Grab looks to grow profits with affordable products

Photo credit: Grab

Grab revealed that the group achieved adjusted EBITDA profitability for the third quarter of 2023, the first time it has ever done so. Now, the Singapore-based firm’s focus lies on further growing its businesses while maintaining this profitability.

Anthony Tan, group CEO and co-founder of Grab, said during the company’s latest earnings call that there are still “abundant opportunities” to serve more Southeast Asians.

One way it looks to capitalize on these opportunities is by making its services more affordable.

In deliveries, it rolled out the Saver feature, which gives users the option to pay lower delivery fees in exchange for longer delivery times. The feature also lets Grab’s drivers fulfill several orders in a single trip, which helps increase their earnings.

Alex Hungate, Grab’s COO, said in the earnings call that Saver is responsible for a third of the company’s gross merchandise value (GMV) from its deliveries arm. He estimates that a third of the segment’s monthly transacting users (MTUs) have availed the service.

Grab grew its deliveries GMV for the quarter to US$2.6 billion, while the segment’s adjusted earnings increased about 10x to US$88 million.

The firm has been rumored to be one of the possible names that would acquire some of the Southeast Asian businesses of food delivery rival Foodpanda. While Hungate did not comment on the potential deal, he said that Grab does not “operate for M&A.”

“I would say that our main focus is on continuing to double down on [the company’s] scale advantage so that we increase value for consumers, drivers, and merchants on our platform,” he added.

Hungate also pointed out that Grab has been making its services more affordable without relying on higher incentives. For Q3 2023, incentives as a percentage of GMV improved to 7.1% from 9.4% in the same year-ago quarter.

Beyond food deliveries, Grab has also made efforts to make services in other verticals more affordable. For its mobility segment, Hungate highlighted the company’s relaunch of Move It in the Philippines. The feature, which lets users book a two-wheel ride, gives users a cheaper ride-hailing option.

The exec said that Move It helped fuel 18% and 28% quarter-on-quarter increases in mobility MTUs and transactions, respectively, in the country.

See also: Grab’s financial health in 11 charts