Alibaba reportedly in talks to pump US$3 billion into Grab

China-based eCommerce company Alibaba Group is reportedly in discussions to invest US$3 billion (SG$4.1 billion) into Grab. Citing its source, Bloomberg reported that Alibaba is looking to use a portion of the funds to buy over some of the Grab stock held by Uber Technologies. It is added that the deal may represent one of Alibaba’s largest investment on Southeast Asia since Lazada in 2016. 

According to Bloomberg's source, Alibaba's investment in Grab could enable it to gain access to data on "millions of users in eight countries, a growing delivery fleet as well as a stake in digital wallet and financial services". It is added that there is discussion to integrate Grab's delivery network into the Lazada platform, which will enable Singaporean start-ups to gain access to wider network of consumers. Grab has declined to comment. Marketing has reached out to Alibaba for a statement.

According to Alibaba's most recent financial report for the quarter which ended 30 June, the eCommerce company delivered "excellent results". The company saw a revenue of approximately US$21,762 million, which was an increase of 34% year-over-year. 

Meanwhile, Grab has been feeling the impact of the COVID-19 pandemic. Earlier in June, the ride-hailing company had to cut its workforce by about 360, representing 5% of its employees, as well as retiring some non-core projects. The decisions come as Grab looked to consolidate its functions for greater efficiency, and right-sizing teams to better match changing business needs given the external environment. 

According to its founder Anthony Tan, the company tried everything possible to avoid the layoff but had to accept that the “difficult cuts” are required. He added that since February, the company has seen the stark impact of COVID-19 on businesses globally. At the same time, it has become clear that the pandemic will likely result in a prolonged recession and as such the firm will need to prepare for what may be a long recovery period.

However, Grab has been ramping its marketing efforts in Singapore. It has most recently tied up with travel company Klook to launch an "Attractions" segment on the Grab app. Powered by Klook, the “Attractions” segment features various local activities that aims to enable Southeast Asians discover new experiences in their home countries. This comes as movement restrictions ease, and Grab and Klook look to help Southeast Asians explore a new normal of travel, beginning with local exploration and domestic travel in their countries. The activities can be booked through the Grab app, and paid via Grab's payment platform GrabPay.

Over the years, Grab has received investments from companies such as consumer credit company Experian and Hyundai Motor Company and Kia Motors Corporation. The investments by the two companies in particular were to help Grab improve access to mobility-enabled solutions and financial services for underbanked consumers in Southeast Asia, as well as to pilot electric vehicle programmes across the region respectively. Last year, Grab invested US$2 billion into Indonesia to boost the country's digital infrastructure using funds from SoftBank. The move came after SoftBank, which invested US$1.46 billion in Grab last July, aims to grow its presence in Indonesia.

Meanwhile, Alibaba made headlines in 2016 when it invested in Lazada. Subsequently in 2016 and 2017, Alibaba pumped in additional US$1 billion and US$2 billion respectively. Other companies Alibaba owns includes Youku Tudou and South China Morning Post.

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