Indonesia’s ride-hailing giant Go-Jek is said to be in the process of recruiting professionals in Vietnam to drive its entry into its second market in the Asean region, according to industry sources aware of the development.
With a population of around 93 million and about 45 million motorbikes owned in the country, Vietnam is seen as an alluring market for bike-hailing services. It is also a lower cost option for expansion when compared to neighbours Singapore and Malaysia.
Go-Jek declined to comment on the matter when contacted for confirmation.
Late last year, Go-Jek had identified the Philippines as the first country in the region where it will set up operations in. It also told Reuters at the time that “almost all Southeast Asian countries are on the radar over the next three, six to 12 months”.
In October last year, Go-Jek founder and CEO Nadiem Makarim announced plans for the startup to operate in four other member countries of the Association of the Southeast Asian Nations (ASEAN) but did not specify the targeted countries.
Apart from Indonesia and the Philippines, Southeast Asia comprises Malaysia, Singapore, Laos, Vietnam, Cambodia, Brunei, East Timor and Myanmar.
Vietnam would be the third market overall for Go-Jek as it already holds a stake in Bangladesh’s ride-sharing app Pathao.
Go-Jek’s Southeast Asia expansion will see the startup attempting to seize a share of the regional market of around 600 million people from existing players Uber Technologies and Singapore-based Grab to lure customers in the Southeast Asian market, home to 600 million people.
In Vietnam, Uber and Grab have started to dominate the domestic ride-hailing market, while a few local players have also delved into the market. In 2016, the two ride-hailing companies were given permission by the Ministry of Transport (MoT) to carry out a two-year pilot program of their service, while the authorities try decide on their stance in regards to such disruptive technology in the country. Recently, the pilot period was extended until further notice.
The arrival of Uber and Grab has prompted local players to compete in the market. Local telco company Viettel Telecom, for example, has signed a comprehensive strategic co-operation agreement to purchase 30 per cent of Vietnamese transportation startup Gonow, officially joining the online ride-hailing market. The local startup, however, focuses on car-rental services for tour-travel trips and inter-province trips.
Other local players in Vietnam’s ride-hailing market include 123Xe Vivu, Rada, iMove, and Go-ixe.
For Go-Jek, the market will also provide a good opportunity for the startup’s prided fintech platform, Go-Pay, as Vietnam currently has no clear leader in the fintech space. The unicorn has two digital ecosystem builders – Google and Tencent – among its backers who bring expertise from the West and China, while Go-Jek itself is a major force in the payments space in Indonesia.
Go-Jek is flush with funds for expansion. Indonesia’s first and biggest unicorn recently raised over $1.5 billion in a fundraising round, about 25 per cent more than it planned to, from a dozen investors including BlackRock and Google at a $5-billion valuation. Go-Jek confirmed early in February that it has secured a $150-million funding from local conglomerate Astra International as well as an undisclosed amount of financing from investment firm Global Digital Niaga (GDN) as part of the round.
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