Grab will invest $500 million into Vietnamese fintech over the next five years, the company announced on Wednesday, in a bid to counteract competitor advances in the region’s e-commerce market.
This move is straight out of the Grab playbook. The ride-hailing platform has steadily unfurled operations across Southeast Asia since it launched in Singapore seven years ago.
Last month, Grab announced a $2 billion investment to digitise Indonesian government services in cooperation with venture capital group SoftBank. This follows the app’s Grab 4 Indonesia 2020 campaign which included a four-year plan to put $700 million into the nation’s economy.
In this battle for wallet and e-commerce supremacy, Vietnam is the latest battleground. Jakarta-based Grab competitor Go-Jek launched its local ride-hailing branch, Go-Viet, in September last year but has yet to release an equivalent mobile banking service.
The latest $500 million commitment is simply the next step in a broader strategy to dominate the Southeast Asian market.
As Grab Financial senior managing director Reuben Lai told FinanceAsia in January, “2019 is the year that we want to cement our position as the Asean wallet”.
Despite strict regulatory conditions, Vietnam is a young market filled with digital banking opportunities. The nation’s 94 million population has a median age of 30.7 years old – 69% of whom are currently unbanked, according to the World Bank.
“The country’s rapidly developing economy and young, mobile-first population make it ripe for the adoption of digital services,” said Russell Cohen, Grab’s head of regional operations.
This is not the platform’s first foray into the Vietnamese market. Grab entered the country in 2014 and partnered with local payment app Moca last year to encourage cashless settlement.
As part of the Vietnamese government’s Socio-Economic Development Plan 2020, the funds will expand efforts to bring the digital economy to 63 cities and provinces around the country.