Go-Jek’s food delivery beats all Indian food startups combined: Piotr Jakubowski

Piotr Jakubowski, CMO of Go-Jek

When one brings up Go-Jek as a conversation, one is not just talking about a tech-based ride-hailing business in Indonesia. Be prepared to also reflect on the whole startup ecosystem in emerging markets, integrated solution, the world, and eventually the meaning of life.

At this point, one might be a little skeptical and wonder: What exactly do they do? Are they a ride-hailing or a retail startup? Is all of this hype really true? Does it really work?

Now let’s admit: the way Go-Jek sees things might leave those outside of Indonesia scratching heads. But for those who have even the smallest inkling of what living is like in this side of the world, it’s a possibility that one might just see why global investors like KKR and Warburg Pincus think that a participation in this particular startup is worth $550 million.

Even among its peers in the Southeast Asia region, Indonesia is unique in the way that it is diverse. Here is an idea of how diverse the nation is as a market: people in towns that are just a two-hour-drive from the capital city speak in different languages. In fact, this archipelago has over 300 recorded distinct languages. Needless to say, the way locals think can be unpredictable, and so are their problems.

Having to continuously adapt to these erratic needs and riddles, Go-Jek’s business model has branched out from a mere motorbike taxis provider to one of the most integrated consumer solutions there is. You name it: ride-hailing, food, courier, groceries, cleaning, body massage and beauty, movie tickets, medicines – Go-Jek has it all.

And now, after successfully angering players in the conventional taxi industry, Go-Jek is quietly taking over giant food startups in the region, disrupting this space.

At the end of last year, Rocket Internet’s Foodpanda had shut down its services in Indonesia and it had said that its services in the country had not “generated the same momentum, and (it) will (instead) concentrate its operations in core markets such as Singapore, Hong Kong, Malaysia, Taiwan, and Thailand.” Not long before that, restaurant discovery site OpenRice downscaled its operations in Indonesia. The Hong Kong-headquartered company was rumored to have shut its office in Jakarta last year, while some employees remain active.

Observers speculated that it could be because of Go-Jek’s food delivery business – Go-Food – which the company says has succeeded in converting customers. Go-Food claims to be the second busiest on-demand food delivery service (in terms of the number of transactions) in the world outside of China.

Go-Jek’s CMO Piotr Jakubowski’s threw in an interesting claim: He said the company’s food delivery arm was recording a higher number of daily transactions than all food startups in India combined. “This has been confirmed,” Jakubowski stated.

With a population of 1.2 billion, India is almost four times bigger than Indonesia. One of the most active and best-funded food startups in India is Swiggy, who is reportedly raising at least $50 million in fresh funding. Competing in the space are also Zomato, Foodpanda India and Runnr. Going by Jakubowski’s argument, the fact that Go-Food’s delivers more food than all these startups combined shows the scale of impact it has on people’s daily lives.

The success of Go-Food and Go-Jek’s mobile payment Go-Pay may have inspired Malaysia’s Grab to follow suit in Indonesia.  In May 2016, Grab Indonesia had announced the launch of a beta version of GrabFood, which let users order food from and to limited areas in Jakarta. Grab never launched the full version.

Instead Grab has stepped up its battle in the payments space with Go-Jek in Southeast Asia’s largest economy. Recently, the Singapore headquartered ride-hailing app acquired Indonesian payment startup Kudo, a step that is seen as being critical to augment its mobile payments platform,

But while Kudo’s payment solution is indeed one of the most advanced among Indonesian startups, the heart of the company lies in e-commerce. Its network houses more than 400,000 authorized agents in 500 towns and cities across the country. This means Grab will access to a sophisticated payments platform as it battles Go-Pay – it will have several hundred thousand of agents to rival Go-Jek’s drivers, and hundreds of merchants to compete with Go-Mart and possibly Go-Food, all in one swoop. Talk about killing two, three birds with one stone.

As a market observer puts it: Go-Jek is fast, Grab is thoughtful. And this battle has just begun.

“In the first 14 months of Go-Jek’s existence from January 2015 until March 2016 (15 months), we completed a hundred million orders of which 15 million were Go-Food,” explained Piotr Jakubowski, in an interaction.

“So right now Go-Food is one of the biggest food delivery platforms in the world with over 85,000 restaurants available in our platform. I can’t give you a specific number but I can give you an idea of the scale: It has been confirmed just a couple of months ago that Go-Food now has more daily transactions than all food startups in India combined,” he added. Edited Excerpts.

