GRAB

[Choon]

Meituan is profitable in the food delivery. Meituan reported a 4.3% net margin and the latest first half (pre common prosperity law days), Meituan has grown it to 10% margin, see page 17

DeliveryHero has also reported positive EBITDA for its Middle East North Africa and Europe segments

http://media-meituan.todayir.com/2021092...536_en.pdf

I do not know the similarity among China, Europe, Middle East and North Africa; but my suspicion is that these companies have been carefully managing their cost by not over paying freelancers too much, decent commission and not much incentives.

The situation is very unique in South East Asia where all the companies are dangling huge incentives and overpaying delivery riders in their bid to be number 1

I am skeptical about the long-term business viability of delivery platforms. 

My skepticism stems from: 

- a Ninja Van vehicle driver when he drives into a condominium or HDB block, he can delivers many products to many households. There is some efficiency in physics and economics. 

- but how many meals can a Grab rider deliver in a condominium or HDB block for each trip given that customers don like to wait for food? There is no efficiency in physics and economics. For the time and distance spent on delivering only one meal, The Grab rider will need a higher fee per meal than the fee per package for the Ninja Van driver.

But I hope I can be convinced otherwise. Because Local Consumer Services of Alibaba (which includes Ele) is the largest loss business segment of Alibaba. If Local Consumer Services can turn profitable, the boost to Ali's profitability from a loss to a positive 10% margin would be significant.