Grab sets out growth plans
Street food, small eateries in focus
Food delivery and ride-hailing company Grab has vowed to focus more on working with small restaurants, expanding its adult user base, providing loans for drivers and eateries, and driving customer subscriptions as part of its strategy to pursue sustainable growth.
Thailand's online food delivery market is expected to hit 79 billion baht in 2022, up 4.5% year-on-year, according to Kasikorn Research Center, compared with the total food vendor market's 400-billion-baht value.
The Thai food delivery market's sales grew 5% year-on-year in the first quarter.
"Thailand's online food delivery market will continue to grow this year but in slower mode, unlike 2020 when the pandemic-induced lockdown was imposed, while consumer spending is shrinking due to economic concerns," said Chantsuda Thananitayaudom, country marketing and partnership head of Grab Thailand.
She said Grab will increasingly expand its reach to small restaurants and street food vendors to offer a greater variety of food with affordable prices, particularly in second-tier cities.
People are familiar with food delivery as they enjoy the convenience of a "lazy economy", said Ms Chantsuda.
She said small eateries account for 50% of Grab's food merchant partners, which differs from 3-4 years ago when it started with quick-service restaurants that targeted more premium and mass users.
Grab is also seeking a partnership with Michelin to bring Michelin-star restaurants onto its platform.
The company will continue to pursue its GrabAcademy campaign to upskill restaurant partners, particularly small merchants, in the marketing and financial realms.
Worachat Luxkanalode, Thailand country head of Grab Financial Group, said that many small restaurants had closed down in 2021 due to liquidity problems. Grab has offered loans of up to 100,000 baht to small food merchants, and tens of thousands of them have participated in the campaign.
Grab also provides loans for driver partners with repayment by instalment, he said. The company plans to offer loans for electric vehicles (EVs) for them soon.
"This is part of our sustainability project, and the use of EVs can help address the surging fuel prices," Mr Worachat said.
He expressed concerns about the government's move to reduce the diesel subsidy, saying it could massively affect driver partners who rely on a diesel-powered motorcycle.
"Food delivery platforms would be affected by surging fuel prices as we hardly increase food delivery service prices because it affects users and restaurants," Mr Worachat said.
According to Ms Chantsuda, this month Grab is providing a fuel subsidy worth 8 million baht for driver partners.
She said intense competition in the online food delivery market is expected to continue as Thailand has five major players, compared to other Asean peers which mostly have just three.
Grab aims to increase the user base of those aged over 35, as its main user age group is currently 25-35.
"We will focus more on sustainable growth through diversified services, such as transportation, which shows signs of a rebound, food, mart and express delivery, while also promoting customer subscriptions to boost user stickiness," said Ms Chantsuda.