Grab pushes ahead with $500 million expansion plan in Vietnam
11:29 | 29/08/2019 Print Article
Grab will invest $500 million more over five years to tap into opportunities in fintech, new mobility solutions, and logistics. The investment follows strong growth in the first half in Vietnam in transport, food delivery, and payments. Jerry Lim, country head of Grab Vietnam, talks with VIR’s Thanh Van about Grab’s next investment in Vietnam.
|Jerry Lim, country head of Grab Vietnam |
Grab is one of the largest tech investors in Vietnam. How do you feel about the achievements of Grab in the country?
We have grown so much in Vietnam thanks to the support of the people and the government. We will continue to address the needs of customers. I think the only reason why people and partners support us is because we are solving their problems. We are creating more benefits for them. Moving forward, we will continue to improve and understand more the needs of Vietnamese consumers and the requirements of the government to bring the best services to Vietnam.
By the end of 2019, we will have invested more than $200 million into the country to better the livelihoods of users and partners of our ride-hailing, food delivery, logistics, and cashless payments services. Today’s investment of $500 million will accelerate our efforts to elevate the quality of life for millions of Vietnamese people beyond the end-users of our superapp ecosystem. By aligning our business with the government’s socio-economic development plan, we want to make a significant and meaningful contribution to Vietnam’s long-term socio-economic growth, and support the country’s Industry 4.0 ambitions.
Why has Grab decided to invest in Vietnam at this time?
The reason we decided to invest in Vietnam is that the country has a very high growth trajectory in Southeast Asia. For example, Singapore is a very mature market so we do not see many areas to grow or opportunities for disruption. Vietnam has a young population and high smartphone penetration rate. The country also has a huge appetite for new services. Therefore, we believe there will be a lot of opportunities for investment in the country.
At the same time, we think that the government is pushing innovation and is as open to try new concepts and ideas. The recent signing of Decision 999 by Prime Minister Nguyen Xuan Phuc shows that the government is willing to promote the sandbox model. It means companies and organisations are encouraged to innovate new ideas within the sandbox so as to promote the sharing economy.
As part of our superapp strategy, ride-hailing is just one part of our business. We really want to touch the lives of consumers in every single way on a day-to-day basis. Beside ride-hailing, we also entered into food delivery, logistic, and e-payment. Over time, we make investment a multipurpose super app by delivering different kinds of services. Going forward, we will look for opportunities to branch into other potential fields such as healthcare, grocery, travel and hospitality, and entertainment.
How do you see the readiness of the Vietnamese market for new technology?
Indeed, the Vietnamese market is now ripe for innovation and disruption. One of the factors is the country’s young population who are willing to try new products and services. Vietnam also has a high smartphone penetration with more than 90 per cent of young people owning one or even more smartphones. Thus, it is very adaptable to new solutions to meet the needs of users.
What we’ve seen is that there are a lot of startups and entrepreneurs coming up in Vietnam. At the same time, there are a lot of venture capital funds coming in to help the startups to bring their ideas and innovation into the market. With a view to drive the opportunity, Grab will support local startups to align their solutions with our platform. As a regional company, Grab will help mentor these startups and give them funding to scale up their presence in Vietnam and across Southeast Asia.
In recent years, we have seen the government pushing forward innovation. They are talking about how to set up smart city initiatives, how to invest in new startups, and how to establish incubation centres in Ho Chi Minh City, Hanoi, and other localities. The government has worked with local businesses to drive innovation in Vietnam. All of these factors make Vietnam a favourable destination for tech startups and businesses like Grab.
|Since its entry to Vietnam in 2014, Grab has become the leading multi-service superapp in the country, having taken the pole position in food delivery and ride-hailing amongst consumers while Moca, Grab’s strategic partner in payments, is amongst the leaders in digital payments. Moca’s total payments volume on the Grab app grew by 150 per cent in the first half of the year with monthly active mobile users growing by more than 70 per cent. GrabFood, Vietnam’s top food delivery platform, saw gross merchandise value in the first half of the year grow by 400 per cent, with average daily orders hitting 300,000. In this period, GrabFood also signed agreements with top-tier restaurants such as Lotteria and others. |
Thanh Van from Singapore