The 6-billion-baht investment by Central Group in Grab Thailand is aimed at fulfilling the diversification of Grab into retail financial services and boosting revenue opportunities in on-demand food delivery and transport via disruptive technology.
In the deal officially announced on Thursday, Central Group's CEO declined to specify the amount of the "sizeable" acquisition of "minority non-controlling" shares in Grab Thailand, a wholly owned local unit of Singapore-based Grab Inc.
Moving away from its core ride-hailing business, Grab has been seeking an e-wallet and micro lending licence from the Bank of Thailand, as well as embarking on ventures which build on its technological base.
The partnership with Central is giving a major boost to Grab Thailand, which faces legal challenges to its ride-hailing service.
Central Group is a multinational retail, property and hospitality conglomerate with a presence in Thailand, Vietnam, Italy, Denmark, German, Indonesia and soon in Malaysia. Sales exceed 350 billion baht a year.
Central Group chief executive Tos Chirathivat said Grab is a fast-growing online-to-offline platform that has scaled up impressively in Southeast Asia.
"Like Central Group, Grab is now an essential part of everyday life for many Thai people," Mr Tos said. "We look forward to revolutionising the retail and service industry. We will collaborate across the areas of transport, food and grocery delivery, logistics and more, to deliver more value to Central and Grab's customers, partners, merchants and tenants."
Central Group president Yol Phokasub said the alliance is part of the group's annual investment of 40-50 billion baht this year. Initial areas of collaboration include food delivery, bringing on board Central Group restaurants and food-related brands to Grab Food.
Previously, business units under Central Group have used Grab services, but the new alliance will help expand the reach of these outlets and offer Grab customers a greater variety of food, snack and drink options.
For logistics, Grab will provide on-demand and express delivery services for Central Group businesses and partners through the Grab Express service. In terms of transport, customers, visitors and tourists can easily travel to and from Central Group malls, stores and hotels via Grab services with special privileges.
According to Anthony Tan, chief executive and co-founder of Grab, Thailand is an important market for Grab, with over 800 employees locally and serving over a quarter of a million microentrepreneurs, including drivers and merchants.
In Southeast Asia, Grab has over 8.5 million microentrepreneurs, more than 2,000 engineers and seven R&D centres. Grab has expanded from ride hailing to food delivery, grocery and electronic payment, becoming a "super app".
Grab is also entering the online travel business by partnering with Agoda and Booking.com, from flight bookings to hotels to activities during travel, all connected seamlessly. It will use its ride-hailing service for Central properties -- hotels, resorts and department stores -- to offer special privileges.
Tarin Thaniyavarn, country head of Grab Thailand, said the company in 2018 reached 100,000 rides a day locally and 3 million meal deliveries on the year.
"We will bring more selective food from Central, Tops Supermarket, snacks and groceries to our users and bring a seamless experience to tourists and local customers," Mr Tarin said.
The collaboration with Central will impact the local economy, increasing ride traffic for its driver partners and choices for customers. With Grab covering 16 provinces and Central in 76, Grab will expand food delivery outside Bangkok.
