Grab: Digitizing Traditional Markets
Grab has successfully brought small traders from 13 markets in the country's three largest cities onto the GrabMart platform. However, because this collaboration involves small traders, there will be new challenges that Grab needs to address in the journey.
According to market assessments and Aniday, 2020 was a successful year for Grab; The retail market in Vietnam witnessed several interesting developments. Grab recently launched the GrabMart service at the beginning of this year, starting with modern supermarkets and expanding to stalls in traditional markets After divesting from VinMart, Vingroup shifted its focus to developing VinShop - digitizing convenience stores. Meanwhile, Bach Hoa Xanh aggressively opened supermarkets near markets, confident in their ability to attract traditional customers.
13 market traders are now present on GrabMart
According to Grab, despite the strong development of modern retail channels such as supermarkets and convenience stores, traditional channels such as markets and grocery stores continue to maintain stable growth. According to Nielsen's data, Vietnam has approximately 1.4 million grocery stores and 9,000 traditional markets, accounting for 75% of the retail market share, with annual revenue below USD 10 billion. According to Kantar Worldpanel Vietnam, traditional retail channels still meet 85% of consumer demand.
"During Covid-19, online grocery shopping services have experienced significant growth. Even after the waves of Covid-19 have subsided, this habit continues to be maintained.
On March 23, GrabMart was launched in Ho Chi Minh City, and in the third quarter, this service experienced triple-digit growth compared to the second quarter, based on the average daily order volume - thanks to the continuously expanding business network and the advantage of having a large fleet of drivers. In addition, the number of partners participating in the service in the third quarter increased sevenfold compared to the second quarter.
GrabMart also contributes to the trend of cashless transactions, with 70% of orders on the platform being paid online. Currently, GrabMart is a partner of many major supermarket chains and stores such as BigC, Co.opXtra, Lotte, Farmers' Market, and Dalat Hasfarm.
Since September 2020, Grab has been experimenting with bringing traditional markets onto the GrabMart platform in Da Nang and Hanoi, with initial positive results. The average daily order volume in December 2020 doubled compared to the previous month," said Ms. Nguyen Thai Hai Van, CEO of Grab Vietnam.
GrabMart has digitized the business operations of nearly 100 market traders in traditional markets in Da Nang, Hanoi, and Ho Chi Minh City. Da Nang includes Han Market and Con Market; Hanoi includes Nghia Tan Market, Thanh Cong Market, Ngoc Khanh Market, Huu Tiep Market, Linh Lan Market, Cong Vi Market, and Buoi Market; Ho Chi Minh City includes Hoa Hung Market, Ba Chieu Market, Tan My Market, and Tan Binh Market.
Grab Vietnam aims to increase the number of market traders in these three cities by nearly 10 times by the end of 2021.
The journey is not easy
It can be said that the main goal of Grab in launching the GrabMart service is to digitize traditional markets, something that no other business or platform in Vietnam has done before.
"Convincing market traders is quite challenging. As we all know, when it comes to shopping at markets, people think of bargaining, unstable quality, fixed pricing... But once they are on GrabMart, the market traders have to adhere to Grab's quality and hygiene standards.
In addition to familiar documents such as business licenses or certifications of origin and product quality, we also propose that stall owners in the markets agree to other regulations such as ensuring the freshness of food products, exchanging items if customers request, selling at the correct price, accepting online payments... I also hope that after collaborating with GrabMart, the service quality in traditional markets will be upgraded.
On the other hand, we also have to show market traders what they will gain from Grab by joining. We have a lot of data about users in the area, such as the number of users, shopping behavior, specific daily needs... and we ensure that each market trader participating in GrabMart will see how their specific customer base will increase," Ms. Hai Van shared further.
However, even so, the likelihood of agreement from market traders is quite low, as evidenced by the fact that until now, they have only convinced five market traders from four market areas in Ho Chi Minh City to join GrabMart.
Despite that, Grab is not discouraged. Their plan is to successfully persuade at least 20 small traders from each market to join GrabMart in order to have enough supply to serve users during the Lunar New Year holiday. Once they have enough small traders from each market, they will introduce a "tour-style" service for customers, similar to the traditional market experience of "buying meat from Mrs. Sau but buying vegetables from Mr. Tu." Grab's target audience is small traders who have stalls in the market and legitimate business registrations, rather than uncertain vendors.
This is also good news for traditional retail. With limited resources and low access to technology—lacking both tools and experience in applying technology—if traditional small traders do not receive support from technology companies, they may be "swallowed up" by modern business models.
"We have a few other goals in mind when implementing this model, in addition to bridging the gap between young users and traditional markets. We also aim to expand the customer segment to the age group of 40-50 and serve the future of the central customer base—those aged 30 to 40 at the present time—for the next 10 years," concluded Ms. Hai Van.
In general, Grab is not afraid of challenges because during its initial entry into the market, its situation was even more difficult than it is now. However, they have overcome those challenges and continue to grow stronger," Ms. Hai Van concluded.
With this new "as usual" service, Grab will also use promotions to attract users, with plans to invest about 5 billion VND in supporting media activities and promotions to increase brand recognition for traditional markets on GrabMart.
Source: nld.com.vn
