Online shopping

Seize the purchase of a Malaysian grocery chain as Southeast Asia’s SuperApp taps into the online shopping boom

Grab Holdings has agreed to buy Malaysian supermarket chain Jaya Grocer as the Southeast Asian super-app giant expands its delivery business amid growing demand for online grocery deliveries.

The Singapore-based ridesharing and delivery company will purchase all of Jaya Grocer’s common stock and 75% of the company’s preferred stock for an undisclosed amount, according to a filing Tuesday with the U.S. Securities and Exchange Commission. The deal could be worth up to 1.8 billion ringgit ($425 million), Edge reported.

The shares to be grabbed fell 5.30% to close at $6.79 on the Nasdaq overnight. While the merger with blank check company Altimeter Growth Corp. – which facilitated its backdoor listing in the United States – valued the company at $40 billion, the stock has fallen about 48% since entering the market on December 2.

Jaya Grocer will help GrabMart, Grab’s grocery delivery service, expand its presence across Malaysia, where the grocery chain operates 40 stores primarily in the Klang Valley region comprising Kuala Lumpur and Selangor State. To comply with Malaysian regulations, Grab said half of Jaya Grocer’s voting shares would go to a local investor. The transaction is expected to close in the first quarter of 2022.

Grab began grocery deliveries in 2019 before the Covid-19 pandemic wreaked havoc on the region’s economy, driving down ride-sharing revenue across Southeast Asia. Despite weak ridesharing activity, the group’s gross merchandise value rose 32% to a record $4 billion in the third quarter, supported by the 63% jump in GMV for food deliveries to $2.3 billion.

The super app has expanded its delivery business as the pandemic has accelerated the adoption of e-commerce and other digital platforms. Online grocery deliveries are among the fastest growing e-commerce segments in Southeast Asia, with Euromonitor International expecting the category to grow at a compound annual growth rate of 24% in the over the next few years, reaching nearly $12 billion by 2025.

In November, GrabMart signed partnerships with supermarket and grocery store chains in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. At the same time, it has partnered with e-commerce company Lazada to provide same-day delivery services to consumers in Singapore through GrabExpress.

Co-founded in 2012 by Anthony Tan and Tan Hooi Ling as a taxi booking app, Grab has since grown into a super app by expanding into ridesharing, food delivery and digital financial services. The company now serves customers in more than 400 cities in Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.