Grab doubles down on grocery delivery, hires Carrefour China veteran to lead biz

Grab has appointed Hardy Cao as its new head of supermarkets. He was formerly VP of Gome Retail Group at Gome Retail Group China. Cao is a retail industry veteran with over two decades of experience and was previously COO at Hema Network technology and was with Carrefour China for over 17 years, his latest role as president of Carrefour China South Territory and VP, Carrefour China.

The appointment comes as Grab plans to double down on grocery delivery after Euromonitor forecasted that online penetration for grocery delivery to more than double between 2020 and 2025. According to Grab's financial report for the fourth quarter and the year 2021, a partnership is already underway with Jaya Grocer, which it acquired in January this year, to make on-demand groceries more accessible to Malaysian consumers. All Jaya Grocer stores will also adopt GrabPay and GrabRewards.

Grab recorded a gross merchandise value (GMV) of SG$8.5 billion for the year 2021 in the deliveries segment, a 56% increase YoY. Additionally, deliveries GMV in the fourth quarter grew 52% YoY, hitting a record high of SG$2.4 billion. However, while its revenue for 2021 saw an SG$5 million increase to SG$148 million, revenue for the fourth quarter declined 98% YoY to SG$1 million as Grab invested in incentives to maintain its category leadership and to grow adoption of new services. 

Overall however, Grab Holdings reported losses. According to the company it spent more on promotions and incentives to lure drivers and customers. Its fourth-quarter net loss reached to US$1.1 billion from US$635 million. Meanwhile, revenue for the quarter also fell 44% per cent to US$122 million, which according to the firm, was due to incentives offered to users and drivers.

Meanwhile, in the mobility segment, Grab recorded a GMV of SG$2.8 billion for the year 2021, a 14% decline YoY. GMV in the fourth quarter grew 45% QoQ to SG$765 million, albeit an 11% decline YoY, which it said "comes on the back of a strong recovery in ride-hailing demand as countries continue to cautiously reopen".  

Grab also said in its financial report that it grew its category share for food delivery in 2021 compared to 2020, while driving greater efficiencies from incentive investment. For instance, Grab estimates that its GMV to cost ratios across markets such as Indonesia, Malaysia, Thailand and Vietnam are 25% to almost 100% more efficient than its competitor averages, on a per order basis. Its deliveries commission rate for 2021 was 18.2%, an increase from 16.6% in 2020, while average order values for deliveries increased by 41% in 2021, compared to pre-pandemic levels (2019). 

At the same time, Grab's deliveries segment adjusted EBITDA was SG$84 million for the fourth quarter last year, while its segment adjusted EBITDA for that year was SG$130 million, a 1.5% margin as a percentage of GMV, an improvement from (3.9%) in 2020.

Grab also said in its report that it plans to forge multi-vertical partnerships across payments, rewards, deliveries and ads with leading global brands.

In the fourth quarter last year, Grab announced an expanded partnership with McDonald’s in Singapore. It will also partner with Starbucks across multiple verticals to enhance the Starbucks Experience for customers in Southeast Asia.

Separately, co-founder, Anthony Tan reportedly hit billionaire status for a few hours in December last year, after the company’s listing on Nasdaq before its stock slipped. According to Bloomberg, Grab rose in pre-market trading in New York and opened at US$13.06. However, approximately US$17 billion was eliminated from Grab's market value when its shares dropped more than 21% to US$8.61 on the first day. Tan’s stake, which was initially worth over US$1 billion, is now worth US$725 million, Bloomberg said. 

Grab will go public via a merger with special purpose acquisition company Altimeter Growth Corp, raising about US$4.5 billion in cash and valuing Grab's shares at US$39.6 billion. According to Grab, this is expected to be the largest-ever US equity offering by a Southeast Asian company. Pursuant to the proposed transactions, Altimeter Growth and Grab will become wholly-owned subsidiaries of a new holding company.

More recently, Grab appointed Sean Tan as head of merchant at Grab Financial Group Singapore. In his new role, Tan, formerly general manager at hoolah and, prior to that, COO at Chope, reports to Wenbin Wong, head of Grab Financial Group, Singapore. Tan told MARKETING-INTERACTIVE then that he will be working with his team to expand Grab Financial's new and existing merchant partnerships with Grab’s integrated solutions. He will also work on expanding its innovative payment solutions, GrabPay and PayLater, to cater to more consumers both online and offline. “There has never been a better time to be in payments - the payments market is growing rapidly, and consumer adoption is also accelerating," Tan added.

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