Still Grabbing a lifeline?
While its food delivery has thrived during the onset of COVID-19 pandemic when lockdowns and movement restrictions had forced many consumers to resort to ordering food online for home delivery, lifting of many of the COVID measures has seen consumers returning to on-site dinings for socialisation. The stellar performer has since returned to earth.
Meanwhile, Grab appears to be still burning cash to defend its market lead and increase its market share in the ride hailing and delivery services amidst rising competition, as it continues to prioritise expansion over profitability.
With a saturated market crowded with multiple players, costly mergers and acquisitions may be on the cards too.
Grab is also investing heavily in its fledgling financial services that include a newly established digital bank in a joint venture with Singtel. With rising cost of funds and peaking lending rate, there may be limited room for net interest margin growth.
Hence, overall Grab appears to be between a rock and a hard place. Unless the company innovates and reinvent itself to stay ahead of competition and remain relevant post pandemic, I’m not optimistic of its share price regaining its past glory during IPO.
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