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With shared investor DNA, Grab and Lazada pool consumers in Vietnam

Written by Khamila Mulia Published on     2 mins read

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To make headway in Southeast Asia, Alibaba needs even larger vehicles to chart new paths in the region.

In early November, Grab and Lazada Vietnam integrated their product offerings. Under the partnership, Vietnamese consumers can access GrabFood from the homepage of Lazada’s app and web page, while Grab’s users in the country can access Lazada’s platform via banners and widgets in the Grab app, forming a smooth transition between Grab’s environment and Lazada’s retail experience. There are also cross-platform loyalty and promotional programs.

The alliance reinforces the two firms’ consumer-focused strategies and addresses the growing need for convenient digital transactions in the country, Grab said in a statement.

Grab and Lazada share investor DNA. SoftBank backs Grab and holds a stake in Alibaba, which owns Lazada. Masayoshi Son, SoftBank’s founder, poured USD 20 million into the Chinese e-commerce company in 2000. Now, that stake is worth more than USD 100 billion. Alibaba is SoftBank’s most successful investment so far, and Son said in May that “Jack Ma and I will remain friends forever.”

In September, Bloomberg reported that Alibaba Group was setting the scene for a USD 3 billion investment in Grab, which would be Alibaba’s biggest venture in Southeast Asia since its acquisition of Lazada in 2016. The Chinese firm has cut other big checks in Southeast Asia: Alibaba led a USD 1.1 billion investment in Indonesian e-commerce unicorn Tokopedia in 2018, and its investment arm Ant Financial backs Indonesian mobile wallet Dana.

Nonetheless, Alibaba may be seeking even larger vehicles to chart new paths in Southeast Asia. Grab reportedly has 187 million users as of June 2020, and it offers a litany of services beyond ride-hailing, like food delivery and payments, as it builds up to become a super app. Its ride-hailing and logistics infrastructure, along with the company’s knowledge about eight Southeast Asian countries, can complement Alibaba’s e-commerce and fintech offerings in the region.

With Grab and Lazada’s stakeholders already intertwined, the two firms’ partnership in Vietnam signals Alibaba may follow through with its plans for Grab. The two companies have integrated their logistics services in the country, with Lazada leveraging the network of GrabExpress delivery-partners to expedite orders for customers.

Lazada was the fourth most visited e-commerce platform in Vietnam in the third quarter of 2020, with more than 20 million monthly web visits, according to iPrice. Grab’s presence on Lazada’s app, and vice versa, is also a milestone in Grab’s process of building a super app. 

Grab’s competitor Gojek already has a similar partnership with JD.id and Blibli in Indonesia.

For now, it is unclear whether the Grab and Lazada will initiate similar integration in other Southeast Asian markets, but Grab told KrASIA that it is looking at ways to scale a partnership that is the most extensive in Vietnam.

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