SMEs must embrace digitization or get left behind, says Grab
Singapore-based ride-hailing giant Grab has launched a business-to-business (B2B) service to help more small businesses across Southeast Asia go online and reap the benefits of business digitalization.
The Small Business Booster programme includes tools and advice for smaller businesses to improve their visibility online and make digitization initiatives simpler. A self-service merchant platform, GrabMerchant, will be rolled out in June, enabling business owners to optimize operations, view insights, run advertising and purchase supplies at wholesale rates.
Grab said the programme and platform would help small businesses adapt to the “growing digital economy” that has been brought forward by necessity of the pandemic and lockdown measures.
Small businesses the ‘backbone’ of SE Asian economy
“COVID-19 has accelerated change. We have seen dependency on online services grow exponentially almost overnight,” said Hooi Ling Tan, co-founder of Grab.
“This is spurring innovation in Southeast Asia, but is also putting us at risk of widening the digital divide. Small businesses make up the backbone of Southeast Asia’s economy, but the vast majority of these businesses are offline.”
Tan continued that small businesses must now embrace technology or risk falling further behind. Enabling businesses to make this digital transition quickly and effectively could be a significant factor in Southeast Asia’s economic recovery in the year to come.
While quickly-implemented social distancing measures meant many small businesses had to close or cope with a large reduction of customers, even easing lockdowns won’t necessarily see things going back to normal. Consumers won’t quickly change their lockdown shopping habits, which have taken them online, and they won’t be eager to go back into stores or physical outlets. At the same time, many businesses are envisioning their workforces working from home more permanently.
Presently though, just over a third (34%) of small businesses in Southeast Asia have an online presence – even in tech-savvy Singapore only half of the city-states small- and medium-sized enterprises have a digitalization strategy in place, according to Singapore Business Review.
For companies like food businesses, GrabMerchant can enable them to quickly set up an online store, cashless payment options and, Grab says, be “up and running in 24 hours”. But they can also then view insights into sales, their customers’ buying habits, and how effective marketing campaigns are, helping them to grow their business.
In addition, users can create, run and track ad campaigns from the dashboard, and even order supplies and ingredients at wholesale rates.
Of course, Grab isn’t doing this all from the good of its own heart. These are value-add services that encourage businesses to sign up across its growing range of services, and ultimately aim to optimize the products and services of its millions of businesses. That means Grab is expanding its userbase and ramping up their sales. As well as a sizeable commission, Grab will also take fees from the services – like advertising – that it’s made much more convenient its users.
But while launching GrabMerchant is another step forward in turning the super app into Southeast Asia’s ‘business machine’, the commercial activity it creates is having no small impact on the economy and the livelihood of small businesses.
Between March and April 2020, amid the height of the pandemic and lockdowns, more than 78,000 merchants were onboarded to the Grab platform. Small businesses saw a 21% spike in online revenue via the app through this period. Grab also gave 115,000 individuals who signed up to work as delivery drivers through the period the chance to earn.
In the 12 months leading up to March 2020, it’s estimated that Grab contributed US$8.5 billion to Southeast Asia’s economy.
“COVID-19 will require exceptional collaborative efforts from all levels of society to overcome. Scientists are working on a vaccine. Policymakers are finding ways to bolster their countries’ economies. Everyday folk are helping to flatten the curve by practicing social distancing. Private companies like Grab are using our platform and tech to find ways for even the smallest micro-entrepreneur or business to continue sustaining their livelihoods in these challenging times,” said Tan.
“The future is uncertain, but Southeast Asia is a community that knows how to face adversity, and thrive.”