Singapore’s Grab reported its first-ever quarterly profit on Thursday (Feb. 22). This, despite a cautious outlook for annual sales as its ridesharing and food delivery operations in the “fertile” Southeast Asia market continue to recover from the effects of the COVID-19 pandemic.
“Our mobility business, which was severely impacted by the pandemic, exceeded pre-COVID levels as we exited 2023,” Grab CEO and Co-founder Anthony Tan told investors on a fourth-quarter earnings call, adding that the company is “now the largest on-demand platform in the region at a scale that is over 3x larger than our next closest competitor.”
In terms of headline numbers, deliveries revenue grew to $321 million in Q4 2023 from $268 million in the same period in 2022, and by 80% year over year (YoY) for the full year 2023. These results, according to company executives, have set them “up strongly for 2024.”
Mobility revenues also increased by 26% YoY in Q4 and 36% YoY for the entire year, driven by an increase in tourist ride-hailing demand.
“The traveler segment is a key focus for us compared to domestic users,” Chief Operating Officer Alex Hungate said on the call. “Travelers are generally less price sensitive, and on average, spend nearly twice as much as domestic users. We are pleased to see that our efforts to capture this set of users has yielded good results.”
Overall Monthly Transacting Users (MTUs) grew 8% YoY, from 32. 7 million in 2022 to 35.5 million in 2023, with Growth in Deliveries MTUs reaching an all-time high during the quarter.
Mobility growth was mainly driven by an uptick in Mobility MTUs and average order frequency as the company worked on improving driver productivity to match the surge in demand.
Another highlight of the year was Grab Unlimited, the company’s subscription service, which continues to account for a third of delivery gross market value (GMV), with higher subscriber spend levels and retention rates compared to non-subscribers.
“Grab Unlimited, the largest paid on-demand loyalty program in Southeast Asia now, is proving to be an important engagement and retention driver for our loyal users,” Hundgate said.
He added that the company sees opportunities to enhance customer lifetime value within Grab Unlimited by increasing cross-selling rates, especially toward mobility and financial services, while hinting at plans to introduce more non-monetary, exclusive benefits for loyal subscribers.
The ridesharing and delivery company noted significant progress with GXBank, a digital banking collaboration between Grab and Singaporean telecommunications giant SingTel. GXBank commenced full operations in Malaysia in the last quarter of 2023.
The Grab-led financial institution (FI), Malaysia’s first virtual bank and recipient of the first of five licenses granted in the country, saw more than 100,000 customer sign ups in the first two weeks of launch, of which 79% of depositors were Grab users.
“Loan disposals for GXS Singapore also grew quarter on quarter, and over 80% of GXS customers have ecosystem linkages to Grab,” Tan noted.
Overall, financial services revenues more than doubled compared to last year, growing by 12% from the previous quarter as a result of higher contributions from the company’s payments and lending businesses.
Additionally, total loans disbursed in 2023 grew 57% year-on-year to reach 1.5 billion. According to management, the launch of new Flexi loan volumes from Singapore’s GXS Bank and the ecosystem’s growth, which culminated in Grab Financial (GrabFin), both aided in this expansion.
Grab also plans to further leverage generative AI to drive productivity enhancements. “For example, we have now developed our own in house LLM-powered marketing tool which has enabled us to reduce content generation time from 99 hours to just 90 minutes while raising output quality,” Tan said.
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