Updated: Dec 29, 2021
Late last week, Grab made its big play to enter the supermarket and grocery space.
With this surprisingly sudden move, Malaysia’s premium supermarket player – Jaya Grocer Holdings, will soon be under the management of Grab Holdings Ltd (Grab) as revealed in a short US Securities and Exchange Commission (SEC) filing. According to The Edge Malaysia, the regional ride-hailing player signed on an estimated acquisition deal that is worth US$425 million (up to RM1.8 billion).
This comes just a few weeks after Jaya Grocer founders – the Teng family – bought back the entire stake from Singapore-based private equity firm, AIGF Advisors. Multiple news reports confirmed that the Teng family spent around RM411 million (estimated US$98 million) to take back full ownership of Jaya Grocer.
Grab’s latest acquisition is its largest since it moved to buy up Indonesian-based payment services player, OVO, in early-2021.
By purchasing Jaya Grocer and, as per filing – making it a full subsidiary of Grab, it makes the grocery journey a full-circle for the original taxi-hailing upstart as it is now just over two years since the launch of GrabSupermarket in Malaysia. Notably, Jaya Grocer had been one of the platform’s primary partners. As it takes in this well-recognised Malaysian grocery brand and its 40 stores, Grab is poised to make strategic plays that will likely expand its presence in digital retail and eCommerce sectors. While some parties view this as an interesting last move to close of 2021, it does fit into the plans that Grab has in mind for scaling-up its grocery delivery service across Southeast Asia.
To-date, GrabMart counts over 12,000 retail stores as its partners across Southeast Asia. In fact, when it launched GrabSupermarket in Singapore with HAO earlier this year, Grab confirmed its plans to expand deeper into this resurging sector. This includes housing the GrabSupermarket ‘dark store’ within select HAO Marts – this effectively converts them into grocery and goods distribution centres for Grab.
“Over time, we aspire to broaden the selection available even further and offer more essential items as well as premium and exclusive products from our GrabMart merchant-partners,” shared Xinwei Ngiam, Managing Director, Deliveries, Grab Singapore during that launch.
This comment and ongoing talks between Grab and its merchant partners have already fuelled backroom talks that the newly minted public-listed super-app is looking to acquire a big supermarket brand. The sudden announcement to gobble up Jaya Grocer last week confirms this notion.
At press time, Grab and Jaya Grocer have not shared any official comments beyond the SEC filing and official responses to queries from the Malaysian business news titles, the acquisition had already set the disruptive potential tone for next year.
Questions that come to mind:
Will it power-up and scale the existing and still fast-growing GrabMart and GrabSupermarket offerings in all eight Southeast Asian cities they are operating in?
What is the bigger play here for Grab and all the countries it operates in?
What and where will be the next grocery acquisition – the Philippines, Vietnam, Indonesia, or Singapore?
How will this investment play a role in Grab’s ongoing pursuit of being the first super-app in Southeast Asia and, by extension, the Asia Pacific?
Why should other potential super-apps – AirAsia, GoTo, and Bukalapak – be concerned? More importantly, should they follow suit?
While this feels like Grab’s way of rounding off an eventful 2021, it also creates the impression that there will be more to come next year. It’s not hard to imagine that it can likely be an even bigger push into the mobile wallet and eCommerce segments.