It’s getting a bit old, but here we are: another newsletter that talks primarily about Go-Jek and Grab.
These two apps are endlessly fascinating if you follow the rise of platform businesses. They are true pioneers. The way Go-Jek and Grab evolved from Uber-like ride-hailing to become “super apps” that include mobile payment, shopping, and on-demand concierge features was a first in the world. Calling them Southeast Asian versions of Uber is now false, because Go-Jek and Grab are on track to more closely resembling China’s super app WeChat.
Between the two — this has to be acknowledged — Go-Jek was the more radical innovator.
Grab took a conservative path from taxi aggregator app to ride-hailing. For a long time, it seemed satisfied to be known as the on-demand transportation app in the region. Meanwhile, in Indonesia, Go-Jek was growing into a multi-tentacled beast of a startup with so many services it was hard to keep up. You could go-jek a masseuse, buy tickets, rent a truck, and of course order food, which many did (among other things). Much later, Grab declared its ambition to become a super app that would let all kinds of different services plug into its network.
In the way the apps solved payments, Grab was a step behind Go-Jek, too. Grab was mimicking Uber, opting to first make it simple for credit card owners to link up their cards and then forget about payments altogether.
Go-Jek never prioritized cards. It went after mobile money: a mobile wallet within the app that users could charge with a certain balance and then spend from there until it needed to be topped up. In Indonesia, where few people own credit cards, and where even those who do mistrust using them online, this proved to be the right strategy.
It took Grab a while until it came up with a solution. Now Grab partners with Ovo in Indonesia, a third-party mobile wallet. (I recently wrote a side-by-side comparison of the two payments systems).
Writing this, a question crept up. Could Go-Jek be falling a step behind here because it’s too focused on itself?
It took Grab a while to get it together with payments, and this gave Go-Jek’s Go-Pay a head start. Ovo’s user experience in the early days was pretty bad, but now it’s similar to Go-Pay – a key advantage, however, is that you can use Ovo credit elsewhere, not just in Grab’s ecosystem.
Go-Jek owns Go-Pay and hasn’t spun it out into a standalone app. That’s a pattern: Go-Jek tends to own the services it offers, which means recruiting, training, and managing contractors for services as diverse as home cleaning and auto mechanics.
Grab lets Ovo plug into its platform and is setting itself up for more collaborations of this kind. Its grocery shopping service, for example, is handled by HappyFresh – a startup that has already gained years of experience with this.
Go-Jek had its own grocery shopping service – it simply sent the drivers from its rider network into the supermarket to get the task done. This process was prone to miscommunications and Go-Jek recently halted the service and is currently re-organizing it.
Maybe it will relaunch with a grocery delivery partner of its own – Link-ups with Blibli’s groceries offerings could be an option. Blibli (part of the Djarum conglomerate) is a Go-Jek investor.
And maybe Go-Pay’s network effects are already so strong that other offline and online merchants will come to realize there’s no way around it and have to plan for Go-Pay acceptance – whether they’re already part of another mobile wallet network or not. But honestly, I don’t think so. Mobile payments by QR code are still such a tiny fraction of overall transactions, I doubt anyone can say they have a significant upper hand here at this stage.
However, Grab’s platform strategy seems carved out and clear and Go-Jek’s future looks a bit murkier now. It launched new brands and apps in Vietnam and Thailand. It’s dabbling in film production. Maybe Go-Jek is just a step ahead of everyone else again.
Tech around Indonesia
Indonesian online travel agent Traveloka rarely makes headlines and tries to fly below the radar as much as it can. Big fundraisings don’t go unnoticed however and apparently, the company is seeking another US$400 million to grow its business.
Online marketplaces like Tokopedia and Bukalapak may inadvertently become extended arms of the tax office. The government is considering ways to force online merchants to disclose their transactions for accurate tax collection. Micro and small businesses, of which there are many in Indonesia, traditionally have operated outside of the tax system (it’s called the informal sector). Forcing them to formalize might hurt Bukalapak and Tokopedia’s business – after all, there are alternatives, such as selling on WhatsApp or other social channels where there’s no visible transaction record. But maybe a compromise can be reached where only businesses who have reached certain transaction thresholds are targeted.
The account @jekO_Online, which tweets from the perspective of GrabBike and Go-Jek motorcycle drivers, recently posted a thread showing photos from a GrabBike rest area in Jakarta. The area has a canteen, a motorbike repair shop, a hairdresser, mobile phone shop, a sleeping area, a mosk, and even a “helmet spa” to restore icky helmets… Grab received a lot of praise for this. Go-Jek doesn’t seem to have a similar driver’s lounge yet.
Things to read
If there’s one thing you read in the past week, it’s probably the Bloomberg story “The Big Hack”.
But even more interesting was the debate that followed. Apple and Amazon outright denied the Bloomberg article is true. Some people with expertise in hardware argued that even if that chip was implanted, it would be too tiny to have the capacity to cause the kind of damage described. TechCrunch has a good summary of where we’re at now, a few days after the revelations.
Nadine Freischlad is a Jakarta-based journalist, writing about technology, business, culture, and other things. Follow her on Twitter @texastee
Disclaimer: DEALSTREETASIA is not responsible for the facts produced in this piece owing to it being a reproduction of a newsletter without editorial cuts.