Name: Eastworld Spotlight: Grab CEO talks digitization and diversification
Uploaded: 2020-08-13
Duration: 15 min 10 s
Description: Anthony Tan shares how Grab and other businesses are adapting during the COVID-19 pandemic.

[MUSIC PLAYING] SPEAKER 1: Anthony Tan is the founder and CEO of Grab, the leading everyday super app in Southeast Asia. And we're delighted that he would take some time to speak with us. You're at home now, Anthony, is that right? Tell us a little bit about what your work situation is like at Grab. SPEAKER 2: This is my new normal. First of all, Clay, thank you to you, and thank you to Fortune for giving me this chance. I really appreciate it. And as you can tell, this is home. This is as home as it gets. That's literally the children's playroom where they spend most of their day. So all of us, even though we have the ability to go to the office because we're seen as an essential service, somewhat, we've taken the call to ensure that our guys, our fellow teammates are all as safe as possible. So we've implemented, right now in Singapore where I'm calling from is literally 100%, or close to maybe 99% work from home. SPEAKER 1: Grab is a remarkable company in that it has so many different business units, and it's engaged at so many different points in ordinary people's lives. What sort of measures have you taken to promote hygiene and assure the health and safety of those team members? SPEAKER 2: Well, as you correctly said, hygiene is tremendously important right now. Straight off the top of my mind, number one, we would have first introduced Grab Protect. So imagine you jump in a car. There is hands sanitizers, there's the plastic shield, there's the-- every time you jump on the app, you can verify that I agree to all these terms. And a driver can even choose to-- when he comes in and he sees that you're not wearing a mask, he can choose to reject you as a customer, even you, Clay. So that would be something that we would never have accepted before. But today, we will prioritize safety and hygiene even above customers. And customers actually appreciate that. We've seen how that's really helped the business, not just in rides, but also in food delivery. So for example, we have all the contactless. We make sure we do temperature checks for our merchants, our drivers. We have to submit temperature checks in the app constantly throughout the day before they can take certain parts of the day to retrigger their work activity. So we've done really-- and the good news, if I may share, is that when they did a survey, Grab is seen across the industry as the safest and most hygienic platformer. SPEAKER 1: In the United States, Uber and Lyft have faced some real difficulties in having customers have enough confidence to come back and actually ride in their services. Whereas in China, for the most part, DiDi seems to have been a little bit more successful in persuading people that it was safe and they could get back in the car. What's been the response of Grab customers? SPEAKER 2: The difference you mentioned about Uber and Lyft, and those are great peer groups. For us, we have a diversified business from rides, transport, mobility, all the way to food delivery, mart delivery, so groceries, things like that, all the way to social, e-commerce. So we facilitate, we're one of the largest, if not the largest in same day and instant deliveries that supports the e-commerce-- the bustling activity of e-commerce right now taking place in the region. So what we see is one, diversity is playing out. Because as the pandemic hit, our rides of course, came down, naturally, as cities went into lockdown. But our deliveries business shot up really, really fast. We were-- I mean, on some weeks, we were registering 20%, 30% growth. That's one. I think two is, what we're also seeing, the difference-- and you talked about this in the states and Southeast Asia-- is that, because car ownership is also much lower in this part of the world than in the US, we see that people tend to be more willing. As long as you can give them that assurance of safety and hygiene. SPEAKER 1: That's really interesting. Does it suggest to you that one legacy-- sort of long-term legacy of the pandemic is that people are much more habituated to the idea of shopping online and e-commerce, and that that's a permanent shift? SPEAKER 2: That's exactly right. There has been a permanent shift. What we see is customers including-- I would say we probably have a-- the core segment would be, for example, on food delivery, a lot of our customers are female between the ages from say, 20 to say, 18, 20, all the way to say, 35, 40 years old. And this idea of complete cashless, food arrives, my e-commerce arrives, my groceries arrive was a novelty. But now it's become a real deal. SPEAKER 1: Really interesting. I wonder if we could talk a little bit about how this feels from the vantage point of many of the vendors. I mean, you work a lot with small businesses, whether it's people that are supplying food, or groceries, or really any kinds of different products and services. This is a very difficult time for people that are in the small business space, is it not? SPEAKER 2: That's exactly right. It's tremendously difficult for some of them. Some of them have-- many of them who weren't on Grab had to close. So this is where, I believe, that Grab food, the likes of Grab Pay, a lot of these services that were seen as maybe at one point in the early days, nice to have. Today, they were the primary source of business for many of these guys. So in many of the governments around the region, they classified us as essential service. So even more important than a straight out public transport, because people weren't going to work, it was a must have to get food into homes during lockdown. SPEAKER 1: Fascinating. Have you been surprised by how successful most of the Southeast Asian economies have been in coping with the pandemic? I