Gojek, Indonesia’s largest start-up, said that ride-hailing and transport services around the world have been severely affected by COVID-19 while food delivery has been more resilient—although consumer demand and merchant needs are constantly shifting.
“Consumption has shifted, there’s more interest in ready-to-cook meals now and we’ve been helping to deliver people’s favorite meals in this format,” said Kevin Aluwi, co-founder and co-CEO of Gojek in a recent interview with the South China Morning Post. “Many merchants have historically relied on foot traffic, and so we’ve been helping them to adapt to the new circumstances with different initiatives, online events and promotions.”
Founded a decade ago as a motorcycle ride-hailing call center in Indonesia, Gojek has since evolved into a super app, offering a suite of over 20 services with over 170 million users in Southeast Asia. The region is often seen as the next big e-commerce market to crack after China, with a population of 650 million who are relatively young and increasingly willing to shop and transact online, reminiscent of China’s consumer demographics less than a decade ago.
Gojek, which competes head-to-head with Singapore’s Grab across Southeast Asia in ride-hailing and food delivery, recently held promotions in Indonesia, such as national culinary day, to help its merchants better market their goods to the country’s diverse mix of cultures and ethnic groups.
“In Indonesia, there are many different kinds of dishes and flavors,” said Aluwi. “At Gojek we are very much about helping the long tail of small ‘mom and pop’ stores which comprise around 90% of our orders, as these operators lack the sophistication of big chains.”
Aluwi noted that Gojek can now provide its merchants with a ‘full stack’ offering to help them bring their businesses online—from a payments gateway, marketing and promotion, through to analytics and delivery—all on one app. This diversified offering, said Aluwi, has allowed Gojek to face the recent health crisis with greater resilience.
Gojek, however, has not been immune to the pressures COVID-19 has wrought on regional economies and business plans.
Layoffs and restructuring
Last month the company said it would prioritize its core businesses of payments, transport and food delivery after laying off 9% of staff as a long term response to the pandemic.
GoLife, the company’s massage and home cleaning services, as well as GoFood Festivals, Gojek’s physical food locations, will be closed because they are dependent on close human contact, and have seen a significant downturn over the past few months, said the company in its statement.
Gojek wants to focus on core businesses and services, such as logistics, which has grown 80% since the pandemic began, and grocery deliveries, which have more than doubled in recent months, said the company. Gojek’s announcement came hot on the heels of news from rival Grab that it was cutting just under 5% of staff as a response to a slow recovery from COVID-19.
“The very different circumstances of today definitely sharpens the focus and maybe accelerates some of the things that we have to do to ensure that profitability and sustainability remain a core focus,” said Aluwi.
Asked about the calls for fee reductions by some merchants on China’s massive delivery services platform Meituan during the pandemic, Aluwi said the situation was more nuanced than just fees, as Gojek is able to offer its partners access to its own marketing channels and co-promotion opportunities.
But Aluwi acknowledged that some of the changes engendered by COVID-19 have been positive and will likely stay beyond the health crisis.
“Improved hygiene standards will stay and this is a good thing for the industry,” said Aluwi. “Contactless deliveries will likely stay… and machines that run food though UV light are also interesting.”
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One area that Gojek, which recently concluded a funding round with Facebook and PayPal, is paying close attention to on its platform is banking and financial services.
“Most transactions in Indonesia today are still in cash,” said Aluwi, alluding to the country’s chronic, historic problem of being underbanked. “Many people still do not have access to financial products, such as savings, loans and investments—services which can help to cushion the volatilities of everyday life.”
Aluwi said Gojek was in the beginning stages of making a dent in this area, exploring consumer finance options and helping people move up “the economic pyramid” with its access to millions of individual micro entrepreneurs and customers.
Asked about what has been the main change since taking the company from a scrappy social enterprise with co-founder Nadiem Makarim and others a decade ago to a start-up valued in excess of USD 10 billion today, Aluwi said it has been the emergence of the region as an exciting tech hotspot for entrepreneurs.
“Ten years ago, Southeast Asia was largely seen as irrelevant as a tech destination,” said Aluwi. “Today, it is viewed as the next China or India—a place where transactions take place and not just content consumption. Moreover, some of the problems of developing economies, such as inadequate health care infrastructure, are now being addressed by tech, such as telemedicine, which can scale up limited resources to cover more people.”