Southeast Asia's Grab plans deeper push into food services

SINGAPORE (Reuters) - Southeast Asian ride-hailing firm Grab is setting up more kitchen facilities for merchants and adding new services such as procurement and analytics in a bid to push deeper into the fast-growing food delivery business.

Grab, the region's most valuable startup, has earmarked food delivery as a major pillar for growth as it expands beyond its taxi-hailing roots into other areas, including financial services.

It is banking on the relatively low penetration of existing food delivery firms in Southeast Asia, and is using its existing network of riders and drivers to build its service.

Grab's food delivery business saw 5.2 times growth in gross merchandise value last year, and nearly tripled its number of active users.

"We are very much in the investment stage with food, and we will continue to grow that. We do believe that ultimately food will help improve our profitability in the long run," Lim Kell Jay, regional head of GrabFood, told reporters on Wednesday.

He spoke as Grab showed off its first so-called cloud kitchen in Singapore, which also has takeaway and dine-in options. Its opening has taken the total number of such kitchens operated by the company to 50 in the region.

Grab did not provide a target, but said it would continue to expand its network of kitchens mainly used for delivery. The firm's regional rival Go-Jek has also been testing out cloud kitchens in Indonesia.

(Reporting by Aradhana Aravindan in Singapore; Editing by Jan Harvey)