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Indonesia: Executive column: GrabFood to go ‘full-steam ahead’ armed with kitchens, funds
Grab, the largest ride-hailing platform in Southeast Asia, raised a record US$2.5 billion during its Series G round last year, yet it is continuing with its Series H round, which has raised at least $2.65 billion since it opened in June. The bulk of these funds are to be channeled to the company’s GrabFood delivery arm, which Grab wants to become the market leader across its six regional markets of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. In Indonesia alone, Grab has so far launched its flagship Kitchen by Grab food court in West Jakarta, where top-selling GrabFood merchants can open franchises closer to high-demand neighborhoods, and also partnered with several eateries, such as Maxx Coffee, the Coffee Bean & Tea Leaf and Wendy’s Indonesia. The company is battling it out with local food delivery champions such as Go-Food in Indonesia, FoodPanda in Singapore, and Foody.Vn and Vietnammm in Vietnam. Tomaso Rodriguez, the regional head of GrabFood, talked with The Jakarta Post’s Norman Harsono recently to discuss the company’s food delivery strategy for this year. The following are excerpts from the interview.
Question: How did Grab come to focus on expanding its food delivery service?
Answer: We estimated that the food delivery market will grow from US$3 billion this year to $13 billion by 2022 in Southeast Asia. It’s between a three- and five-times growth.
Grab started a few years ago with transportation to provide consumers with a convenient means of moving around, then moved to payments because there was a big unbanked population in the region and now food delivery has become the third pillar of our growth strategy.
We did a tremendous job building a fleet of drivers and having all this infrastructure helps us go full-steam ahead on food delivery. We launched GrabFood in Jakarta in January last year but now we are in 178 cities in Indonesia and 200 cities across Southeast Asia.
How does your approach differ from competitors?
We want to be very close to the ground. We have teams on the ground to train our merchants and our local employees can even tell us who are the local hero merchants.
We really want to help merchants grow their businesses through the merchant app, which acts as a touch point between Grab and the merchants. In the future, we want this app to be more insightful by telling merchants what are their best selling items, how to tweak prices and how to promote products on the app.
At present, we manually report to the merchants but in the future it will be automated on the app. It will be a very data-driven approach.
What food delivery trends do you see in Indonesia?
We see that the most sold item is martabak (sweet or savory pancake), usually for tea-time and dinner. And another big trend is bubble tea, which is the one popular item that Southeast Asian countries have in common.
How is Grab’s position in its existing markets?
We are leading in Thailand and the Philippines. We are number two in Vietnam and very, very close to number one in Singapore. So we are either number one or number two in all our markets.
But in one year we grew as much as other incumbent players grew in three or more years.
What new improvements can GrabFood customers expect this year?
We want to expand Kitchen by Grab because we have already seen it reduces delivery times by up to 20 percent in West Jakarta and increases merchants’ order contributions.
Thus, in the future, we want to reduce delivery times through Kitchen and more technical fixes such as with our dispatching algorithms.
We now have one Kitchen in Jakarta but we will have several kitchens [around Jakarta] this year. I cannot share the number, but we will go very aggressive on Kitchen because we have seen good traction.
Source: https://www.thejakartapost.com/news/2019/03/10/executive-column-grabfood-to-go-full-steam-ahead-armed-with-kitchens-funds.html