GrabFood: No.1 Food delivery in Malaysia
What is GrabFood
By Fun Cheng Jun
Grab offers essential everyday services to over 670 million people across Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, Cambodia, and Myanmar (Clara Felicia, 2022). One of the essential services offered is GrabFood which allows users to get various tasty foods all day with great discounts, delivered right to their doorsteps (Felicia, 2022).
In Indonesia, GrabFood competes with other big and surging companies, like: GoFood by Gojek, ShopeeFood by Shopee, and Traveloka Eats by Traveloka (Felicia, 2022).
While superficially a simple matter of placing an order and expecting a hot meal at your doorstep, food delivery is an incredibly complicated business. Companies in the space have to navigate the often contradictory expectations of multiple stakeholders. Among these are consumers who want a wide range of food and quick delivery at an affordable price, merchants who wish to increase their sales by serving as many customers as possible and finally drivers who want to maximise the number of deliveries made within a short timeframe, to earn more income (Balakrishnan, 2021).
Business Potential
By Lee Bing Chiau
In today's fast-paced urban lifestyle, people seek the most convenient and time-efficient ways to obtain their food. For instance, during lunchtime at work, ordering food directly to the office instead of going out can save both time and travel costs. Recognizing this demand for convenience, Grab launched GrabFood to cater to the growing need for efficient food delivery services.
During the 2020 Movement Control Order (MCO) in Malaysia, restrictions on movement and stay-at-home mandates significantly increased demand for food delivery services. Many restaurants, limited to takeout and delivery, relied on platforms like GrabFood to receive orders. As a result, GrabFood experienced a surge, with deliveries increasing by 30% compared to the week before the MCO (Kamel, 2021).
Base on the study, the merchant partners recorded a 25% increase in online revenue through GrabFood, while over 8,000 merchants signed up. Over 100,000 GrabCar drivers supported deliveries as the transport business saw a 90% decrease in rides. By September, nearly 25% of food deliveries were completed by GrabCar drivers, and the platform created earning opportunities for over 10,000 new drivers and delivery partners (Kamel, 2021).
Jiong Jian Tan, Director of Commercial and Deliveries at Grab Malaysia, highlighted their growth strategy, emphasizing the importance of expanding their presence throughout Malaysia to benefit all Malaysians. "We aim to revolutionize on-demand deliveries with tech innovations tailored to our users' needs," he said (Grab, 2023). Tan also noted that GrabFood now offers the widest range of restaurants, with the number of merchant partners more than doubling each year since its launch in 2018 (Grab, 2023). To provide more value and savings, GrabFood introduced Saver Delivery, offering delivery fees as low as RM1, and GrabUnlimited, which unlocks additional savings across Grab services (Grab, 2023).
In conclusion, I believe GrabFood has significant potential and will continue to grow substantially in the future.
What are the WOW factors?
By Chow Zhi Yang & Bakyt
The excerpt highlights Grab's strong market position in Southeast Asia, particularly in the food delivery sector, underscoring its strategic advantages over competitors. Grab boasts a fleet twice the size of its competitors across the region, with one in five people having the Grab app installed, ensuring fast delivery due to the large number of drivers available. Leveraging its existing relationships with merchants through GrabPay, GrabFood has integrated hundreds of thousands of merchants into its network, enabling them to see a 10% to 30% increase in sales, with top performers potentially doubling their revenues (Goh, 2019).
In Malaysia, GrabFood has expanded to five new cities, completed over two million deliveries in one year, and seen significant growth in its merchant and delivery partner base. More than 85% of delivery partners use GrabFood to supplement their income, earning up to one-third of the average Malaysian household income. The integration of GrabFood into the Grab app has further boosted merchant sales, with a recent promotion increasing sales by almost 37%. Focusing on close partnerships with merchants and data-driven expansion, Grab views the demand for food delivery as a structural shift rather than a temporary trend. Overall, Grab's strategy combines a robust infrastructure, extensive merchant relationships, and continuous expansion to solidify its leadership in the Southeast Asian food delivery market (Goh, 2019).
Moreover, GrabFood have extensive network of delivery partners, significantly larger than its competitors, ensuring fast and reliable services across Southeast Asia. This vast network, which allows for shorter delivery times, is critical for customer satisfaction and is a major competitive advantage. Moreover, the integration of GrabFood into the larger Grab ecosystem means one in five people in the region have the app installed, facilitating easy access to a wide customer base (Goh, 2019).
