LAUSANNE, SWITZERLAND (Reuters) – Gojek and Tokopedia, Indonesia’s major ride-hailing and ecommerce startups, announced their intention to join in May 2021, creating the world’s fourth most populous country’s largest technology conglomerate. The newly formed company, GoTo, might be worth up to US$18 billion. It will be Southeast Asia’s first platform to integrate e-commerce, on-demand services, and financial services.
READ: Indonesia’s Gojek and Tokopedia have merged to become a tech behemoth
But it’s not just the merged entity’s size that’s amazing. GoTo is quickly establishing itself as a force for innovation. In 2010, Gojek was founded in Indonesia to meet the growing need for urban transport in Indonesia, Thailand, and Vietnam. Where it began as a contact center linking clients with cabs, it has since grown into a ride-hailing behemoth – Southeast Asia’s Uber. In 2015, Gojek established its own mobile app to satisfy creator Nadiem Makarim’s bigger vision of giving consumers with a one-stop platform for their everyday needs, similar to how Uber expanded the utility of its fleet by launching the food delivery service Uber Eats.
READ THE FOLLOWING ARTICLE: COMMENTARY The merging of Gojek and Tokopedia should have happened years ago. THE TRANSFORMATION OF GOJEK INTO A SUPER APP GoRide (ride-hailing), GoSend (parcel delivery), and GoMart were the first three services offered by the app (online shopping). It added GoFood, a food delivery service, in April 2015. The Gojek app surged by 900 percent in the first 18 months following its launch. Gojek was receiving 300,000 orders per day across all of its services in late 2015, but by 2018, that number had risen to 3 million.
It didn’t end there, though. Massages, online payments, movie tickets, games, and even a reward program were among the new services it added. Gojek has grown into a “super app,” with over 20 services available on the platform. However, this put it in direct rivalry with Grab, Southeast Asia’s other mega app, which specializes in auto hailing, mobile payments, and food delivery.
On September 30, 2020, a Grab food delivery cyclist inspects his bicycle outside a fast food business in Singapore. (AFP/Roslan Rahman photo)
Gojek, on the other hand, recognized the opportunity for partnership. Reports of a possible merger with Grab surfaced in early 2020. Concerns were raised that the merged companies would create a monopoly in ride-hailing, food delivery, and online payments. Indonesian drivers were concerned about the impact of the merger on their livelihoods.
Grab and Gojek were unable to reach an agreement on the post-merger company’s ownership.
However, Gojek later found a wonderful partner in Tokopedia, which compliments Gojek’s main business while also expanding its reach into Indonesia.
READ THE FOLLOWING ARTICLE: COMMENTARY Could a S$1 increase in the ride-hailing price damage Grab more than it realizes? READ: A Gojek-Tokopedia merger might have repercussions for regional unicorns like Grab and Sea. COMPLIMENTARY SERVICE FROM TOKOPEDIA STokopedia was launched in 2009 in Indonesia. It’s a customer-to-customer marketplace inspired by China’s expanding e-commerce business, specifically Alibaba’s Taobao. Alibaba and other investors invested US$2.2 billion in Tokopedia in 2017 and 2018. Alibaba was Tokopedia’s second largest stakeholder before the merger with Gojek. Tokopedia had previously attempted to complete its own ecosystem by investing in logistics firms, collaborating with payment service providers, and establishing an artificial intelligence center to forecast consumer purchasing behavior. Tokopedia claims to service 99 percent of Indonesia’s districts and offers more than 42 digital products that make many people’s life easier. Users can also purchase gaming vouchers, train and event tickets, and make payments using Tokopedia.
On Friday, Oct. 23, 2020, a man checks his phone as he sits among physical distance markers before the start of a movie at CGV Cinemas in Jakarta, Indonesia. (Photo courtesy of Tatan Syuflana of the Associated Press)
A merger with Gojek generates equal value for both parties, given Tokopedia’s penetration into the Indonesian market and range of e-commerce services.
GOJEK’S BRILLIANCE
Gojek has consistently been named one of Asia’s most innovative startups.
The focus on customers is what has made Gojek so successful. The app has long positioned itself as a one-stop shop for all of their customers’ problems. Gojek has enhanced customer retention by providing a diverse range of products and services. Cross-selling services on its platform helped it save costs as well. Innovation encompasses not simply technology and products, but also innovative approaches to addressing customer pain areas that do not necessitate huge technological advances. READ: Why Grab, Gojek, Tokopedia, and Sea are the New American Market Darlings Gojek began with modest motorcycles and provided options for its riders to complete additional duties, like as food delivery, in order to maximize their time. It essentially established an expedited delivery network before expanding into other locations. Gojek is developing an ecosystem by integrating with Tokopedia. It creates more customer data and insights as it grows in size. The company can utilize this information to provide more relevant services in a faster and more responsive manner than competitors who do not have access to this information. READ: One of Big Tech’s most vehement critics is now a regulator. This has ramifications for users all across the world. It may appear dangerous for a corporation to invest in an emerging market. Ecosystems closely reflect the state of the economy as a whole. Homegrown businesses, on the other hand, tend to outperform since they are familiar with the local language, culture, and infrastructure. Local enterprises such as Alibaba, Didi, Meituan, and Bytedance, for example, dominate China. Indonesia and Southeast Asia are no exception. GoTo is positioned to grow in lockstep with the world’s largest emerging market, thanks to a wealth of offerings tailored to the Indonesian market. The Asian Innovation Strategies program is administered by IMD Professors Mark Greeven and Patrick Reinmoeller. Yunfei Feng is a co-author of Mark’s book The Future of Global Retail and a lead researcher on Asian innovation./n
