Grab Collaborates with Lazada in Vietnam after Alibaba’s Investment

Alibaba is reportedly in talks with Grab regarding the investment of US$ 3 billion or around IDR 44.5 trillion. Although this news has not been confirmed, Grab has hooked Lazada in Vietnam. A Bloomberg source who is aware of the investment talks said Alibaba plans to integrate Grab’s delivery network service with Lazada.

A number of investors in Southeast Asia think that if the funding is realized, it will open doors for Lazada to new services. Although there has been no confirmation regarding the investment news, Grab and Lazada established a partnership in Vietnam last week (10/11). The Alibaba subsidiary directs buyers to food delivery services, GrabFood and goods delivery, GrabExpress.

Likewise Grab, referring users to the Lazada application. “Both provide vouchers to attract customers from their respective platforms,” ​​he was quoted as saying in the Asia Nikkei Review, Thursday (19/11).

However, Do Ventures co-founder Vy Le said that the dependence of Vietnamese citizens on digital services during the corona pandemic was not as high as other countries in Southeast Asia.

This is because only 1,304 positive cases of Covid-19 in this country and 35 have died, so their activities are not too restricted. Le noted searches around online shopping on Google are increasing. “Vietnam is the most developed market for food technology in the region,” he said.

Community Behavior Has Changed Since Pandemic Occurs

Managing Director of Grab Vietnam Nguyen Thai Hai Van agrees that people’s behavior in the country has changed as a result of the COVID-19 impact. “More and more consumers are considering digital services to meet their daily needs,” he said, as quoted from an official broadcast last week (10/11).

Therefore, the company took Lazada. “We will be able to become a catalyst for the current trend to meet the increasing digital needs of consumers, support social commerce and MSMEs, and provide more income opportunities for partners,” he said.

Lazada Vietnam CEO James Dong added that the partnership aims to create a sustainable digital ecosystem. “This is right at the end of year shopping festivals such as 11.11 and 12.12,” he said.

Previously, individual investor (angel investor) and founder of Tarad.com in Thailand, Pawoot Pongvitayapanu, predicted that the Alibaba and Grab agreement would open doors for Lazada to new services.

“They can dominate e-commerce in Thailand, including the retail business,” he said as quoted from Bangkokpost, last September (16/9). Companies can share user databases from various services, namely e-commerce, transportation or ride-hailing, food delivery, delivery of goods, and others. Demand for products through Lazada is also predicted to increase.

Collaboration Enables Lazada to Enter New Markets

The deal also allows Lazada to enter new markets through GrabMart. In addition, Lazada can use the Amazon Prime model by offering a subscription fee for delivery service.

“When strong players join forces they will hold power over merchants and can pose a challenge for retailers, as they do not have their own shipping fleets or databases,” said Pawoot. Based on iPrice data, Shopee led the way in Indonesia, Singapore, Malaysia, Thailand, and Vietnam in terms of platform visits in the second quarter. Meanwhile, Lazada only excels in the Philippines.

Grab is considered similar to Alibaba’s competitor in China, namely Meituan. This Singapore-based Decacorn provides food delivery and logistics services in the region. In addition, Grab has entered the financial market through Grab Financial.

“What Grab has to offer complements Alibaba’s focus area, in the e-commerce and financial technology (fintech) business,” he was quoted as saying.

Jianggan considered Grab very well suited to what Alibaba wants, namely an on-demand logistics infrastructure, regional knowledge, and a well-established partner network in every country in Southeast Asia. Strategically, it makes sense for Alibaba to invest in Grab. Moreover, Grab investor SoftBank has a stake in Alibaba.