think initially, there was a fear that this was something that, once it really got started in Southeast Asia, was going to rage through the entire region very quickly. SPEAKER 2: I would say, I can't speak for all. I think I wouldn't make generalized comments. But you're right to say that most of Southeast Asians' businesses right now, something like 90%, are small medium enterprises, SMEs, that really are a major part of the region's business. Now, a lot of it was also, I would say, traditional. Meaning in the sense that they were mostly offline. So the penetration of the food e-commerce, or grocery e-commerce, or mobile payments, were still very low-- or cashless-- are very low compared to, say, the US or China. So I think that COVID obviously took what was clear, that is from the future and just brought it forward by years. Second, I would say, it's safer in Singapore. I think in Singapore, they executed this, if you don't wear a mask, there's this ability to self police. If I walk out my apartment and I don't wear a mask, you don't need a police man to find you. I know people, your neighbour will just stare you down until you-- and even if the mask was below your nose, they will make sure that it has to go above your nose. People stare you down. So I think that ability to-- this region or at least Singapore and many of the other countries can be quite disciplined when it came to wearing masks, for example. They were quite disciplined to make sure, hey, I'm an emerging market. I need this, and I need to embrace whatever it takes to survive. And that hunger was there. So they just quickly pivoted to online very quickly. SPEAKER 1: What's the kind of baselines that you're using for business planning and sort of mapping out where all these economies are-- how did I know-- in the US, a lot of people are hanging on, waiting for the vaccine. Because they kind of figure that things will not really be back to normal until a significant number of the population has been vaccinated. Do you see approaching a kind of more of a normal economic outlook even before there is a vaccine? And what's your expectation for having a vaccine? SPEAKER 2: The reality is, every city in the region is going to have a day that they will feel like it's nearly solved. And then, there's going to be another day that they will feel like doom and gloom. So what we are seeing is these waves. It's not going to be this permanent sense that, oh, we're out of the danger zone and that's it. And I think it's good. None of us should, in fact, we should be on our toes to ensure that we prevent the next wave from happening or delay it as long as possible. So when we plan our business as we said, for example, one advantage we had was because we had a lot of say Grab car, Grab bike drivers. And the minute that transport came down, they were available. Grab food came and saw a massive spike in volume. We could move these drivers. So we moved something like 149,000 drivers in a period of two months-- 149,000 drivers in two months. Can you imagine? That's like an army. And we're talking about like moving them from what they were used to every day to bringing people to work now, going upstairs, picking up the food from the restaurant, or shopping from a grocery store, and then delivering that. We also saw how our GrabMart scaled to about 50 different cities in a period of 2 and 1/2 months and fewer cities in eight countries. So now we have partners with 3,000 or more stores in this short period. Again, all this literally came up during COVID. We've also seen how Grab Pay-- and again, people-- so imagine this, we thought that people would be-- you know, if it's a card, but people don't even want to have somebody else touch their card. This idea of touching my card is now seen as non-kosher. So the idea that I can just QR code pay, the idea that I can just tap this idea. So for example, if you have a Grab Pay card put in your phone, you can tap it for MRT, for mass rapid train. You can QR code to many thousands of our stores across the region. And because most of the people in this region, say 70%, are underbanked in some shape or form. So that, to us, was a great boost. SPEAKER 1: That's really quite a thing. Because we're talking about a group of economies where-- there is some variation, obviously. But where you've got many people, who as you say, are underbanked. That they're used to just using cash all the time. Cash that gets passed from one hand to another, to another, to another-- that's a very fundamental transformation on consumer psychology. SPEAKER 2: Fundamental, right? I mean, cash was one. But imagine, I thought cards-- like you wouldn't have thought a cards economy that bad. People don't even want to pass a card on. So it's so pervasive from a customer behavior change. And merchants don't even want to-- they actually encourage their cash bearer not to take it. Because they don't want a sick staff and then passing it on. So they say, please, I encourage you, use your phone-- QR code pay, please. SPEAKER 1: And you think that's going to be a lasting shift? SPEAKER 2: Oh, yeah. There are stores that I see today don't even accept cash anymore. They say no cash accepted here. That's a new reality. SPEAKER 1: Fascinating. You've been very generous with your time. These are wonderful insights in a very fascinating and diverse market. Thank you for sharing them with us. And we hope that you'll come back and fill us in again later on your progress. And in the meantime, stay safe. SPEAKER 2: Thanks so much, Clay. Please stay safe in Hong Kong. And my best regards to your family as well. 

Eastworld Spotlight: Grab CEO talks digitization and diversification

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Anthony Tan on how Grab is adapting under COVID-19.

Watch: Grab CEO talks digitization and diversification

Anthony Tan shares how Grab and other businesses are adapting during the COVID-19 pandemic.