In response to what it considers a surging market, the ride-hailing giant has announced plans to invest heavily into its Vietnamese business.
Earlier today, the company announced plans to invest US$500 million over the next five years to expand transport, food and payment services. Russell Cohen, head of Grab’s regional operations, told Reuters: "The country’s rapidly developing economy and emerging middle-class population makes it ripe for the adoption of digital services."
Cohen also claimed the influx of cash will allow the company to compete in an increasingly competitive market by offering deeper discounts, even if it means operating at short-term losses. Analysts believe the funds will be taken from its significant haul of investments.
Wednesday's announcement comes on the heels of the Singapore-based startups' plans to invest US$2 billion into their Indonesian endeavors. Acknowledging the previous pledge, Grab president Ming Maa said at a press conference earlier this week: "We’re very excited about Vietnam. We see very similar characteristics to Indonesia."
Currently, Grab offers vehicle rides and hotel bookings, as well as food deliveries, which constitute 20% of the company's entire gross merchandise value in Vietnam. It recently partnered with a Vietnamese tech company to create an e-wallet and is working with a Japanese credit card company to provide loans and credit analysis throughout Southeast Asia.
Vietnam is currently the company's third- or fourth-largest market, according to Maa. Between January and June it was the most downloaded ride-sharing app in the country. It is estimated to be on 160 million devices across eight Southeast Asian nations with 4.5 million drivers. The company hopes to double its revenue this year to US$2 billion.