Additionally, GrabFood uses sophisticated data analytics and technology inherited from its parent company, Grab. This technology optimizes delivery routes and tailors offerings to user preferences, enhancing operational efficiency and the overall user experience. These technological advantages help GrabFood maintain a leadership position by improving service quality and efficiency (Balakrishnan, 2021).
Lastly, GrabFood's strategic partnerships with a broad spectrum of merchants have led to notable increases in merchant sales, with some experiencing up to a 30% boost. This growth encourages more merchants to join the platform, increasing the variety of food options available to users and strengthening GrabFood's market presence. The focus on fostering close merchant relationships and leveraging data-driven strategies supports GrabFood's expansion and customer satisfaction efforts (Goh, 2019).
How does GrabFood’s business model works?
By Ryan
GrabFood operates as an on-demand food delivery service that connects customers with local restaurants through its application (Grab, 2024). The business model follows a three-sided marketplace structure involving customers, restaurants, and delivery partners.
Customers use the GrabFood app to browse menus, place orders, and make payments. They benefit from convenience, a wide variety of food choices, and real-time order tracking.
Restaurants partner with GrabFood to reach a broader customer base, enhancing their sales without needing to handle delivery logistics. They pay a commission to GrabFood for each order placed through the platform.
Delivery partners, also known as GrabFood riders, pick up orders from restaurants and deliver them to customers. They earn income based on the number of deliveries they complete, with the potential for additional earnings through tips and bonuses.
GrabFood generates revenue primarily through commission fees charged to restaurants and delivery fees paid by customers. The platform also offers subscription services, promotions, and advertising options for restaurants. This model allows GrabFood to scale efficiently, leveraging technology to optimise routes, improve service quality, and maintain competitive pricing.
Why GrabFood Success?
By Kaysan M.
According to some research (Ganou et al., 2022), service quality is a leading driver in repeat usage of catering apps. GrabFood, being a subsidiary service of Grab, is able to provide a level of quality that can be difficult to achieve from other standalone delivery apps.
Research shows that localization could have also helped GrabFood succeed in Southeast Asian markets (Balakrishnan, 2021). According to Zhang (2020), GrabFood also leverages data analytics, artificial intelligence, and cloud kitchens to drive localization and personalization efforts.The Grab app takes note of the user’s location, suggesting restaurants within a certain delivery radius. This ensures that users get relevant suggestions, and that the orders they make can be delivered within a shorter time period.
The global COVID-19 pandemic likely also played a role in the success of food delivery services like GrabFood. During times of government-mandated lockdown, food delivery became a lifeline to many people unable to leave their homes. Companies like Grab were quick to capitalise on this, and the food delivery industry has continued to expand since then (Ahuja et al., 2021).
References
Goh, J. (2019, July 26). Tech: GrabFood eyes a bigger bite of food delivery pie. The Edge Malaysia. https://theedgemalaysia.com/article/tech-grabfood-eyes-bigger-bite-food-delivery-pie
Balakrishnan, R. (2021, April 21). How GrabFood is harnessing technology to overcome the challenge of food delivery in Southeast Asia. DealStreetAsia. https://www.dealstreetasia.com/partner-content/how-grabfood-is-overcoming-the-challenge-of-food-delivery-in-southeast-asia
Felicia, C. (2022, March 6). GrabFood: A UX Research Case Study 2022. Medium. https://medium.com/@clarafelicia0911/grab-food-a-ux-research-case-study-2022-7d44ac8e7ff
Ganou, E., Karavasilis, G., Vrana, V., & Kehris, E. (2022). Online Food Ordering and Delivery Applications: An Empirical Study of the Factors Affecting Intention to Reuse. Transcending Borders in Tourism through Innovation and Cultural Heritage, 961–975. https://doi.org/10.1007/978-3-030-92491-1_57
Zhang, W. (2020, March 19). Tech in Asia - Connecting Asia’s startup ecosystem. Www.techinasia.com. https://www.techinasia.com/closer-grabs-efforts-serve-ideal-food-delivery-ecosystem
Grab. (2023, June 14). GrabFood Malaysia’s Nationwide Expandsion Cements No.1 Food Delivery Position. Grab. https://www.grab.com/my/press/others/grabfood-malaysia-no-1-food-delivery/
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