HO CHI MINH CITY -- Vietnamese are seeing both Lazada and Grab when they log onto the app for either, thanks to a cross-promotion agreement by the e-commerce and ride-hailing companies in Southeast Asia's fastest-growing market for internet services.
The two companies announced last week that Lazada, Alibaba's Singapore-based subsidiary, now points shoppers to GrabFood delivery and will use GrabExpress to ship products. Grab also refers its app users to Lazada, which has added GrabFood livestream reviews on its app. Both companies are giving out coupons to lure customers from each other's platform.
The deal helps to diversify business lines at Lazada, which trails other e-retailers such as Singapore-based Shopee, Mobile World and Tiki.
Lazada is the fourth-largest e-retailer in Vietnam, with a little more than 20 million monthly visitors, according to iPrice Group data for July to September. The number is lower than a year ago, when Lazada got more than 24 million visitors a month.
It hasn't benefited from the general boost in e-commerce due to the coronavirus pandemic, whereas market leader Shopee increased 81% to 62.7 million visitors a month from July to September. Shopee has more than double the number of visitors to Mobile World and Tiki, the second- and third-largest players.
Grab is backed by Japan's SoftBank, which is also a major shareholder in Lazada's parent, Chinese IT giant Alibaba.
"Consumers can look forward to more combined initiatives from now into the next year," Lazada Vietnam CEO James Dong said in a statement during the announcement last week.
Venture capitalist Vy Le said in an interview with Nikkei Asia that Vietnamese have not been as reliant on digital services as their neighbors, in part because they can go out. The communist country has reported only 1,300 COVID-19 cases and 35 deaths, and ended a national lockdown in April.
Still, the pandemic has changed behavior. Le noted that Vietnamese are Googling topics related to online shopping more than ever. These Google searches rose sixfold from 2016 to 2020, the highest in Southeast Asia, according to this month's e-Conomy SEA report by Google, Temasek and Bain & Co. The report also said that of all Vietnamese who went online this year, a whopping 41% were trying out an internet-based service for the first time.
"I think Vietnam is the most developed market for food tech in the region," said Le, a cofounder of Do Ventures, pointing to delivery providers in the country.
Grab, while still the region's biggest ride-hailing business, has shifted its focus toward payments and delivery as Southeast Asians stay home to avoid COVID-19.
Vietnam's food delivery volumes doubled under the lockdown imposed earlier this year, higher than in the rest of Southeast Asia. Apart from Grab, the sector includes apps for the Indonesian unicorn Gojek, South Korea's Baemin and Vietnam's Now.
Grab recently added grocery deliveries for Thailand's Big C in Vietnam, part of its regional expansion giving customers the ability to order from both supermarkets and convenience stores, a strategy it calls "anything you can eat."
"COVID-19 has also spurred the adoption of digital services in Vietnam and encouraged digital-first consumer behavior," Grab Vietnam Managing Director Thai Hai Van said. "As a result, more and more consumers are now considering virtual choices to fulfill their daily needs."
