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Gojek starts car-hailing service in Vietnam in challenge to Grab

Written by Nikkei Asia Published on     3 mins read

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Indonesian startup eyes super app status; local player Be expects profit in 2021.

Gojek says it will add car-hailing and e-payments to its operations in Vietnam, one of the key markets in the Indonesian startup’s battle with Singaporean rival Grab.

Vietnamese customers can currently use Gojek to hail motorbike rides, order food, and ship parcels, but will be able to request car rides and pay digitally “very, very soon,” country manager Phung Tuan Duc said.

“Instead of going after the next shiny technology, we focus on what the market needs the most,” Duc told Nikkei in a recent video call, sporting a green Gojek jacket typically donned by drivers. “We feel confident to start expanding, and four-wheel [transportation] and payment are the two most requested [services] from our consumer base.”

With car-hailing, Gojek would add a service already offered by Grab and Vietnam’s Be Group. All three startups are rooted in ride-hailing, but have since expanded into a variety of other services, such as delivery and bill payments.

Grab made waves in April when it announced plans to go public in the US via a SPAC, seeking a valuation of USD 39.6 billion in what would be the biggest-ever deal of its kind. That piled pressure on Gojek to pursue a merger with fellow Indonesian startup Tokopedia, an online retailer. The two companies sought shareholder approval in April and the deal is expected by end of June at the latest, with a planned US listing to follow. Earlier merger talks between Gojek and Grab fizzled after the latter sought key powers in a theoretical tie-up.

As the battle for customers rages across Southeast Asia, Vietnam’s market of nearly 100 million people has opened up further under new regulations. Decree 10, enacted by the government in 2020, lets ride-hailing companies expand beyond a handful of key cities and operate nationwide.

FastGo, Aber and inDriver also run ride-hailing apps in Vietnam, while the biggest domestic player is Be. CEO Nguyen Hoang Phuong said her company would not enter a “price war” with rivals, but focus on quality and corporate partnerships. She said Be broke even in 2020 and aims to turn a profit in 2021, a feat that has yet to be seen in ride-hailing.

“Be Group will invest money wisely instead of needlessly spending money similar to other competitors,” Phuong told Nikkei.

Be partners with VPBank to operate a digital bank called Cake, while also accepting payments in its app for Zalo and MoMo, two Vietnamese e-wallets. Grab has an e-wallet, Moca, and has streamlined its Southeast Asian business to focus on fintech, transport, and delivery, according to the e-Conomy SEA 2020 report by Google, Temasek and Bain.

Read more: Gojek and Tokopedia finally tie the knot to form GoTo

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For Gojek Vietnam, e-payments will be available just for rides in the near term, Duc said, with more options to follow.

When asked if Gojek would be a super app in Vietnam, as it is in its home country of Indonesia, Duc said that is the plan. “Vietnam has definitely the highest priority in terms of all the external markets that Gojek is operating in, and it’s a super-fast-growing market,” he said.

Vietnam, one of the world’s biggest motorbike markets, would join Indonesia and Singapore as countries where car-hailing is available through Gojek, whose business also includes payments in the Philippines and delivery and motorbike-hailing in Thailand.

The e-Conomy SEA report valued Vietnam’s transport and food delivery market at USD 1.6 billion in 2020, and forecasts 34% annual growth through 2025.

SoftBank, Uber, and Didi have invested in Grab, while Facebook, Tencent, and Google back Gojek. Be was seeded with funding from its founders.

Commuting declined across Southeast Asia at the height of the pandemic in March 2020, but has returned to pre-pandemic levels in Vietnam–where lockdowns were minimal–ahead of the rest of the region, Google mobility data showed.

This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.

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