Let me start with the recent big news that have been circulating lately: your biggest competitor Grab announcing that it’s buying Kudo, the e-commerce startup, which obviously indicates that there will be a lot more action in the mobile payment industry. Any comments on this move? How do you see this move will further excite the race in payment, and what is your next strategy to battle it?

Well, we have been the key innovator of mobile payments for a long time and the fact that other companies are copying us is actually flattering. When it comes to digital economy in Indonesia growing, payments is a big part of it and with the different types of innovations within payments that we have, we are the first one to have multiple bank partnerships with almost all the banks in Indonesia. We are also the first one that developed direct top up, ATM top up, and mobile top up. As far as I’m aware we’re the first one in Southeast Asia to have top up through drivers. I think it’s the first one in the world even. So when it comes to (payment) innovation we’re definitely, in this specific category, already the leader in the space.

Yes, I heard just recently that Go-Pay had introduced a new feature which lets users transfer credit and even withdraw cash from partnering banks. How has the transformation from cash-based transactions to digital payment been, has it been successful?

It has been interesting. Some recent article mentioned that Go-Pay has become one of the *top four* digital wallets used by netizens in Indonesia. It shows that it is actually becoming a part of people’s daily lives – the ease of doing transactions, the seamlessness of it, especially now that we have peer-to-peer transaction service where you can make transfers using Go-Pay.

I can even show you right now that I don’t carry cash with me anymore. My life is completely cashless. For everything Go-Jek related I use Go-Pay, and for non-Go-Jek related I use my cards. It has never been so easy.

How many users now actively use Go-Pay?

Over fifty percent of our user base now are using Go-Pay within ten months, almost a year, since it went live.

Some data that we found online said that your market share is now at around 60% for the two-wheeler ride-hailing business, meaning that you are currently the market leader, ahead of Grab and Uber. Is this true? What is your strategy to maintain your market share?

I cannot confirm, and to tell you the truth I don’t look at metrics that much. We’re focusing on building a customer base and providing customers the best service they can get, and not just from the transport perspective. Because if you notice one of the biggest innovations and transformations in the last year is that we are the first company to move towards an on-demand platform vs a transportation company.

Once again there’ve been other folks that have tried to copy the things that what we do. And with the ecosystem products that we have, everything from transportation to shopping to food to lifestyle services to payments to loyalty programs, it’s the most complete ecosystem you can find in SEA even though we’re only operating in one country.

From the many services that you provide, other than ride-hailing, which one is the most popular? 

Go-Food and Go-Send. Those are the core services from the beginning. Go-Food was initially just Go-Shopping, and then three to four months after we launched Go-Jek, we split it into Go-Shopping and Go-Food.

So right now Go-Food is one of the biggest food delivery platforms in the world with over 85,000 restaurants available in our platform. I can’t give you a specific number but I can give you an idea of the scale: It has been confirmed just a couple of months ago that Go-Food now has more daily transactions than all food startups in India combined. That has been confirmed.

In the first 14 months of Go-Jek’s existence from January 2015 until March 2016 (15 months), we completed a hundred million orders of which 15 million were Go-Food.

Do you have any projections of how those numbers will be in the near future?

I can’t share the projections because it really depends on the market. The projections of Go-Jek in the very first year of operation were very different to the actual results. When we first operated the initial projection were to hit 30,000-40,000 orders a day, and we were hitting 300,000-400,000 a day.

You received $550 million of investment from KKR and Warburg Pincus last year, two of the biggest PE firms in the world. How has their involvement helped Go-Jek grow so far?

Even though they are not involved in day-to-day decisions, they have given us incredible insights as we try to plan and put together our strategy for sustainable growth and the further development of the ecosystem. So personally, from the marketing side, I don’t really spend a lot of time with them. But the strategy team has been given a lot of feedback (from them).

Correct me if I’m wrong. But Go-Jek, Uber, and Grab are still fighting to keep their competitive edge especially on pricing. It means until now you are still burning money to keep your customers. Do you see a way out of this situation anytime soon? When and how will you initiate a profitable model?

I guess the answer is when the market forces start to align. I know that we’ve been accused of providing low prices, but we’re not the ones that provide free rides. There are other folks who have done that.

We are just going to continue doing what we’re doing, and continue to be the market leader. So really focus on how do we make our consumers lives easier and better with the services that we provide, that’s number one.

Number two is how do we enable and facilitate opportunities for drivers and merchants and everybody else that is part of the ecosystem. If you really think about it, in the Go-Jek ecosystem itself we have more than 250,000 drivers and almost 100,000 merchants. That’s a lot of lives that we’re changing every single day and that’s what we want to really focus on.

