UBS: May ASEAN Food Delivery & E-commerce Growth Moderates but Remains Healthy

Overview

UBS uses UBS Evidence Lab's high-frequency receipt data to track ASEAN internet sector performance, finding that food delivery and e-commerce businesses continued to show healthy growth momentum in May 2026. Although affected by the seasonal fade of Eid al-Fitr and macroeconomic weakness in Indonesia, the year-over-year growth rates of Grab and Shopee moderated from the March-April highs, but absolute growth remained robust. The report believes the current competitive environment is generally benign, with leading players consolidating share through differentiated strategies, and therefore maintains Buy ratings and existing target prices for Grab and Sea Ltd.

Core views

In terms of growth trends, Grab's weighted average food delivery order volume in ASEAN grew 21% YoY in May, down from 26-28% in March-April but still in a healthy range; market share in the Philippines and Malaysia increased by 69 and 136 basis points respectively, with only Singapore seeing a slight 17 basis point decline. Shopee e-commerce GMV grew 20.6% YoY, with order volume growth as high as 28%, showing strong user engagement, while a 5.6% YoY decline in average order value reflected the effectiveness of the platform's shift toward higher-value-for-money products. Regional divergence was significant, with Indonesia becoming the main drag. Grab's food delivery orders in Indonesia fell 2.6% YoY, reflecting weak consumption amid the local macro backdrop; meanwhile, Vietnam, Thailand, and the Philippines maintained high growth of 30-40% or more. Shopee's performance across countries was relatively balanced, with even positive growth in Indonesia, demonstrating the greater resilience of its e-commerce model across different market environments. On the competitive landscape, industry competition intensity rose slightly month-over-month in May. Grab increased discount intensity in most markets (as a percentage of AOV, up 5-140bps) while lowering delivery fees; competitor foodpanda reduced discounts in Malaysia and Singapore but increased investment in the Philippines. On the e-commerce side, Shopee's official subsidies increased month-over-month in Malaysia, Vietnam, and Thailand, while seller-funded promotions rose across all ASEAN markets, indicating pre-peak season warming activities have begun, but overall there are no signs of destructive price wars yet.

Analysis framework

The report adopts a bottom-up high-frequency alternative data analysis approach, relying primarily on consumer electronic receipt data collected by UBS Evidence Lab. This method bypasses the traditional lag of quarterly earnings reports, directly monitoring real-time transaction flows from billions of online transactions to reconstruct companies' true operating conditions. The analytical framework follows the logic chain of "total volume growth → regional breakdown → pricing and competition": first examining YoY and MoM changes in GMV/order volume to gauge business sentiment, then disaggregating by country to identify structural opportunities or risk points (such as Indonesia's macro headwinds), and finally analyzing micro indicators such as average order value (AOV), delivery fee rates, and discount rates to assess competitive intensity and earnings quality. This transaction-granularity-based analysis can capture inflection points earlier than traditional research methods.

Methodology notes

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Decomposing GMV growth into order volume and average order value (AOV) factors

  The report not only focuses on total transaction value growth but also specifically analyzes changes in order volume and average order value. For example, it notes that Shopee's GMV growth was primarily driven by 28% order volume growth, while the 5.6% decline in AOV reflected adaptation to consumption downgrading trends. This decomposition helps determine whether growth comes from real demand expansion or mere price increases, and is a core method for evaluating the quality of internet company growth.

• Competition and Strategy FrameworkMoat / competitive advantage

  Validating competitive barriers through market share changes and unit economics

  The report uses receipt data to calculate market share changes for various platforms in different countries (such as Grab's share gains in the Philippines/Malaysia), and combines changes in discount rates and delivery fee rates to assess whether competition is rational. When leading players maintain share without triggering industry-wide subsidy失控, this is seen as a signal of a solid moat, which is a key qualitative basis supporting long-term valuations.

