Grab reduces commission

Grab Thailand has reduced the commission fee collected from food merchants to accommodate rising demand for food delivery. (Photo by Arnun Chonmahatrakool)

Grab Thailand has reduced the commission fee collected from food merchants from 35% to 30% to accommodate rising demand for food delivery in amid the pandemic.

The move became effective yesterday as a part of "GrabCares", a campaign meant to assist the public during this difficult time.

“Starting from April, GrabCares is meant to alleviate the impact of the pandemic on the community,” said Tarin Thaniyavarn, country head of Grab Thailand.

The commission fee reduction will not apply to merchants operating in GrabKitchen, a cloud kitchen run by Grab. This will help reduce the financial burden on merchant partners, Mr Tarin said.

In early March, Grab added an additional 20 baht charge for orders under 70 baht. This remains unchanged.

Grab explained the move should encourage users to order more, raising commercially viability for merchant partners. The move should also create more revenue for delivery partners, said Grab.

The app aims to accelerate the merchant sign-up and onboarding process. Grab's support team size has been doubled to accommodate GrabFood services.

With merchant applications tripling to over 2,000 every day, Grab Thailand is gearing up efforts to handle applications within 7-10 days, up from an average of 14-21 days.

According to Mr Tarin, GrabFood has expanded services to eight provinces in the first quarter, covering Chon Buri, Rayong, Nakhon Pathom, Surat Thani, Nakhon Si Thammarat, Lampang, Uttaradit and Maha Sarakham.

Nine more provinces are queued for further expansion by June, including Ratchaburi, Phetchaburi, Surin and Nong Khai.

Grab also launched the “Support Local Restaurants” campaign intended to promote smaller brands on GrabFood, hoping to boost their sales by at least six times.

He said for March 26 to June 30, Grab is offering discounted food delivery fees to officials from the Department of Disease Control, physicians, nurses and healthcare workers from health organisations, as well as seven public hospitals.

In the first quarter, Grab drew in more than 29,000 new delivery partners and plans to recruit 35,000 more partners in April to serve rising demand for delivery services.

In partnership with Central Food Retail Group, Grab launched GrabMart on March 27, where users can find and purchase daily essentials online from over 230 FamilyMart branches. The service will soon expand to include Tops Deli.

In another development, Somsak Kiatchailak, secretary-general of the Office of Trade Competition Commission, said yesterday his office is inspecting the trade behaviour of online delivery providers as well as other trade practices that may violate the Trade Competition Act of 2017.

If business operators collude to set service charges deemed to cause market dominance, or reduce or restrict competition, they could face a jail term of two years or a fine of up to 10% of the annual revenue in the year of violation, or both, Mr Somsak said. Violators who conduct unfair trade practices that damage other operators are also subject to the 10% fine.

The move followed complaints that some food delivery providers have hiked their commission fees collected from merchant partners from 20% to 35-40% and sought to collect other service fees, including promotion charges.