China’s E-Hailing Giant DiDi Files For IPO; Valuation Could Double That Of Grab

China’s largest e-hailing company, Didi Chuxing, has filed to be publicly listed in the US through an IPO (initial public offering) that could be the biggest this year. Indeed, the firm could end up with a valuation that is more than double that of Grab – the Southeast Asian giant that we’re all more familiar with.

Sources previously told Reuters that the IPO could aim for a valuation close to US$100 billion (~RM410.8 billion). And according to a Bloomberg report in April, the company was looking into a valuation of as much as US$70 billion (~RM287.6 billion) to US$100 billion. That would easily beat Alibaba’s US$25 billion (~RM102.7 billion) IPO in 2014 – the largest achieved by a Chinese company listing in the US.

As a comparison, Grab is going public in a SPAC deal worth US$39.6 billion (RM 163.7 billion) – the largest of its kind on record. For more information on what SPACs and IPOs are, you can refer to this piece. Of course, it’s worth mentioning that Didi has a substantially larger pool of potential customers (China, etc.) than Grab (Southeast Asia).

According to Reuters, Didi CEO Cheng Wei said last year that the company wants to have 800 million monthly active users worldwide and complete 100 million orders a day by 2022 – this includes e-hailing, bike and food delivery orders.

Grab, on the other hand, often touts the total population of Southeast Asia (currently 650 million) as its potential customers. As you can see, the difference is pretty staggering.

Grab Singapore To Test Robot That Collects Orders From Different Restaurants In A Mall

Grab Singapore will be trialling a robot runner that goes around collecting orders from different restaurants in a mall. The robot will deposit the orders at a central location for the convenience of human delivery persons, who otherwise must collect each order separately.

The rationale for the robot is apparently driven by the growing popularity of Grab’s mix-and-match feature, which allows customers to order from different restaurants within a mall and pay only a single delivery fee. For delivery persons, this inevitably means longer times going through malls as multiple locations must be visited.

Fortunately, if Grab’s projections are right, the robot could shave off between five to fifteen minutes of this tedious multi-stop journey. Customers would enjoy faster delivery times and delivery persons could potentially fulfil more orders per day.

The robot itself is quite the marvel. Designed in partnership with Techmetics Robotics, it apparently learns about its surroundings through artificial intelligence (AI) and optimises for maximum efficiency.

It comes with built-in Light Detection and Ranging (LIDAR) sensors to detect incoming obstacles, an automated voice message to alert shoppers of its presence, and the ability to scan its immediate proximity in real-time to evade sudden obstacles.

To prevent tampering by passers-by, its food compartment is locked and its combination only given to participating merchants and Grab staff at the collection point.

It all sounds good, but we’ll have to see how it performs in real life. Grab has the same idea – it will trial the robot runner at Paya Lebar Quarter (PLQ) Mall in Singapore for a month, from the second week of June onwards, before considering expanding its use to other locations.

Grab Opens The First GrabKitchen In Malaysia: No More Multiple Delivery Fees For Mixed Orders

Good news for food lovers who wouldn’t mind a bit of variety in their daily meals as Grab has now opened its first GrabKitchen in Malaysia, placing it in Hartamas. To date, the company has established 55 of these so-cloud ‘cloud kitchens’ across Southeast Asia since launching its first one in Jakarta, Indonesia, in 2018.

A GrabKitchen is essentially a centralised kitchen or sharing cooking space (like those coworking spaces that gained popularity before the pandemic) for participating restaurants and food merchants. Consumers pay only a single delivery fee when they “mix and match” orders from GrabKitchen food merchants, and the food merchants themselves get to drastically save costs on facility upkeep.

“Not only is the GrabKitchen concept a unique and cost-efficient model for F&B operators, but they will also have ready access to our merchant support tools, strong delivery network and wide customer base,” said Sean Goh, Managing Director of Grab Malaysia.

The debut GrabKitchen in Hartamas currently features 11 eateries for consumers to mix and match, including Kenny Rogers Roasters, Salad Atelier, Tasty Chapathi, myBurgerLab, and Lim Fried Chicken. You can look for it through the Mix & Match tile under the GrabFood section of the Grab app.

Of course, giving the ongoing pandemic, Grab was quick to emphasise that all merchants and delivery partners are required to scan their MySejahtera app upon entering, have their temperature checked, always have their mask on, and observe the necessary social distancing protocols. The company added that GrabKitchen premises are cleaned and sanitised daily.

