MORE FROM KrASIA

Analyzing Gojek’s decision to acquire a minority stake in Blue Bird

Gojek took on and later tied up with Blue Bird to conquer the Indonesian market.

One day we might book Tesla as a transpotation option on Gojek's platform. Photo courtesy of Daily Social.

In a regulatory filing on February 14, PT Blue Bird Tbk (Blue Bird) announced that its holding company has sold a 4.3% stake worth IDR 411 billion (USD 30 million) to an undisclosed buyer. Bloomberg named Gojek as the buyer, confirming a rumor that had been circulating since the end of last year.

The public must be questioning the reason behind Gojek’s interest in Indonesia’s largest taxi company. Based on our observation, there are certain points of concern when Gojek, in collaboration with Blue Bird, tries to dominate the on-demand transportation market in the country.

Alliance and innovation

The enemy of my enemy is my friend. Dealing with Grab and the large sum of cash poured into the unicorn by its investors, including electric car development, the adage sounds legit as Gojek took on and later tied up with Blue Bird to “conquer” the Indonesian market.

Grab has been rapidly innovating in Indonesia within the last year by initiating the Greenline taxi service and introducing an electric vehicle fleet with Hyundai as one of its investors.

Rather than face the competition as separate entities, Gojek has decided to ally with Blue Bird and innovate together as a team. Blue Bird has a broad and diversified product line, including BYD and Tesla electric cars. However, the company is still struggling with digital innovation.

On the other hand, Gojek has made advances in digital innovation, including its payment channel, although they lack diversification in their transportation products. They are very dependent on their driver partners’ vehicles.

Blue Bird’s digital transformation

As a publicly listed company, it is clear that Blue Bird’s market capitalization and profits have not improved since its peak in early 2015 (before the high-penetration of on-demand services in Indonesia).

The current value of Blue Bird’s share then was at IDR 12,100. At the time of writing five years later, the number has shrunk to IDR 2,400. It shows the company’s market capitalization has decreased to only one-fifth of its previous value.

BIRD stock exchange in the last 5 years. Photo courtesy of Daily Social.

As the minority owner, Gojek should place its current focus on technology transfer, such as its mapping system, PoI (Point of Interest) determination, and ways of communicating between drivers and passengers.

This collaboration should be the green light, especially for public investors, that Blue Bird can afford to be sustainable and relevant. This is unlike the other taxi companies in the country that flunked in a storm of on-demand services with heavy cash to burn.

Will this become a new trend?

We’ll have to wait and see for the results of a broader partnership between the two companies this year. Gojek has met its match in Blue Bird Corporation, despite its focus on pursuing revenues and profits.

It is too early to speculate the angle of this collaboration, or whether a synergy like this will spark a new trend between technology startups and conventional companies.

The thing is, Gojek has been one step ahead by reeling in Blue Bird, as a taxi company with the best brand value, from the pool of tempting competitors. It is very likely that we will see GoSilverBird or GoBlueBirdElectric options in the near future.

Original article is in Indonesian, translated by Kristin Siagian