Grab GrabSupermarket
Image credit: Grab

Grab makes major e-grocery move with first ‘dark store’ as merger talks continue

December 3, 2020

Southeast Asian ride-hailing, payments, and delivery app Grab has made a major e-commerce move with the opening of its first ‘dark store’ in the region, enabling it to sell groceries directly to its users.

Named GrabSupermarket, the store is “strategically located” in Malaysia’s Klang Valley area, near to the capital Kuala Lumpur, according to a statement from the Singapore-based company.

The service has more than 2,500 products on offer, including freshly-sourced produce from local farmers, and delivers fee-free to customers the day after they place their orders.

“The next-day delivery model enables us to ensure the produce is delivered from our variety of partnering farms and suppliers directly to us, and from us to the customers, all within 24 hours,” Sean Goh, managing director of Grab Malaysia, said in the statement.

During a pilot conducted over the past three weeks, fresh produce including fruits, vegetables, and poultry accounted for almost 50% of GrabSupermarket orders, Goh added.

“Our ambition is to be able to offer the widest selection of groceries at the best prices, maximum freshness, and zero delivery fees to every Malaysian household. In addition, we hope that GrabSupermarket will create even more income opportunities for all our drivers,” he said.

Grab said it plans to open further GrabSupermarket facilities in other parts of Malaysia.

Like typical supermarkets, ‘dark stores’ stock a variable range of fresh produce, non-perishable groceries, and other household goods. The key difference is that — like their ‘dark kitchen’ namesakes — they are designed to handle collections and deliveries only; shoppers never set foot inside.

As a result, ‘dark stores’ are often located in places that wouldn’t be optimal for conventional supermarkets, but are better for delivery vehicles to access and egress – and to ensure efficient same-day and next-day fulfillment of customer orders.

With consumers less willing and able to leave their homes, the Covid-19 crisis has accelerated the growth of e-grocery and food delivery services that deliver to their doorsteps. Overall, the trend towards doing our regular grocery shop online looks set to continue, even after Covid-19 is brought under control. Forty percent of consumers surveyed by market research firm Kantar recently said they had “significantly” shifted to online grocery shopping since the pandemic began; that figure increased to 48% among ‘Millennials’ and families with younger children.

This change in behavior is leading to a strategic shift for traditional brick-and-mortar supermarkets and online grocers alike – the former to become more like the latter, while the latter needs to keep up with an unprecedented spike in demand. For many players in the space, ‘dark stores’ are part of their new strategies.

GrabSupermarket isn’t Grab’s first foray into groceries. The self-anointed ‘super app’ — which started out as a ride-hailing service in 2012 before expanding into restaurant delivery, financial services, and other verticals — already has a feature in several countries called GrabMart which allows users to order staples, snacks, and pharmacy items from third-party convenience stores.

In Indonesia, Grab partnered with Jakarta-based e-grocer HelloFresh in 2018 to launch GrabFresh, a more exhaustive e-grocery offering enabling users to order hundreds of thousands of items — including fresh and frozen produce — from dozens of supermarket chains.

GrabSupermarket appears to be the first time that Grab itself is stocking up on products, holding its own inventory, and delivering direct to consumers – marking a significant strategic step for the company as it seeks to become more involved in the food e-commerce space.

Meanwhile, merger talks between Grab and Jakarta-based archrival Gojek have continued to gather pace. Bloomberg reported yesterday that the two sides have “narrowed their differences of opinion” with “final details [being] worked out among the most senior leaders of each company with the participation of [SoftBank CEO] Masayoshi Son, a major Grab investor.”

Rumors that Gojek and Grab had begun to discuss a combination in earnest began to emerge late last year, after the Indonesian company’s founding CEO Nadiem Makarim stepped down to take up a cabinet role. Big-name investors in both apps — including SoftBank, Google, Tencent, Temasek, and Toyota, to name just a few — are said to have pressured the two fierce competitors to come to terms. However, disagreement over the makeup of the resultant entity have slowed negotiations; Grab has reportedly offered Gojek a 30% stake in the business, though Gojek expects more to account for its dominant position in its home market.

If the two apps merge, they’d likely become Southeast Asia’s largest privately held tech company, with a combined valuation of around $24 billion according to some estimates.


Got a news tip? Email me at jack@agfunder.com or find me on Twitter at @jacknwellis

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