Going beyond scratching surface of opportunity in SEA, Grab completes majority stake in Malaysia’s Jaya Grocer

  • GrabPay, GrabRewards rolled out in all 40 Jaya Grocer outlets
  • Big boost to GrabMart, more options, better convenience to customers

Grab's share price since its Dec listing. The company expects the resulting synergies from its Jaya Grocer acquisition to improved unit economics and overall affordability of grocery delivery in Malaysia.

“From on-demand mobility and deliveries to digital financial services, enterprise services and more, we believe we are only scratching the surface of the opportunity ahead of us…our calling remains the same – to unlock greater opportunity for all Southeast Asians (SEA) to participate in the digital economy.” So said an excited and emotional Anthony Tan, on 2nd Dec 2021, minutes before ringing the opening bell on Nasdaq to announce the commencement of trading of its shares in New York.

Almost two months later, Grab officially takes its first major step beyond just scratching the surface of that SEA opportunity by announcing it has completed its acquisition of a majority stake in Jaya Grocer Holdings Sdn Bhd, a leading premium supermarket chain in Malaysia with 40 outlets, predominantly in the urban heart of the country in the Klang Valley.

The news of the deal first broke in early December based on a 13 Dec filing to the US Securities & Exchange Commission where the 2011 Malaysian founded and Malaysian led Grab, which shifted its HQ to Singapore in 2015 but retains a large presence in Malaysia, announced it had signed an agreement with the shareholders of Jaya Grocer to buy all of the grocery chain’s ordinary shares and 75% preference shares for an undisclosed amount.

Grab has the option to buy the remaining preference shares after the deal closes, subject to certain terms.

While the speculation in Dec was that the deal was worth anywhere between US$335 million to US$430 million (RM1.4 billion to RM1.8 billion), the statement from Grab today did not announce the acquisition price.

The key news that accompanied the closure of the deal was the roll out of GrabPay and GrabRewards across all Jaya Grocer physical retail stores, thereby expanding the usage of Grab’s cashless wallet.

The acquisition also enables Grab to bring more Jaya Grocer retail stores onto its GrabMart marketplace, while also leveraging Jaya Grocer’s large supplier network to further expand its Grab Supermarket product line at lower costs. This in turn contributes to improved unit economics and overall affordability of grocery delivery.

Daniel Teng, Director, Group Operations, Jaya Grocer (left), and Anthony Tan, CEO and co-founder of Grab, at a Jaya Grocer store in the Klang Valley. pic credit: Anthony Tan's Twitter @AnthonyPY_Tan

“It is our vision to make on-demand groceries more accessible for everyone. By combining our extensive on-demand delivery fleet and capabilities, with Jaya Grocer’s strong retail presence and supplier network, we can have quality products delivered to more homes even faster. We believe this partnership will further accelerate the growth of our groceries delivery business,” said Anthony.

“I have built Jaya Grocer from the ground up - from our first store in Klang Valley to over 40 stores today. Grab’s strong track record and ability to execute in a hyperlocal way gives me confidence that I have found the right partner to take Jaya Grocer to new heights. This acquisition provides us with an amazing opportunity to not only grow as a company, but also grow the market for online grocery services in Malaysia,” said Teng Yew Huat, Founder, Jaya Grocer.

The acquisition comes at a time of accelerated growth in on-demand grocery delivery services. Consumer concerns about safety and hygiene have led to a boom in adoption of online grocery shopping. 64% of Southeast Asia’s internet users purchased groceries online at least once during the pandemic, yet online grocery transactions only accounted for approximately 2% of the total grocery spend, according to the e-Conomy Southeast Asia 2021 report.

The same report estimates that online grocery in Southeast Asia could grow to US$50 billion in gross merchandise value - the size of the entire e-commerce market today - at a 10% penetration rate similar to advanced markets.

Online grocery demand remained elevated even as restrictions eased. GrabMart, Grab’s on-demand grocery and specialty retail marketplace, recorded three straight quarters of growth in the first three quarters of 2021. Jaya Grocer also saw continued strong growth, with revenues growing at double digit rates year-on-year from 2018 to 2020, and is EBITDA accretive to Grab’s business.


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