Jaya Grocer deal a key cog to Grab’s q-commerce ambition

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Hi readers,

I do the groceries in my household. It’s a weekly run that I used to enjoy.

I don’t revel in the process anymore because of a pandemic-induced paranoia toward crowded spaces, made worse by Malaysia’s lax enforcement of prevention measures. Authorities recently uncovered syndicates offering fake Covid-19 vaccination certificates. Yikes.

But my family still needs to eat. So I set a timer and try to complete my grocery run in under 30 minutes, which is still challenging.

But what if the entire process could be simplified? Maybe tap into an app, select groceries, pay, and choose to either get it delivered in less than 30 minutes or pick it up myself if I’m in the area.

That’s what quick commerce (q-commerce) offers, and, with dark stores, it’s become a reality today.

Foodpanda got a head start in the space with its dark stores, or Pandamarts, since 2019 – well before Covid-19 ran riot. It has more than 50 Pandamarts in Malaysia, including in Sabah and Sarawak. It has also partnered with large hypermarket chains and hyperlocal favorites.

But the teething issue – at least in my opinion – is that Foodpanda doesn’t own a grocery store. That’s why Grab’s acquisition of Jaya Grocer, a Malaysian superstore chain, is interesting. Not only is it the ride-hailing giant’s first physical acquisition after its IPO, it’s also a move to capture a vital component of the grocery supply chain.

Jaya Grocer has the expertise in logistics, manpower, sourcing of food stuff, and that makes it easier for Grab to be a dominant player in the space.

That said, Jaya Grocer does not have a presence in East Malaysia. But I doubt this will be a longstanding problem.

Like all acquisitions, challenges and opportunities abound – beyond the usual corporate buzzwords of “catalyst,” “synergy,” and “scale”. The net effect of the Jaya Grocer acquisition is that it boosts Grab’s super-app ambitions.

But here’s what I’m thinking: Paranoid people like me may find themselves in the minority since Malaysia has eased travel restrictions. People will still want to go back to the good ol’ days of physically shopping for groceries, which in turn might hurt the q-commerce blitz.

We have glimpses of that right now. For example, Google’s Covid-19 Community Mobility Report for Malaysia showed that trips made to supermarkets and pharmacies on January 12 were up 21% nationwide from the previous week.

If this trend persists, then q-commerce players will need a hedge. What better moat than a grocery chain where you can enjoy both online and offline purchases? That makes the Jaya Grocer acquisition a pretty good one for Grab, intentional or otherwise.

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