There’s a great reference by the Indonesian statistic agency about how the online service ecosystem, which we helped pioneer, lowered the employment rate by half a percent in 2016.

So circling back to what you said: we’re going to focus on customers and focus on changing the world. We’re going to focus on being part of this new wave of business that drives Indonesia into a digital economy.

I guess you could say that brand loyalty could be one of the ways out of this stalemate. What is your strategy to maintain or increase it, from the marketing perspective? How do you think people perceive your brand right now?

Authenticity.

If you take a look at the way we approach our content and the way we do marketing everything is authentic. Just recently we released a set of videos of how our brand ambassadors use Go-Jek showing circumstances in which exactly how they use Go-Jek.  We didn’t create a story for them.

In one video, a big actor in Indonesia Reza Rahardian shows us how he uses Go-Car from and to shooting sets in the early morning or evening, Go-Ride for live interviews or casting, while uses Go-Food in between. In another video, there’s Rio and Artika, a celebrity couple who uses Go-Box to move houses.

So you see, it wasn’t the case of scripted stories and making them share it on their social platforms. We made the videos based on the actual ways they use Go-Jek in their lives.

That’s why authenticity is incredibly important because people… from the branding and marketing perspective, there’s variety of triggers for which people make choices. Price is, of course, one of them but it’s not always the case. If the price was always the case (for loyalty), then we wouldn’t have too much differentiation among products.

So through being authentic and through showcasing the value of ecosystem provides to people’s lives is how we build and maintain loyalty.

Go-Jek is not about getting you from A to B. Go-Jek is about you becoming more productive, and releasing the limits that life puts on you.

In Jakarta for example one of the biggest limits is the traffic. And with Go-Jek you actually don’t even need to worry about it anymore, and not just because you can ride through traffic on a bike – sometimes that doesn’t even work because it’s that bad – but in order for you to get stuff done you can get everything done from wherever you are and you don’t have to worry about it.

Indeed, each of your services is very locally-tailored to the needs of urban Indonesians. What’s your secret? How do you come to the conclusion that, for example, we need Go-Glam? (Go-Glam: Go-Jek’s on-demand beauty service)*

First of all, here’s what explaining what Go-Jek in Indonesia is like to an audience that has never been exposed to it would be:

In December right before the holidays I had to run six errands and all six things needed to be done in six different places in Jakarta. I was curious: how long would it take me if I tried to do it myself? Google Map told me it would take 3 hours and 25 minutes if there’s no traffic (and the last time there was no traffic in Jakarta was in 1930). In reality, it would actually take you two days because something’s in North Jakarta and something’s in South Jakarta. With Go-Jek it took me two hours.

So (getting back to your question), I think it’s just a case of being in touch with what the local needs are, and that’s the prime advantage that we have over the other companies, as we are just focusing on one country that is Indonesia.

From the product development perspective, it just comes down to figuring out in your daily life what are the types of things that can be taken out of your plate to give you more opportunities focus your time on other things. We have a saying here that might seem a little bit far-fetched but true: Money can’t buy time, but Go-Jek can buy you time.

You have more than 250,000 motorcycle and car driver partners, more than 35,000 food merchants and more than 7,000 service providers. How do you recruit your partners and merchants? Do you give training?

For Go-Food they generally come to us and from there it’s a relatively simple process to come in and get listed and be part of the ecosystem.

For drivers, we have recruitment periods and when these periods are open we have a couple of locations in different cities that we are in. Then they go through our recruitment and safety process. We try to balance demand and supply just to make sure that our drivers are earning what they should be earning versus the fluctuations they experience every month.

Do you plan to launch any new services soon? If yes what will they be?

There are a couple of new services in the pipeline, but I can’t tell you because it would ruin the surprise!

What I can tell you is that, in the next couple of weeks, we’re focusing on services in the new cities that we have just launched. Last week we launched in about 10 cities. Once again a lot of our efforts is focusing the best value and service to our customers, whether in Jakarta, Surabaya, Medan, and some other 20 cities that we are in.

Also Read:

Grab follows rival Go-Jek with R&D center in India, adds in Vietnam too

China’s Tencent in talks to invest in Indonesian unicorn Go-Jek

Grab commits $700m to SEA’s largest economy to battle Go-Jek

Indonesia’s transport and logistic startup Go-Jek can teach Uber a few Asian tricks

Go-Jek to deepen range of on-demand services in Indonesia ahead of regional push

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.