How China’s playbook could guide Grab’s drone gamble

Elyssa Lopez contributed to this story

In June, Grab announced that it was piloting drone deliveries in the Philippines. The move could streamline the delivery process in a market grappling with severe traffic congestion.

Photo credit: Grab

Under the pilot, which was launched in June in the capital Metro Manila, Grab delivery drivers will handle pick-ups and drop-offs from dedicated drone landing stations. This means humans continue to handle the first- and last-mile leg of deliveries.

The costly move would increase order volumes for the platform on the whole, since drivers can complete more jobs in less time. Drones can also expand the reach of merchants beyond their immediate radius and bypass congested roads so consumers obtain their goods faster.

This may be Grab’s inaugural drone test run, but it’s not the region’s first.

In 2020, Foodpanda did a similar trial in Singapore, partnering with ST Engineering to deliver “light food items” over distances of up to 3 kilometers, including orders to ships close to Singapore shores.

The setup was similar to Grab’s current arrangement: Drones moved orders to designated collection points, where one of the company’s riders brought it to the customer’s location.

While Foodpanda said at the time that ST Engineering’s solution could cut delivery times by half, the pilot didn’t expand into a commercial service. Foodpanda and ST Engineering both declined to comment on Tech in Asia’s questions regarding the pilot.

In Southeast Asia, scaling drone delivery beyond controlled trials is difficult due to regulatory hurdles and infrastructure-level limitations, say scholars who have studied drone implementation in China.

For instance, companies need to shell out considerable capital to launch such a service. Drones require a costly network of launchpads, charging stations, and automated kiosks.

In 2021, Meituan, the Chinese food delivery titan, raised US$10 billion in funding. As of 2024, about a third has been spent on developing delivery drones and autonomous vehicles, according to its latest annual report.

Riding on the tailwinds from China?

Grab’s focus on Metro Manila likely means it’ll be adopting a drone delivery model that resembles Meituan’s, which has focused on last-mile deliveries in urban areas.

Grab, after all, is conducting its pilot studies in business districts, which also hold residential buildings and malls.

Sky-high potential

Will drone deliveries in SEA have wings?