Aiming for first-ever profit, Grab Thailand shifts focus from growth
Grab Thailand released its strategy for 2023, saying it will help the company achieve its first-ever profit this year by improving service and the efficiency of its application.
The 2023 roadmap for Thailand follows an announcement by parent company, Grab Holdings Inc, last month that it expected to break even by the end of this year and turn a small profit.
Worachat Luxkanalode, Grab Thailand's country head, told a media briefing on Thursday that instead of spending on growth, the company would focus on improving its application technology and four core services: mobility, delivery, financial services, and enterprise.
Its enterprise business is the most important because its return is large in terms of size, revenue, and margin, Worachat said.
"Grab Enterprise now offers two main solutions: Grab for Business and GrabAds. Grab for Business will assist enterprise users in managing all Grab services, allowing them to better manage their time and costs. Meanwhile, GrabAds will integrate advertising solutions within the superapp ecosystem, allowing marketers to gain consumer insights and reach the right target audience across the Grab platform," he explained.
According to a Grab report, GrabAds helps businesses increase customer engagement and awareness, with up to 80% of Grab app users watching video ads till they are complete.
Worachat said mobility and delivery services will remain a key focus for Grab Thailand as the country's economy improves and foreign tourists return, increasing demand for the services.
Daily use of Grab Thailand’s mobility service rose in the fourth quarter to slightly above pre-pandemic levels, he said, adding that the number of international tourists using the service rose 152% year on year after the country reopened.
Grab Thailand’s delivery service is still expanding as consumers' habits change and they become more familiar with on-demand food and grocery delivery services.
The service saw significant growth outside Bangkok last year. The delivery service usage in provinces outpaced Bangkok by three times, Worachat said. This convinced the company to expand its service area beyond provincial capitals into districts of large provinces.
Grab delivery service is currently available in 68 provinces. After Bangkok, the provinces with the most users are: Chiang Mai, Phuket, Chonburi, Khon Kaen, and Nakhon Ratchasima.
Worachat said that in order to grow the Grab mobility and delivery service last year, the company improved users’ experience through innovative technology and management systems. For example, users and drivers saw reduced waiting and delivery times, he said.
Grab will grow sustainably by increasing the number of its electric vehicles, both four-wheel and two-wheel.
The company will also fine tune its price promotions to ensure repeat users. It will apply discounts to all services through a subscription package, Worachat said.
Grab’s financial service, which provides loans with no interest to merchants and drivers, was launched to support social development, Worachat said. The company does not expect to make a profit from this service and instead focuses on risk management so that it does not harm other services, he added, explaining:
"With over 10 years of business operations in Thailand, Grab remains committed to our GrabForGood mission of fostering long-term growth. This year, Grab will focus on synergising all businesses and creating mutual benefits within the Grab ecosystem, while also improving operational efficiency through innovation and technology across our four core businesses.”
Worachat said he was convinced that Grab Thailand’s strategy for this year will help Grab Holdings achieve its target of breaking even and turning its first-ever profit.
According to Grab's most recent earnings report, revenue for 2022 and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the second half of last year exceeded guidance.
The report also showed that revenue for the fourth quarter of 2022 grew 310% to US$502 million, up from $122 million a year ago. Full-year adjusted EBITDA was negative $793 million, an improvement of 6% compared to negative $842 million for 2021.
Grab's full-year revenue was $1.43 billion, up 112% from $675 million in 2021 – exceeding guidance of $1.32 billion to $1.35 billion.
The company's loss was reduced to $1.7 billion.
Grab is a leading superapp in Southeast Asia, operating across the delivery, mobility, and digital financial services sectors.
The company is currently active in more than 500 cities in eight Southeast Asian countries: Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
It has about 30 million users.