• Valuation MethodSOTP Sum-of-the-Parts Valuation

  Applying sum-of-the-parts valuation to diversified business groups

  As Sea and Grab's businesses span e-commerce, food delivery, fintech, and other segments, the report explicitly uses the SOTP method, benchmarking against comparable company multiples in different sub-sectors (such as EV/GMV, P/S) for independent valuation before summing. This avoids the problem of a single P/E ratio being unable to accurately reflect complex business model values, and is an industry-standard practice for internet conglomerate valuation.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Grab (GRAB.O)

  Core beneficiary: robust food delivery growth with continued share gains

  Strengths

  Pan-ASEAN food delivery leadership firmly established; affordability strategy effectively drives structural growth; significant share gains against competitors in Philippines and Malaysia

  Weaknesses

  Indonesia market orders turned negative YoY, significantly impacted by macro environment; slight market share loss in Singapore

  Comparison

  Compared to foodpanda, Grab adopted more aggressive pricing strategies in most core markets and achieved share returns

  Risks

  Regulatory risks (data privacy, digital finance); macroeconomic downside; competition from offline and global players; execution risks from business complexity

• Sea Ltd (SE.N)

  Core beneficiary: e-commerce growth leads and competitive moat deepens

  Strengths

  Shopee GMV growth consistently above industry average; logistics network and ShopeeVIP form differentiated competitive advantages; scale effects emerging

  Weaknesses

  Declining AOV reflects reliance on low-price strategy; gaming business heavily dependent on Tencent publishing

  Comparison

  Compared to regional e-commerce platforms, Shopee has greater advantages in logistics infrastructure and user stickiness across ASEAN

  Risks

  Regulatory policy changes; uncertainty in ASEAN and global economic outlook; competition with Amazon, Alibaba and other giants; relationship risk with major shareholder Tencent

• GoTo (GOTO.JK)

  Related observation: Indonesia local leader but facing macro headwinds

  Strengths

  Indonesia local ecosystem synergies; dual presence in ride-hailing and food delivery

  Weaknesses

  Operating in Indonesia where macro environment is weakest; facing fierce competition from international players like Grab

  Comparison

  Directly competes with Grab in Indonesia food delivery market, but recent order growth under pressure

  Risks

  Indonesia-specific regulatory and macro risks; competitive squeeze from Grab, Sea and others; execution difficulty of multi-business integration

Key data

• Grab ASEAN Food Delivery Order Growth+21% YoYMay YoY growth, moderating from 26-28% in March-April but maintaining double-digit growth
• Shopee ASEAN E-commerce GMV Growth+20.6% YoYMay YoY growth, with order volume growth reaching 28% and AOV down 5.6% YoY
• Grab Indonesia Food Delivery Order Growth-2.6% YoYOnly negative growth market in ASEAN, reflecting local macroeconomic weakness
• Grab Philippines/Malaysia Share Change+69/+136 bpsMarket share gains vs. foodpanda in May
• Grab Target PriceUS$5.9Maintain Buy rating, based on SOTP valuation
• Sea Ltd Target PriceUS$125Maintain Buy rating, based on SOTP valuation

Impact & implications

For investors, May data validates that ASEAN internet leaders' growth resilience has not been eroded by short-term macro fluctuations. Grab's 'affordability' product strategy has successfully expanded total addressable market (TAM), allowing it to gain share even amid headwinds; Shopee, leveraging logistics scale and ShopeeVIP membership, has built differentiated moats and continues to outperform the industry. Although Indonesia market weakness warrants close attention, the overall rationalization of the competitive environment means these companies' earnings improvement paths remain clear. The maintained Buy ratings indicate that institutions believe current valuations do not fully reflect their structural growth potential.

Risks

• Regulatory risk: policy changes in data privacy, cybersecurity, online content, and digital financial services
• Macroeconomic risk: slowing ASEAN and global economic growth may suppress consumer demand, especially with Indonesia market already showing weakness
• Industry competition risk: intensifying competition from offline retailers, local champions, and global internet giants such as Amazon, Alibaba, and Tencent
• Key relationship risk: Sea's gaming portfolio heavily dependent on Tencent publishing, with Tencent as a major shareholder
• Execution risk: operational management and strategic implementation challenges as business scale expands and complexity increases

What to watch

• Indonesia macroeconomic indicators and consumer confidence recovery
• Monthly trends in discount rates and delivery fees across platforms to judge competitive direction
• Grab affordability product line penetration and conversion effectiveness in new markets
• Shopee VIP member retention rate and its impact on repurchase frequency
• Pre-sale performance data for upcoming major promotional seasons (e.g., 6.6, 7.7)