What's Next For Grab?

Shall we GrabFood? Wanna GrabHitch? Can I pay for this via GrabPay?

We’ve been so used to Grab’s services in our daily lives now and with its vast international exposure across 8 countries in Asia, Grab will only continue to grow as Southeast Asia’s tech giant. They are augmenting towards being Southeast Asia’s version of Jack Ma’s ANT Group, by serving various industries, largely the financial services.

Source: Unsplash

Business Model

Grab first started out as a company that focused on providing ride-hailing services back in 2012. Since then, they have grown to dominate the market by providing competitive prices and even acquired their competitors such as Uber in 2018 to benefit both their drivers and customers, with their platform helping to match drivers, with rented or owned cars, to people looking for a ride. Drivers benefit from Grab as they do not have to actively search for passengers on the road while customers get to benefit from Grab’s competence to provide transparency about the driver such as ratings and reviews, in addition to fares allocated in advanced prior to the booking of a ride. With Grab offering several riding options that ranges from instant booking (i.e Just Grab)__to advanced booking (i.e GrabHitch), customers have the flexibility to personalise their ride options tailored to their needs.

Read more about Grab’s comparison with Taxi fares here.

Grab always focused on working towards maintaining and improving their customer services and experiences. With Grab’s acquisition of Uber, they have come up on top in the ride-hailing service sector and have since expanded into consumer service sectors such as food and groceries delivery services (GrabFood) as well as financial services (what we would know as GrabPay and GrabInvest). This is a consistent push towards their mission of being “Your Everyday Everything App”, or more commonly known as a Super App model in Southeast Asia.

Source: NNA Business News

F&B Sector

GrabFood has done significantly well especially this year during the circuit breaker when all of us were forced to stay indoors, and F&B stores were forced to temporarily close their physical stores. Singaporeans turned to GrabFood for its wide variety of cuisines, promos and deals while businesses were able to have a platform to still carry on their operations. Grab can be expected to reach out to more F&B vendors in the future.

Source: Mashable SEA

Financial Services and Full Bank License

GrabPay served the backbone of Grab’s other services as it helped customers to facilitate payments for Grab rides, in-store purchases, food deliveries and fund transfers. It has expanded to offer “Pay Later”, a post-paid and installment payment service in Singapore. This service allows customers to pay for Grab services at the end of the month without bearing an additional cost. This option can cater to customers of different financial needs and preferences.

With Grab recent acquisition of the digital full bank license as part of an alliance with Singtel, they will be allowed to function much like our everyday banks – DBS and OCBC. Banking services can be done online without the need to head down to a physical branch. You can read more about their bank license here.

Grab’s CEO expressed how the digital banking license will further Grab’s goal to “empower more people to gain better control of their money and achieve better economic outcomes for themselves, their businesses and families” on top of their aim to build Singapore’s next generation of digital banking. They are expected to commence operations in early 2022, so we can expect to see both traditional and new financial services in the market integrated into Grab’s mobile app as well. Read more about Grab’s new app offering here.

This license will be a good stepping stone to enhance Grab’s GrabInvest (AutoInvest) offering and potentially be a key investment tool to consumer’s personal financial goals. Currently, GrabInvest seems to act more like a _cash management account although it does promote itself as an investment tool. It would be interesting to see how Grab evolves this feature to be a common household name like its other offerings. Learn more about GrabInvest here.

Social Initiatives

Consumers and investors will be pleased to know that Grab has actively worked on various social impact programmes. Their “Grab for Good” programme aims to empower people in the Southeast Asian region to be integrated into our fast-growing digital economy. Grab hopes to provide ample opportunities for people by improving digital inclusion and digital literacy, empowering micro-entrepreneurships and small businesses to tap on the use of technology, and building a future-ready workforce by training students to be more tech-savvy and acquiring in-demand skills.

It’s good to see Grab go the extra mile to build an inclusive platform that aims to make a positive sustainable impact as they rise to become a superior Super App in Southeast Asia.

Source: CNBC

Future Opportunities

What can we expect from Grab in the next 5 years?

With Grab’s acquisition of Uber back in 2018, they are expected to go public by 2023 as part of their agreement with Uber. This is definitely one of the companies that we should be eyeing as it grows exponentially along with its strong fundamentals and management. With COVID hitting businesses hard, Grab proved that it had enough liquidity to tide through the tough times and continued to rise with a well-diversified business model, from providing ride-hailing services to food delivery and now financial services.

Furthermore, speculation about Grab’s potential merger with Gojek raises some complications and questions as to whether Grab should be a sole monopoly in the ride hailing services (apart from our comfortdelgro taxis). This would mean that Grab is increasingly becoming a tech giant, much like ANT Group with its diversification across the investment and insurance sector.

With its possible public listing on the way, Grab will be the biggest IPO in Singapore Stock Exchange in over 20 years. They are definitely going to be the talk of the town in the local investment scene. Grab’s addition to SGX can also mean a push for a change in the STI index to be more tech-dominated and be made up of companies that are comparative to those in the US S&P 500 in terms of industries.

Closing Thoughts

Grab’s business model and expertise in the innovation and technology sector is a refreshing addition to the Singapore investment market as compared to the traditional companies that are listed on SGX. Personally, I believe that Grab will be a huge success in the stock market and its promising to see that they are moving towards being more ethical and sustainable in the future.