Grab partners Sovico and injects additional $500 million into Vietnam for digital development

By Phuong Anh - Aug 28, 2019 | 02:54 PM GMT+7

TheLEADERThe amount will be spent over the next five years to help the multi-service super app tap opportunities in fintech, mobility solutions and logistics in Vietnam.

Following its strong growth across all services in the first half in Vietnam, Grab Holdings Inc. has announced it will invest $500 million into Vietnam over a period of five years to tap opportunities in fintech, new mobility solutions and logistics, in order to spur development of the country’s digital economy and create millions of income-opportunities that will elevate the quality of life for all Vietnamese.

The investment will be used to launch new services in Vietnam and expand Grab’s transport, food and payments network in the country while looking for new opportunities in new mobility solutions, fintech and the wider logistics industry.

To realise such targets, Grab has partnered Vietnam’s Sovico Group to collaborate on mobility and logistics solutions to solve bottlenecks and improve the first and last-mile delivery networks of Vietnam and Southeast Asia. 

Grab to invest US$500 million more into Vietnam
The MoU signing was witnessed by Nguyen Thien Nhan, member of the Vietnam Politburo, Secretary of Ho Chi Minh City’s Party Committee.

To facilitate the development of Vietnam’s digitised mobility infrastructure in the long term, the two parties will look into opportunities for setting up electric vehicle infrastructure as well as explore and develop integrated digital solutions.

The cooperation with Sovico is a further step of Grab in fulfilling its long term commitment in the country, better benefit customers with more added values, which include, but not limited to mobility, logistics and cashless payment.

Since its entry into Vietnam in 2014, Grab has become the leading super app in the country, having established pole position in food delivery and ride-hailing amongst consumers while Moca, Grab’s strategic partner in payments, is amongst the top leaders in digital payments. Moca’s total payments volume on the Grab app grew 150 per cent in the first half of the year with monthly mobile active users growing more than 70 per cent.

GrabFood, Vietnam’s top food delivery platform, saw gross merchandise value in the first half of the year grow 400 per cent, with average daily orders hitting 300,000. In that period, GrabFood also signed agreements with top-tier restaurants such as Lotteria and others.

In addition, Grab has helped hundreds of thousands of driver-partners better their livelihoods, with accumulated earnings of nearly $1 billion and encouraged millions in the country to adopt cashless payments via a strategic partnership with Moca. GrabFood merchants have also seen their incremental business revenue grow by 300 per cent within 2-3 months joining on the platform.

According to Jerry Lim, country head of Grab Vietnam, by the end of 2019, the company will have invested more than $200 million into the country to better the livelihoods of users and partners of our ride-hailing, food delivery, logistics and cashless payments services.

The additional investment will thus accelerate Grab’s efforts to elevate the quality of life for millions of Vietnamese people beyond the end-users of its super app ecosystem.

“By aligning our business with the government’s socio-economic development plan, we want to make a significant and meaningful contribution to Vietnam’s long-term socio-economic growth, and support the country’s Industry 4.0 ambitions,” said Lim.

“This investment is a reflection of our redoubled commitment to Vietnam,” said Russell Cohen, head of Regional Operations of Grab.

Grab has launched its ‘Tech For Good’ development roadmap, which is aligned to the Socio-Economic Development Plan 2020 of Vietnam that seeks to lifting communities from poverty, empowering future skilled workforce and creating an environmentally sustainable future.

The transport network company will accordingly look to partner with financial institutions to provide financial services to micro-entrepreneurs and small businesses, helping them access credit and insurance products to grow and protect their livelihoods.

It will contribute to Vietnam’s target of having one million highly proficient workers in digital technologies by 2020 by continuing to grow its R&D headcounts in Vietnam and invest in building Vietnamese tech talents that can solve the biggest challenges in Southeast Asia using artificial intelligence, big data, machine learning and more.

Grab will encourage tech entrepreneurship and support the growth of Vietnam’s tech startup ecosystem through its flagship GrabVentures programme, in line with the government’s national strategy to create 10 technology unicorns by 2030.

Grab is also committed to a shared, seamless and smart mobility future for Vietnam, including complementing existing public transportation options and shifting users from private vehicle ownership to shared transport modes such as GrabBus, a marketplace for bus travel that will cater to mass market consumers.

The company will look to establish public-private partnerships with central and city government authorities and contribute to national programmes such as the smart city project initiated by the Ho Chi Minh City government.