Tan, Grab´s 36-year-old co-founder and group CEO, told Reuters on Monday ahead of the launch.

"When that happens, it attracts more partners and it´s a virtuous upwards cycle. Great for business," said Tan, who scored a big win when Uber handed over its regional operations to Grab this year in return for a stake.

For GrabFresh, Grab said it was partnering with a Southeast Asian grocery delivery provider HappyFresh, part of its new open platform strategy where partners can access parts of its technology such as logistics and payments.

"Whether it´s food, whether it´s groceries, we need to make sure that all these are well funded, both technologically and financially," Tan told Reuters at Grab´s new downtown office in Singapore, where boxes of Apple Macbooks were piled up.

A grocery delivery service could pit Singapore-headquartered Grab against firms such as Amazon.com and RedMart, owned by Alibaba-backed Lazada, which already offer online grocery shopping in the city-state.