SINGAPORE -- Singapore-based Grab is widening its core ride-hailing business to include online groceries and news content, as part of its new open platform strategy to strengthen its presence in a post-Uber Southeast Asia.
On Tuesday it revealed GrabFresh, an on-demand grocery delivery service in partnership with HappyFresh, one of the region's largest grocery delivery providers. According to Grab, which absorbed U.S. rival Uber's regional business this year, the new service meant that fresh and frozen produce could be sent to consumers' doorsteps within an hour, or at a pre-arranged time.
Guillem Segarra, chief executive of HappyFresh, noted that grocery delivery was "a huge opportunity" in Southeast Asia with "70% of grocery delivery app users [shopping] at least once a week."
GrabFresh will first be available as a beta service in Jakarta starting this month, before being rolled out in Thailand and Malaysia by the end of the year. Other countries are expected to be included later.
Grab is also venturing into the provision of news content on its app, launching a content partnership with media group Yahoo. Singaporean, Malaysian and Filipino consumers can already use the service, with plans to launch in other Southeast Asian countries.
Grab intends to broaden its range of partnerships in the future to provide more services, with the launch of its new GrabPlatform signalling a wider strategic shift.
The platform will allow the company's partners to access its technologies including payments, logistics and transport. By integrating Grab's technologies and products into their own apps, partners will be able to provide new services to Grab users.
Grab and its partners will share revenue earned from the platform, with Grab receiving some commission. Although the company declined to reveal how much this would be, the commission is expected to help contribute to Grab's earnings.
"GrabPlatform is all about amplifying the economic value for its users, even more than what we could be for ourselves," said Anthony Tan, group chief executive and co-founder. "Grab expands by partnerships. We believe in growing together with partners," he said, adding that he wanted eventually to make GrabPlatform "open to the wider Southeast Asian system."
GrabFresh and GrabPlatform are part of a strategy to strengthen market share in the region by providing more services beyond ride-hailing. Competition in the segment is fierce, particularly from Grab's Indonesan peer Go-Jek.
"The ride hailing market is already saturated in developed markets like Singapore and Malaysia and there is little potential for growth left," said Walter Edgar Theseira, transport economist at the Singapore University of Social Sciences.
He added that Grab would likely want "to expand to relatively untapped markets."
Grab has been under the scrutiny of watchdogs in several countries since it acquired Uber's Southeast Asian business in late March. In May, the Philippines' antitrust regulator called Grab's Uber acquisition a "virtual monopoly" in the local ride-hailing market. In the same month, Vietnam's ministry of industry and trade launched an in-depth investigation after an initial probe found Grab might breach antitrust laws.
Earlier this month, the Competition and Consumer Commission of Singapore (CCCS) warned that the companies might have to unwind the merger. Grab is challenging CCCS's decision, noting that the watchdog had "taken a very narrow approach in defining competition." It added that it would "take all appropriate steps" to appeal the decision.
DBS analyst Andy Sim noted that the eventual outcome of the ongoing issue remained uncertain. He noted that a strong escalation of competition and a reversion to high incentives "seemed unlikely" after a full cycle of entrants and eventual exits by ride hailing players since 2013. "In view of a relatively small market in Singapore, the business case for new entrants may seem limited vis-a-vis other larger ASEAN markets," he added.