Southeast Asian super app provider Grab remains optimistic on longer-term growth prospects, company executives said on a Wednesday (Aug. 23) second-quarter 2023 earnings call, highlighting how “affordability initiatives” and strengthening engagement through its flagship subscriptions program, GrabUnlimited, have been key levers in expanding its marketplace of drivers, riders and small businesses.
“More people are using Grab now than ever before,” Grab CEO Anthony Tan told analysts and investors on the call, pointing to a 7% year-over-year (YoY) increase in group MTUs (monthly tracked users) to reach 34.9 million — an all-time high for the quarter.
The deliveries segment, in particular, saw significant growth in Q2 2023, resulting in a 118% YoY increase in deliveries revenue to $292 million, up from $134 million in the same period in 2022. GrabUnlimited users had a significant role to play, accounting for almost a third of deliveries’ gross merchandise value (GMV) and on average, spending almost 4x more on food deliveries services compared to non-subscribers, the company said.
Overall, group revenue for the Singapore-based company jumped 77% YoY, with Tan expressing optimism toward the firm’s longer-term growth prospects and the opportunity it has to cement in its leadership position in the region.
“Southeast Asia is still underpenetrated across our products and services, and we see plenty of headroom to serve beyond the 1 in 20 users and the millions of driver and merchant partners in the region that are on our platform today,” he noted.
On the ride-hailing front, mobility GMV revenues in the second quarter saw double-digit growth in the quarter, with the average frequency per user increasing 12% YoY.
“When we compare mobility GMV levels between second quarter 2023 and the same period in 2019, several of our core markets such as Malaysia, Singapore and Thailand have either reached or surpassed these levels,” Grab COO Alex Hungate said on the call.
To meet this growing demand, Hungate added that they will continue to focus on enhancing driver supply, which is nearing pre-COVID levels.
Grab is also in the process of acquiring Transcab, Singapore’s third-largest taxi operator, which is expected to bolster its driver supply in the country. Other moves to drive segment growth include the launch of carpooling options in Malaysia and Indonesia, the relaunch of Grab Share in Singapore and the Philippines, and a revamp of its Move It app to improve two-wheel experience in the Philippines.
When it comes to financial services, company executives said Grab’s lending activities fueled Q2 revenue, with total loan disbursements growing 47% YoY.
“We focused on lending to our own ecosystem, where we have deep data insights to better manage and control credit costs while providing positive uplifts to our ecosystem,” Hungate said, adding that regulators allowed its digital bank in Singapore, GXS Bank, to increase total deposits in July, enabling Grab to increase the maximum deposit amount for individual savings accounts to 75,000 Singapore dollars from 5,000 prior.
“We are challenging the notion of what a basic savings account could do to support their goals and dreams,” Singapore CEO of GXS Charles Wong said last August, adding that the bank “will also tackle other obstacles that hinder consumers and small businesses from reaching their goals sooner, such as growing their wealth or accessing credit.”
As for the potential for advanced technologies to drive growth, the company said they will continue to play an increasingly important role “in everything we do,” as it helps the firm innovate and enhance the Grab platform experience.
“[Generative AI] helps us debug, do data queries much faster, translates menus and has improved our grab chat. So for us, we will continue to leverage [Generative AI] to unlock operational efficiency while enhancing the overall user experience,” Tan said.
Overall, Grab aims to remain focused on driving towards profitability while scaling the business sustainably, which have been associated with cost-cutting measures taken in recent months.
In June, the ride-hailing and food delivery platform announced that it was letting go of 1,000 of its roughly 12,000 workers, its largest round of job cuts in three years.
“I want to be clear that we are not doing this as a shortcut to profitability,” Tan said in a message to employees posted on the company blog that month.
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