With the exponential growth in online grocery delivery propelled even further by the pandemic, sector heavyweights are battling to become the dominant platform of choice for people.
Currently, Alibaba-owned Lazada leads that fight in Southeast Asia, with more than 140 million downloads in the region.
However, that platform is facing increasing competition from other apps, especially Grab. It is the leading ride-hailing service in the region and now has its sights set on the grocery-delivery sector after rolling out GrabMart in 50 cities across Singapore, Indonesia, Malaysia, Vietnam, Thailand, the Philippines, Myanmar and Cambodia in early 2020.
The move follows Grab’s having test-marketed grocery delivery in Singapore and Malaysia during 2019 between October and December.
The company roll-out was well-timed, with the pandemic causing people to travel less and search for food delivery more.
TechInAsia, a Singapore website, said food delivery has provided much needed support for the ride-hailing business. “Grab is banking on grocery delivery becoming a vital part of its business. The company plans to expand food and grocery deliveries to all of the 394 cities where it currently provides ride-hailing services,” a company spokesman said.
“If Grab can cement itself as a reliable player in Southeast Asia’s food and grocery delivery sector, it may be able to claim the lion’s share of the online delivery business.”
Currently, the company is limited to delivery and does not purchase products. Instead, it partners with retail outlets with established distribution channels, to whom orders are relayed. A Grab driver then delivers the prepared orders to the customer.
Although some major supermarkets in the region have their own online supermarket services that could pose competition, Demi Yu, regional head of GrabMart, an on-demand everyday goods delivery service, thinks it can co-exist with other players.
Speaking with Nikkei Asia, she said because Grab provides a different type of service, quick delivery of immediate needs rather than the bulk delivery of items purchased once or twice a week, it can work with the market.
“We think it’s more important to focus on what we do best, which is on-demand delivery to provide quick and convenient transactions,” Demi said. “We can complement other services by satisfying the demands of impulse buyers and last-minute purchasers as a really fast service [so] we can grow the delivery market together,” she said.
Indeed, TechInAsia said Southeast Asia’s mom-and-pop shops, which have fallen behind the digitalisation curve, could increase their sales by using the GrabMart platform.
In Cambodia, company country head Hashim Alkaff said Grab is expanding its services in Cambodia to help people get through the new realities of the pandemic.
“We will use our technology however we can to introduce and scale new services to help everyone in need. This [expansion of services] is also an opportunity for our driver-partners to earn additional income,” he said.
“At a time like this when people need immediate solutions to address mobility gaps during this difficult time, our on-demand services will be there to help.”
According to Research & Markets, the largest market research website, the global online grocery market accounted for $154.69 billion in 2018 and is expected to reach $975.16 billion by 2027, a compound annual growth rate of 22.7 percent.
“Some of the key factors propelling the market growth include increasing penetration of internet services, rising awareness among people, rising disposable income and people’s increasing inclination toward comfort, a shift toward online grocery shopping from traditional shopping methods and the rising number of smartphone users,” it reported.
The study said that, on the basis of geography, Asia-Pacific is predicted as the region with the most significant growth during the forecast period.
“This upsurge is due to initiatives taken by regional governments promoting digitalisation and e-commerce. Moreover, a rapidly growing middle-class population and improvements in internet infrastructure and advancements in logistic networks will help in the market growth in this region,” it added.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
