Singapore-based superapp Grab’s on-demand services, including ride-hailing and delivery, facilitated a substantial economic contribution of MYR 9.9 billion ($2.23 billion) to the Malaysian economy in 2023, approximately 0.5 percent of the country’s gross domestic product (GDP), EconWorks revealed Monday.

The Malaysian economic consultancy said in its new report that for every MYR 1 ($0.23) in value added directly generated by Grab and its partners, an additional MYR 1.50 ($0.34) was generated for the broader economy via multiplier effects.

88 percent of this value added contribution comes from Grab’s driver- and merchant-partners who operate across the different Grab services.

In 2023, driver-partners contributed MYR 4.6 billion ($1.04 billion) in value added, accounting for 0.25 percent of Malaysia’s GDP.

MYR 1.8 billion ($406 million) is the direct value added impact from driver-partners transporting passengers and delivering meals and parcels to fulfil orders by users of the Grab application.

MYR 1.6 billion ($361 million) is generated by indirect effects, primarily from the additional sales of petroleum, vehicle maintenance services, and other inputs used by
driver-partners in providing their services via Grab.

MYR 1.2 billion ($271 million) in induced effects is unlocked when driver-partners and employees in the firms that supply them make additional personal purchases from their incomes.

Overall, driver-partners generate nearly half of the total value added from Grab-related activities through the income opportunities they receive on the platform, highlighting their crucial role in the Grab ecosystem.

This is due to the large number of driver-partners operating in Malaysia and their purchasing activities.

Meanwhile, Grab’s ecosystem supported up to 277,237 earning opportunities, providing income streams for driver-partners, merchant-partners, and workers in their combined supply chains.

This means that 1 out of 64 individuals in Malaysia’s labor force benefit, directly or indirectly, from Grab-related activities.

Earning opportunities enabled by Grab have contributed an additional MYR 3.7 billion ($834 million) to household incomes.

This increase in earnings by driver-partners and merchant-partners translates into more money in the pockets of Malaysians.

Meanwhile, merchant-partners are also a vital component of the Grab ecosystem, delivering almost 40 percent of the total value added contribution to the Malaysian economy.

The additional sales from merchant-partners, whether restaurants on the GrabFood platform or retailers on GrabMart, deliver this component of the value added
contribution.

In 2023, merchant-partners contributed MYR 4.2 billion ($947 million) in value added, accounting for 0.23 percent of Malaysia’s GDP.

MYR 1.7 billion ($383 million) of this is the direct value added impact from the Grab-enabled sales of merchant-partners.

MYR 1.4 billion ($316 million) comes from indirect effects that arise as merchant-partners purchase more materials and ingredients from their suppliers to cater to Grab-enabled sales.

MYR 1.1 billion ($248 million) in induced effects is generated when the workers in merchant partners and their suppliers spend more in the economy as a result of their
higher incomes.

“Tech platform companies provide access to flexible earning opportunities and support the digital growth of small businesses,

“In its twelve years of operations in Malaysia, Grab has significantly contributed to the economic benefits for various communities across Malaysia,” said Dr. Wan Khatina Nawawi, Managing Director, EconWorks.

“For every MYR 1 ($0.23) generated by Grab transactions, an additional MYR 1.50 ($0.34) of economic activity is created across the broader economy,

“This underscores the positive impact of the Grab ecosystem on millions of Malaysians in their daily lives,” he added.

According to the report, Grab’s operational activities also deliver significant economic benefits via the employee salaries of Grab and its suppliers, as well as the profits of firms across different levels of the supply chain.

In 2023, this amounted to MYR 1.1 billion ($248 million) in value added, accounting for 0.06 percent of Malaysia’s GDP.

MYR 500 million ($113 million) of this is the direct value added impact from Grab’s Malaysia-based operations in providing corporate and technology services for the
platform.

MYR 400 million ($90.24 million) is generated by indirect effects from the increased business activities of Grab’s suppliers.

This includes firms selling equipment and providing business services (accounting, consultancy, administrative support) to Grab.

MYR 300 million ($67.78 million) in induced effects is generated when workers in Grab and its supplier firms spend their incomes on additional purchases of goods and services for their personal use.

“The report highlights the advantages of Malaysia’s supportive business environment, which is now focused on the digital economy, enabling platform companies like Grab to thrive and contribute meaningfully to the economy,

“By quantifying these contributions, this study provides a comprehensive view of how Grab and its stakeholders interact with the broader Malaysian economy, facilitating economic growth,” concluded Dr. Wan Khatina.

The report also showed the economic activities that Grab supports in Malaysia extend across a wide range of sectors, reflecting the multi-faceted nature of Grab’s mobility and delivery services.

Due to the multiplier effects, consumer spending on the Grab platform supports businesses and earning opportunities across transport and vehicle-related, food-related, retail and other services (such as insurance, finance, business and professional services, and warehousing) sectors.

Grab is a superapp in Southeast Asia, operating across the delivery, mobility, and digital financial services sectors.

It serves over 700 cities in eight Southeast Asian countries – including Malaysia.

Maybank foresees positive synergy from potential Grab-Gojek merger