Indonesian decacorn Gojek contributed a total of IDR 104.6 trillion (USD 7.1 billion) to its home country’s economy in 2019 and its digital ecosystem therefore provides economic security, according to research from the University of Indonesia’s demographic institute (LD FEB UI).
The analysis was based on Gojek’s five business verticals GoFood, GoPay, GoSend, GoCar, and GoRide, before the COVID-19 pandemic. One component comes from Gojek’s partners—drivers and merchants—which amounted to IDR 87.1 trillion (USD 5.9 billion) and reflects their positive income difference after joining Gojek.
Then there’s also the multiplier effect for micro, small, and medium enterprises which added up to IDR 17.5 trillion (USD 1.2 billion). Those didn’t join Gojek’s platform themselves, but experienced higher transaction volumes after Gojek started to operate in their area.
These MSMEs benefit from services used by Gojek’s partners, such as drivers repairing their vehicles in small service stations, or GoFood merchants buying more ingredients as their orders increase. 33% of them claimed to be able to open new business branches.
The number almost doubled compared to an earlier study in 2018, which calculated a contribution of IDR 44.2 trillion (USD 3 billion). This previous research didn’t yet include the logistics service GoSend and GoPay.
According to LD’s vice director Paksi Walandouw, the 2019 surge was due to increased revenue of its partners, especially GoFood, and ecosystem expansion. “This shows that the digital platform can let the economic wheel spin faster,” he said.
Gojek now counts more than two million drivers for its transportation and logistics services, around 550,000 merchants, and 170 million app downloads. Its service is available in 203 cities and districts across Indonesia.
Easing up digital transformation
Another finding from the research shows how Gojek’s digital economy ecosystem assisted people to survive during the economic crisis. LD’s researcher Alfindra Primaldhi said that the company is easing the offline-to-online migration process by covering orders, delivery, and payment in one system.
“The technology available in the Gojek system made it easy for people to start a business. They don’t need to think about logistics or the payment system. The barriers to entry are lower,” Primaldhi said.
As the pandemic hit the country’s economy, 3.7 million people lost their jobs and most of them turned to online selling for income. Since March, Gojek saw an increase of small food merchants boarding its platform, with 40% saying that they are new and have no entrepreneurial experience.
“New merchants who don’t have previous business experience nearly doubled compared to before the pandemic,” Primaldhi said. “This shows how useful GoFood is in accommodating digital home businesses.”
Gojek’s integrated system also enables users to help each other. Transport drivers who were unable to take orders due to social restriction measures in most areas received help from GoFood merchants in form of bonus food and beverages, from consumers in form of tips, and even Gojek itself through various aid packages covering insurance and staple foods, among others.
Gojek said that since the start of the pandemic, it has helped more than 120,000 MSMEs in Indonesia to digitize and remain resilient amidst unprecedented circumstances.
“With the growing importance of digital services and payments, our mission is more critical than ever before, and we remain focused on being a digital enabler for all those within our ecosystem and beyond,” a spokesperson told KrASIA.
LD FEB UI is the largest community of academic researchers at the University of Indonesia, one of the largest academic institutions in Indonesia. It deployed a quantitative method through face-to-face interviews to evaluate Gojek’s economic contribution in 2019. Research for the COVID-19 pandemic impact was conducted through online surveys. Respondents were picked by simple random sampling from Gojek partners who were active in the last three months, mostly operating in Jakarta and its nearby satellite cities.