Singapore-headquartered ride-hailing major Grab said it will invest an additional amount of $500 million in Vietnam over the next five years in a bid to ramp up its focus on the country.
Since its foray in Vietnam in 2014 to the end of 2018, Grab has infused as much as $100 million in the country. Going forward, by the end of this year, it plans to pump in more capital in the region as it had earmarked a total investment of $200 million till the end of 2019.
The next chunk of investment, the firm announced, will be used to launch new services and boost its local business in transport, food and payments network in the country.
The ‘super app’ operator is also looking to make investments through Grab Ventures in Vietnam. In 2018 alone, Grab Ventures committed as much as $250 million to Indonesian startups.
Since its inception about five years ago, Grab has become one of the leading multi-service super apps in the country, having established a pole position in food delivery and ride-hailing amongst consumers while Moca, Grab’s strategic partner in payments, is amongst the top leaders in digital payments.
Moca’s total payments volume on the Grab app grew 150 per cent in the first half of the year with monthly mobile active users growing more than 70 per cent, according to a statement issued by the company. GrabFood, Vietnam’s top food delivery platform, saw gross merchandise value in the first half of the year grow 400 percent, with average daily orders hitting 300,000. During the period, GrabFood also signed agreements with top-tier restaurants such as Lotteria and others.
The investment from Grab Ventures in the country’s burgeoning technology sector will encourage entrepreneurship and support the growth of the startup ecosystem, said the company. It’s in fact a part of its larger initiative to carve out a ‘Tech for Good’ development roadmap. The company plans to partner with financial institutions to provide financial services to micro-entrepreneurs and small businesses, spruce up its R&D in the country and invest in building Vietnamese tech talents, besides leveraging technology to create environment-friendly solutions.
These initiatives are aligned with the local government’s focus on creating “key national policy priorities under its socio-economic development plan by 2020″, Grab said.
Going forward, the company will look at launching GrabBus, shifting users from private vehicle ownership to shared transport modes, provide data for urban planning decisions and reduce plastic waste for its food delivery service.
“This investment is a reflection of our redoubled commitment to Vietnam. The country’s rapidly developing economy and young, mobile-first population make it ripe for the adoption of digital services,” said Russell Cohen, the company’s head of regional operations. “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 super app ecosystem,” added Jerry Lim, country head of Grab Vietnam.
Grab’s double-down on investment commitment comes at a time when the Vietnamese ride-hailing market is witnessing increased competition. GoViet, the local arm of Indonesian rival GOJEK, has seen 400 per cent growth since its launch a year ago. BE Group, a Vietnamese company, has also been present in seven different cities and provinces and launched delivery and financial services. In payments, competitors like VNPAY and MoMo have bagged millions of US dollars to fund their expansion.
Meanwhile, Grab has also entered a strategic partnership with Sovico Group, the holding company of Vietnam’s first budget carrier Vietjet, to collaborate on mobility and logistics solutions.
The duo will explore collaboration opportunities in electric vehicle infrastructure as well as integrated digital solutions for mobility, leveraging Grab’s technology platform and Sovico’s expertise in aviation, finance, real estate, and hospitality. Last month, Grab teamed up with VietJet and air delivery startup Swift247 to enhance first to last-mile logistics services in Vietnam.