In view of the current MCO, GrabKitchen will be available from 10 AM to 10 PM, with last orders to be placed by 9:20 PM (subject to changes to the MCO). Customers can also opt for the ‘self-pick up’ option to waive the delivery fee.

Grab Slashes Fees Charged To Merchant Partners Amid New MCO

Ride-hailing and food delivery company Grab has revealed that it will be slashing the commission fees charged to merchant partners for four weeks. This is among the slew of measures announced by the company on Thursday to help partners and customers cope with the new MCO that took effect this week. Understandably, they are particularly focused on food vendors that have lost their dine-in customers.

Grab said it would be reducing the ceiling for commission fees by up to 5% for all Food and Mart merchants nationwide from 13 January to 10 February 2021. In that same time frame, the company will absorb all costs for self pick-up orders made through the app, and temporarily reduce the commission fee to zero percent if customers choose to collect their orders themselves.

The company also announced that it will be bringing back its ‘Local Heroes’ campaign to provide free visibility, awareness, and promotions across various marketing and digital channels to support neighbourhood businesses, including local food courts, markets, and small business owners. Grab noted that participating merchants in last year’s ‘Grab Loves Local Heroes’ campaign saw a sales increase of up to 43%.

As for the customer side, delivery fees will be reduced to as low as 50 cents for selected nearby Food and Mart merchants. Customers are able to order from different stalls in a food court and still pay a single delivery fee, and until 22 January, can enjoy unlimited free deliveries from their favourite ‘Signature’ restaurants if they use the promo code FREEDEL. Additionally, from 15 January to 17 January, GrabRewards will offering 40% points back for any Food, Mart, or Express vouchers redeemed.

Grab’s Fintech Unit Raises US$300 Million From Investors

Grab Financial Group (GFG), the Fintech arm of the e-hailing and delivery giant, announced that it raised more than US$300 million (~RM 1.21 billion) from investors, including Hanwha Asset Management Co. Ltd., a top South Korean asset management company. The development bolsters Grab’s determined and very public push into financial services across Southeast Asia as the next plank of its growth.

In addition to that, GFG has also said that its total revenues grew by over 40% in 2020 compared to the year before. It attributed this to strong consumer adoption of AutoInvest, its first retail wealth management product which is currently available in Singapore.

The company stated that the monthly users for AutoInvest nearly doubled in December 2020. Additionally, its insurance distribution quadrupled monthly active users in just three months to over 4.5 million.

GFG Senior Managing Director Reuben Lai said, “We are delighted to draw upon the expertise of top investors who know financial services and Fintech well so that we can continue to build and open up access to affordable and transparent financial services for millions of underserved people and small businesses, and make inroads into financial inclusion in the region.”

Relatedly, Grab’s consortium with telco conglomerate SingTel was one of two entities awarded full digital bank licenses in Singapore last December. The consortium intends to formally launch its digital bank in early 2022.

Grab is also eager to set up a digital bank in Malaysia. Last week, Bank Negara Malaysia (BNM) officially opened the application period for digital banks, and so we’ll have to see if that happens.

Grab Revenue Surges Back To Pre-COVID 19 Levels; Grew By 70 Percent In 2020

The new normal might be something that Grab could get used to. On 4 January, the president of the ride-hailing and food delivery service, Ming-Maa, announced in an emailed newsletter that group revenue has surged back to “well over 100% of pre-COVID 19 levels,” according to Vulcan Post.

He noted that total group net revenue grew by about 70% year-on-year in 2020. The firm also slashed its monthly EBITDA (earnings before interest, tax, depreciation and amortisation) expenditure by roughly 80% over the last 12 months.

The numbers, if they are to be believed, are a significant turnaround for a company that was especially hard-hit by the global pandemic. In April last year, Grab CEO Anthony Tan told investors and partners that the pandemic was the “single biggest crisis” in the company’s history, Bloomberg reported.

Take Malaysia as an example – after the MCO (Movement Control Order) was implemented in March last year, Grab country manager Sean Goh said that demand for its ride-hailing business fell by over 90% (see this Focus Malaysia report which cites Goh’s interview by BFM).

But Grab’s attention to its food delivery business has clearly paid dividends. It said its food delivery revenue almost tripled year-on-year in the third quarter of 2020. The company expects it to break even by the end of this year.

Grab’s apparent upswing is likely to amp up industry talk about its rumoured merger with Indonesian rival Gojek. Reuters reported that hours after the above-emailed newsletter was released, Grab and one of its subsidiaries sought a five-year loan of US$750 million (~RM3 billion) for general corporate purposes.