Thailand
Thailand: Grab unit upbeat on potential for growth
Grab Thailand is optimistic with regard to its operating profit this year given the business direction of its parent, Nasdaq-listed Grab Holding, which aims to break even.
The local unit plans to focus on sustainable growth thanks to the recovery of its core businesses, especially ride-hailing, with daily service usage slightly surpassing levels posted before the pandemic.
Tourists using Grab’s ride-hailing services last year increased 152% from 2021 after the country’s reopening.
The company’s delivery services are gaining in popularity as users become more familiar with on-demand food and grocery delivery. Growth of the GrabFood service was three times higher upcountry than in Bangkok last year.
According to Worachat Luxkanalode, country head of Grab Thailand, the company has a strategic priority to build sustainable growth in 2023 by implementing two key strategies based on its super app and operational efficiency.
The strategies will focus on synergising and bringing in innovation and technology to improve efficiency across its businesses, comprising mobility, deliveries, financial services, and enterprise.
Grab is a leading super app in Southeast Asia operating within the deliveries, mobility, and digital financial services sectors, while serving over 500 cities in eight countries. Currently, there are 32.7 million active users per month in total using the app in those countries.
Grab Holding reported monthly transaction users increased 16% in 2022 year-on-year, revenue gained 112% and the annual loss improved by 51%.
In Thailand, Grab’s mobility business slightly surpassed pre-Covid levels. The company has benefited from a travel boom, with a strong rebound in airport rides, up 33% in the final quarter of 2022 year-on-year.
“Following the easing of the pandemic, we continue to have a positive outlook and significant business growth,” Mr Worachat said.
He said the company’s mobility service obtained an operator licence from the Department of Land Transport last year under the Ride-Hailing Act.
The company’s delivery business is still growing. Despite a decrease in the rate of Covid infections, consumer behaviour has changed as people have become more familiar with on-demand food and grocery delivery services.
According to Google and Temasek, food delivery demand has returned to trendline growth. The compound annual growth rate (CAGR) of food delivery in Southeast Asia region was copy7 billion in 2022 or a 14% growth from the level seen in 2021. The CAGR in 2025 is projected to be $24 billion, up 13% from 2022.
Grab Thailand’s delivery sales volume in 2022 grew 15% year-on-year. Its GrabFood average basket sizes in 2022 grew 18% from 2019 while average basket sizes of GrabMart in 2022 grew 28% compared to those in 2020.
Mr Worachat said Grab Thailand has also launched new products under its financial services. For example, it offers electric vehicle (EV) loans for driver-partners to earn income and has also developed the PayLater by Grab service to provide alternative financial management for its users.
Through the company’s four core businesses, GrabFood posts an operating loss but it will post a better performance through the firm’s key strategies of power of super app and operational efficiency, he said.
Grab Thailand has outlined a plan to operate core business through innovation. In terms of its mobility service, the company will operate a tourist focus by promoting local events and tourist attractions and a trusted service with an increase in its safety standards and reliability.
In terms of its delivery service, the company aims to help reduce the driver wait time in receiving ordered products by 30% year-on-year by its implementing technology and management systems such as mapping and waiting time estimation to enhance accuracy and minimise the delivery time.
Mr Worachat said Grab financial services support driver-partners and merchant-partners by offering loans for merchant-partners of up to 500,000 baht to provide financial support for business expansion and to enable cash flow.
Grab has also expanded new financial products for driver-partners, including loans for product installments such as gold, electrical appliances, and motorcycles, as well as insurance products for the ride-hailing service to provide assurance for both driver-partners and passengers.
Source: https://www.bangkokpost.com/business/2524444/grab-unit-upbeat-on-potential-for-growth