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Alibaba & Grab = Data Dominance?
September 15, 2020 News


Editorial Note: The views and opinions expressed in this article are those of the author only.

While I hardly cover business-related events in Disruptive Tech Asean, reports of Alibaba’s planned US$ 3 billion investment in Grab did create some interest. The deal will see the Chinese conglomerate being the sole investor in the funding round and also spending a portion of the funds to acquire some of Grab stock which is currently held by Uber.

Now, what makes this particular deal interesting?

Data, data and more data.

As the largest e-hailing service provider in Southeast Asia, the amount of data Grab holds could potentially be used to generate more insights for both organisations. Apart from e-hailing, Grab is also in the food delivery industry, has its own digital wallet and is also offering a list of other services in their so-called “super app”.

Now, just imagine the sheer amount of data Grab has. The number of insights that can be generated from it is mindboggling. At the same time, we have Alibaba, one of the biggest and fastest-growing companies in the world, who is also known for their enterprise technology, especially when it comes to data management.

Simply put, Grab and Alibaba could end up in possession of data from all the services they provide with the potential of generating more insights to create more demand for more products and services.

While this investment is not confirmed, we wouldn’t be surprised if Alibaba eventually does make a takeover offer on Grab, which is valued at US$ 14 billion, in the future. After all, owning Southeast Asia’s most successful startup would be a dream move for any organisation. Also, a potential tie-up with Grab gives it access to data on millions of users in eight countries. According to reports, one specific plan under discussion is to integrate Grab’s delivery network into Lazada, giving the Singaporean startup access to a wider network of consumers.

However, here is where it can get complicated as well. Regulators, of course, may not be in favour of this as the market will eventually be dominated by just one organisation. We already have heard rumours of a possible merger of Grab and Gojek. The Indonesian ride-hailing provider is also growing exponentially in the country with significant investment pouring in for them as well.

Interestingly, Grab was only recently fined SG$ 10,000 for another data breach by Singapore’s Personal Data Protection Commission (PDPC). Yet, news of Alibaba’s interest in the company will surely bring forward a totally different impact on the company. Perhaps this investment may see Grab take their data a lot more seriously now as well. Interesting times lay ahead indeed.