FB Pixel no scriptThe next move in the Grab-Gojek battle | KrASIA

The next move in the Grab-Gojek battle

Written by Cindy Silviana Published on   3 mins read

“We can expect a countermove by Grab,” says SEA Founders’ Tomas Laboutka, following Facebook’s investment in Gojek.

Facebook and PayPal are the latest investors in Indonesia’s super app Gojek, joining an illustrious field of existing backers, including Google and Tencent. The new funding will strengthen its financial arm GoPay, which has become the most popular digital wallet in Indonesia.

Analysts and tech experts agree that Facebook and PayPal are choosing the right approach to develop new markets in Southeast Asia, especially Indonesia, the largest economy in the region.

“Facebook has been eyeing an increase of usage for WhatsApp. They are going to push with the super apps and with payments, which have a high frequency of usage,” Tomas Laboutka, founder and director at SEA Founders, told KrASIA. “This is likely to trickle down to further services and further partnerships going down the route.”

For Laboutka, Gojek is the entry gate to a large user base in Indonesia. The company is a significant player that has traction to onboard a sizable amount of users, which previously were not mobile and not banked.

Facebook has been approaching the Indonesian government and local e-money players for some time. Last year, it was trying to launch WhatsApp Pay in the country, according to local media. In April, Reuters reported that Facebook was preparing to seek regulatory approval for a mobile payment service in partnership with GoPay, Ovo, and LinkAja.

A rational move

Integrating WhatsApp with Gojek, would be a rational move, according to analysts, but that doesn’t mean that there will be a significant collaboration in the short term. Willson Cuaca, managing partner and co-founder of East Ventures, doesn’t expect major changes for GoPay’s strategy.

“It is hard for foreign players to directly start a new venture to Indonesia. Through an existing dominant player, it is a good approach and the ecosystem play will make it stronger,” he said.

Aldi Adrian Hartanto, VP of investment at MDI Ventures, doubts that Facebook will exclusively integrate with GoPay. They are likely to be the “preferred payment” solution by having deeper integration with Facebook and provide more ease of use.

venturematterstv episode 2 wavemaker paul santos

“It will certainly drive more collaboration on data and networks, primarily for GoPay, as Gojek will be able to tap into Facebook’s and PayPal’s user base, along with its network of merchants,” said Hartanto.

With the new investors, Gojek will likely gain more strength for the battle with its archrival Grab, not just in Indonesia, but also other Southeast Asia countries. Laboutka says that payment frequency and volumes will be critical for the overall success.

Grab-Gojek battle is heating up

Both companies are fighting each other in many services, most notably in ride hailing, food delivery service, and payment service. He believes that Grab will try to catch up.

“We can expect a countermove by Grab, trying to raise another round to tackle that. I don’t think it’s the final checkmate, it is going to make the battle more interesting,” he said.

Grab continues to invest heavily in new products and markets. Only this week, the company launched a GrabPay card in the Philippines, similar to the product that was introduced in Singapore last year.  Malaysia is likely to follow later this year. Grab also explored a bid for a digital banking license in the country. The firm already applied together with SingTel for a license in Singapore.

Merger talks

There is also still the possibility of a Gojek-Grab merger, if “tentative talks” are becoming more concrete. Hartanto believes that the deal— given the profile of PayPal and Facebook—might help in the “tug of war” between the two super apps.

For Facebook, it was its first investment in Indonesia. Matt Idema, COO of Whatsapp said that it will support Facebook’s and Gojek’s shared goal of empowering businesses and driving financial inclusion across the archipelago.

Since launching its app in 2015, Gojek has brought hundreds of thousands of merchants onto its platform, giving them access to more than 170 million people across Southeast Asia. The payments business processes billions of transactions each year and owns the largest e-wallet in Indonesia.


Auto loading next article...