Grab takes payments battle with Go-jek to Vietnam

The $500m that Grab intends to invest in Vietnam is the latest in a series of regional investments as it fights with Go-jek for Asean dominance.

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.

The union was symbiotic; merchants using Moca gained access to Grab’s massive user base, while Grab customers were able to pay bills and buy goods at Moca’s affiliated retailers.
Grab’s offerings have thrived in Vietnam, where GrabFood averages 300,000 daily orders and its ride-hailing service recently topped $1 billion in accumulated earnings.
The $500 million investment, which will be funnelled through Grab's Tech for Good campaign, which will see some of these earnings redistributed in an effort to tackle poverty and unemployment. 

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. 



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