GrabFood sets eyes on 10 markets in 2020

GRABFOOD, the online food delivery arm of super app Grab, aims to expand to at least 10 markets in the Philippines by 2020, as it gears up for a path of profitability supported by a “very sustainable” business model.

Edward Joseph de la Vega, who heads GrabFood Philippines, said his group will foray into more cities in the

country to complement its current operations in 35 cities across Metro Manila, Metro Cebu and Bacolod.

While he refused to list the 10 new markets, he hinted that it includes Metro Davao, Baguio and Iloilo. There are certain criteria for the new markets, de la Vega noted, including the availability of restaurants, population and volume of tourists, and Internet connection, among others.

“We want to continue to expand throughout the rest of the Philippines. We will be launching to at least 10 more markets in the Philippines and hopefully more,” he said. “We want to build through adjacent markets and even in markets that Grab doesn’t have a presence.”

The expansion to new markets would also mean an increase in its merchant base—currently at over 9,000 restaurant partners ranging from big to micro businesses. GrabFood gets as much as 30-percent commission from food orders, while the delivery fee goes directly to its delivery partners.

“Our business is very sustainable. We have a long-term plan that focuses on our growth even for our partners,” he said. “The important part is when we build businesses, we have a path for profitability. We are sticking to that path.”

GrabFood, de la Vega noted, is not yet profitable.

“We have learned a lot from our transport business. It’s not about the promos, but working with the partners in a way that is sustainable,” he said. “We want to make sure that when we partner with merchants, it’s a win-win for both.”

Since it was launched a year ago, GrabFood has grown 15 times in terms of monthly orders delivered and incremental revenues. No absolute figure was provided.

“The growth we experienced was far from what we expected initially, it shows the strength of the Grab platform,” de la Vega said.

Aside from its expansion in new markets, GrabFood will also introduce new innovations and food concepts, such as delivery via runners—or people without any vehicles—and bikes. It will also introduce GrabKitchen, a cloud kitchen concept that unifies different merchants in one central location, to keep up with the demand for the service.

First introduced in Metro Manila in November 2018, GrabFood is now the leading online food delivery service in the Philippines, with Kantar hailing it as the most used brand for app-based food delivery from December 2018 to September 2019.

GrabFood is celebrating its first anniversary this month through a massive campaign that will reward users, as well as award three patrons with a GrabFood for a year.