HONG KONG (Reuters Breakingviews) - Anthony Tan will cement his star status in the year ahead. The chief executive and co-founder of Grab has deftly steered the $15 billion Southeast Asian all-in-one app through economic turmoil. Even as lockdowns pummelled the company’s main ride-hailing business, the pain has been largely offset by surging demand for food delivery and groceries. Overall revenue has bounced back to pre-virus levels, the company says. With such momentum, a new push into financial services will put Tan firmly in the tech limelight.
The digital finance opportunity is huge. A joint survey from Alphabet-owned Google, Temasek and Bain & Company found that over a third of e-commerce consumers in the region’s top six economies only started to use online services because of the pandemic and over 90% plan to stick with their new habit. The same report forecast online payment transactions will rise 15% to $1.2 trillion by 2025, up from $620 billion in 2020.
Grab already has payments, insurance and small business loans in most of those markets. In August, the company unveiled a suite of new offerings, including a wealth management product in Singapore that allows users to invest as little as $1, as well as “buy-now-pay-later” plans in multiple countries. Recently, Grab’s venture with mobile carrier Singtel won one of Singapore’s first digital bank licenses – a potential precursor to similar moves into Malaysia and the Philippines, as they prise open their banking sectors.
Deep penetration in a rich country like Singapore may prove an advantage. Higher-margin fees and commissions that Grab can secure on its home turf in retail banking and other services will support its bottom line as the company continues its regional expansion. Top rival, Gojek, backed by Facebook and PayPal, dominates in Indonesia which is a much larger but poorer market.
The ultimate prize could come from a long-anticipated merger between Grab and Gojek. The two loss-making arch-rivals may decide to become allies as video-games colossus, Sea Limited, fast becomes a serious contender in mobile wallets. If antitrust regulators allow any such deal, the Singaporean group is likely to lead the consolidation — and Tan will be centre-stage.
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