New Round of Gojek-Grab Battle in Three Services

Writer: Desy Setyowati

Editor: Muchamad Nafi

11/9/2019, 21.03 WIB

Gojek and Grab are racing to raise capital to strengthen their positions in three services and compete with each other to attract customers.

Gojek dan Grab
Katadata

The two Southeast Asian decacorns are not only creating SuperApp but also exploring the potential in their respective businesses. The Gojek-Grab battle reached a new stage in three services: food delivery, payment, and digital content.

Gojek recently launched a brand-new service, GoGames. In the eyes of Gojek Co-Founder Kevin Aluwi, the game market in Indonesia is increasing. “In the coming years, we predict digital and gaming contributions to be essential in the Gojek ecosystem,” he said in Jakarta, Sunday (9/8).

It is indeed a brand-new business for Gojek, but the growth prediction of the service is a new hope. He compared it with the development of online motorcycle taxi and food delivery that took several years.

For this reason, PT Aplikasi Karya Anak Bangsa is raising new funding. Gojek Group President Andre Soelistyo said the company eyes to scoop US$ 2 billion or around Rp 28.4 trillion. The capital round is intended for the development of all business lines. It is expected to be achieved before the end of this year.

Andre talked about this in an exclusive interview with Bloomberg TV. This national decacorn wants to strengthen its payment service and food delivery: GoPay and GoFood. The growth of the two services is quite high. Gojek recorded transactions of around US$ 1.5 billion abroad.

Its rival Grab also took the same step. The company invested US$ 150 million or around Rp 2.13 trillion to adopt artificial intelligence (AI). By implementing technology, Grab wants to strengthen its three services in Southeast Asia.

The three services are food delivery (Grab Food), payment, and digital content. “We want to switch from AI-powered to AI everywhere,” Grab Co-Founder Tan Hooi Ling Tan said in an exclusive interview with Bloomberg TV, Thursday (9/5).

Thus, the battle between the two startups worth more than US$ 10 billion is now centered on the three services.

 

 

Number of App Downloads

Number of Partners

Coverage

Gojek

 155 million

400 thousand GoFood partners, 60 thousand service providers, and more than 2 million drivers in Southeast Asia

207 cities in four countries (and in the Philippines through the acquisition of Coins.ph)

Grab

155 million

9 million (plus agents) in Southeast Asia

338 cities in eight countries

Source: Katadata, processed

Significant Potential in Food Delivery Service

Based on data from ResearchAndMarkets.com, the value of food-delivery service business was US$ 84.6 billion last year. It is predicted to increase to US$ 164.5 billion in 2024. The projection shows that the compound annual growth rate (CAGR) of this business is around 11.4 percent during 2019-2024.

In Asia, Statista data shows that the industry's revenue reached US$ 58.4 million since the beginning of this year. CAGR revenue from delivery service is estimated at 10.5 percent for 2019-2023. This income was mostly earned by China, which was US$ 40.2 million since early 2019.

In Indonesia, Gojek collaborated with 400 thousand GoFood partners. About 96 percent of them are Micro, Small, and Medium Enterprises (MSMEs). Gojek Group Chief Food Officer Catherine Hindra Sutjahyo stated that GoFood grew by seven folds in the last two years.

According to her, GoFood's market share in Indonesia reached 80 percent or four times greater than its competitors. “We use technology to develop GoFood partners, especially on a small scale,” she said recently.

Go-Food Festival
Go-Food Festival (Go-Jek)

GoFood orders for milk coffee and crushed crispy fried chicken noted the fastest growth in the past year. Catherine said the increase was supported by the high number of partners and innovations through several features.

Apart from Indonesia, GoFood exists in Vietnam and Thailand. The national decacorn plans to make GoFood service available in Singapore. Currently, the company is also applying for a permit to operate in Malaysia and the Philippines.

Contribution of Partner’s Earnings to the Indonesian Economy

LD FEB UI Survey

CSIS and Tenggara Surveys

GoRide

Rp 22 trillion

GrabBike

Rp 15.7 trillion

GoCar

Rp 12 trillion

GrabCar

Rp 9.7 trillion

GoFood

Rp 19 trillion

GrabFood

Rp 20.8 trillion

GoLife

Rp 1.5 trillion

Kudo

Rp 2.7 trillion

Total Contributions from Gojek’s Partners

Rp 55 trillion

Total Contributions from Grab’s Partners

Rp 48.9 trillion

Source: LD FEB UI Research Paper, CSIS and Tenggara Research Papers

Do not want to be outdone, Grab plans to strengthen GrabFood service. The Singapore-based company has raised US$ 4.5 billion in its latest funding round, including an investment worth US$ 2 billion or around Rp 28.4 trillion from SoftBank last July.

Grab plans to strengthen its GrabFood Research and Development (R&D) team in Indonesia. It also wants to build a head office in Jakarta, which focuses on becoming the GrabFood business center.

The company is optimistic Indonesia will always be a strategic market. “GrabFood becomes the sign of our operational growth in this country. Besides, we want to double the talent team and strengthen R&D to support business operations,” GrabFood Indonesia Head Demi Yu told Deal Street Asia, Wednesday (9/4).

Grab will focus on creating solutions that support the empowerment of small entrepreneurs and Grab-Kudo agents in Indonesia. The coverage of GrabFood service rose from 13 cities in January 2018 to 178 cities in March 2019. The shipment volume increased by ten times.

Grab Indonesia President Ridzki Kramadibrata previously said the average delivery speed of GrabFood was only 29 minutes. The number of partners rose by eightfold, where 80 percent of them are MSMEs.

Ridzki said the income of driver-partners who provided GrabFood service also grew 40 percent. According to him, the average revenue of partners increased to 88 percent within five months after joining GrabFood.

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