Kak Rose, the owner of a small restaurant in Malaysia faced a critical disruption to her 25-year-old business, in the wake of the Movement Control Order (MCO). While still open for takeaways, she faced slumping sales.
She signed up on Grab to become part of its E-Kitchen Bazaar. There was a learning curve to contend with. But soon she had shifted to cashless payments and was serving a wider range of customers, clocking an over 50 per cent increase in sales. She is now contemplating moving part of her business online, permanently.
Similar stories can be found across Southeast Asia. Small and medium enterprises (SMEs) are rapidly taking to digitalisation – creating an online presence and business model for firms that had traditionally operated offline.
For instance, Toko Sembako Yenny, a family owned and run Jakarta-based store selling food supplies since 2004, similarly faced declining sales when COVID-19 struck. Undeterred, the store used GrabExpress to service its orders and doubled its business due to a wider reach.
These are just a few success stories that can be traced back to the Grab for Good goals announced last year: digital literacy and greater inclusion to 3 million Southeast Asians by 2025. An additional goal was to digitalise 5 million traditional businesses and merchants.
COVID-19 has dialled up the urgency for Grab to push forward on these goals, according to Russell Cohen, Group MD – Operations. He said, “We need to figure out how technology and new ways of doing business can inclusively support everyone. In a sense, we’ve fast-forwarded into the future.”
SMEs make up over 95 per cent of all businesses and account for over half of total employment in Southeast Asia. But only 34 per cent of them had any online presence. The slack pace of adoption was in part due to a consumer base who saw no reason to change age-old habits. Even SMEs that were already online needed more help – 76 per cent wanted to increase online visibility. Tools to drive innovations and provide insights was an ask for another 56 per cent, according to internal research from Grab.
According to a survey from Google, 32 per cent of Indonesians said that they hadn’t made a purchase on any e-commerce platform before the pandemic. New buyers accounted for 24 per cent of all online shoppers during Singapore’s lockdown.
In response, Grab has opted for a multi-pronged “whole of society” approach to accelerate its digitalisation efforts, working simultaneously with SMEs, consumers and government agencies across all major Southeast Asian countries.
Partnering with the SMEs
One of Grab’s new launches was the Small Business Booster Programme – a suite of tools aimed at helping with the offline to online transition. Those already on Grab could use it to expand customer visibility via an additional sales channel online. The Homegrown Heroes initiative saw $3.5 million worth of personalised ads created for approximately 6,000 SMEs in 28 cities, across 8 countries, slotted into prominent spaces within the app.
Grab also launched GrabMerchant, an all-in-one platform that included a self-onboarding feature to help food businesses get up and running in 24 hours. SMEs who desired a more layered view of their consumer got an enterprise-grade insights tool to closely examine sales, purchasing habits and marketing. Cohen said, “It allows them to respond to new opportunities such as creating bundled meals based on what customers are ordering and helps address operational inefficiencies.”
Launched via a pilot in Singapore in October 2019, the delivery of daily essentials via GrabMart was scaled to eight Southeast Asian countries in three months, opening up an avenue for many more types of businesses to come online through the Grab platform – pharmacies, florists, wet markets and hawkers.
Through it all, Grab accounted for the diversity between countries and markets thanks to its hyperlocal approach. Cohen said, “We put boots on the ground, hiring people who understand the local landscape and its challenges.”
The geographic spread also meant that Grab could learn from relevant best practices, across the region. Cohen added, “We know many traditional, offline businesses have never considered going online before. It’s a new experience for them, but also requires us to adapt our business models.”
Partnering with governments
These programmes rolled out swiftly, since several government agencies in the region had already identified digitalisation as a priority.
In Singapore, Grow Digital was launched under the aegis of the SMEs Go Digital programme and unveiled in June this year. It aims to connect SMEs to B2B and B2C e-commerce platforms with a regional or global reach. More than 1,400 enterprises were using these platforms, per a note from the IMDA.
The digital resilience bonus was introduced in the Fortitude Budget to raise the capabilities of a broad range of enterprises. Those in food and retail stood to receive a one-time cash pay-out of $10,000 when they adopted solutions to improve productivity and competitiveness.
In Singapore, Grab launched ‘Hawker Centre 2.0’, a pilot to bring hawkers – an integral part of the city state’s food culture – online on GrabFood. In Thailand, Grab worked with the Ministry of Agriculture and Cooperatives to help farmers from three provinces market surplus fruits like mango, lychee, mangosteen and banana through GrabMart.
Similar initiatives were rolled out in Indonesia and the Philippines as well. Grab partnered with the Ministry of Agriculture and Pasar Mitra Tani – a state-owned grocery store in Indonesia that sources directly from farmers. Customers could order via GrabAssistant and have produce delivered to their homes – a scheme that shortened the distribution chain and helped farmers. In the Philippines, Grab partnered with the Department of Agriculture for the ‘Kadiwa ni Ani at Kita’ program. Customers could purchase fresh produce and meat from the department’s eKadiwa website and have these delivered by GrabExpress.
In Malaysia, Grab piloted an initiative with the Ministry of Rural Development (KPLB) via eLokal’s DesaMall programme, to help 5,000 rural entrepreneurs digitalise their business. It also partnered with the government of Selangor to create a virtual version of Bazaar Ramadan, a pop-up market timed around Hari Raya. Via Bazaar Ramadan, micro-entrepreneurs were able to reach their audience by tying into a range of services such as GrabPay for cashless transactions, GrabFood and GrabExpress. Cohen said, “COVID-19 has in many ways been the impetus governments need to accelerate innovation.”
Why go digital on Grab?
With a wide range of companies hard at work driving digitalisation, including tech giants like Facebook and Google, Grab had an edge in part because of its clout as a homegrown Southeast Asian company – present in 351 cities and with over 187 million app downloads. Besides, Cohen said, “We offer small business access to one of the widest consumer bases in the region, paired with Southeast Asia’s largest fleet of delivery partners to help them move products efficiently and reliably.”
Moving the dial on digitalisation
Between February and April alone, Grab has seen over 100,000 small businesses move online. Cohen said, “Our small merchant restaurant partners reported a 21 per cent increase in online revenue during Covid-19. We’re also very encouraged to hear stories of traditional businesses who faced extinction during the movement restrictions but doubled their revenues after coming onboard the Grab platform. It’s a new business model for both of us. We are willing to experiment with new solutions, fail and try again. This is an ongoing process.”
This is particularly relevant since at least some of the post-pandemic changes are expected to be permanent. 74 per cent of first-time online buyers during the lockdown in Singapore will continue making online purchases post-lockdown, per a Google survey.
Cohen too expects permanent shifts in consumer behaviour. Barriers to digitalisation like perceived costs, lack of skilled personnel and a faith in existing offline operating models have been demolished. Cohen said, “By digitalising, these businesses can continue to grow revenue opportunities, stay competitive and enhance their resilience.”