Earlier this year, ride-hailing service giant Uber left Southeast Asia to cut potential losses after failing to contend Grab’s force in the region. This leaves ride-hailing service battle between two of the most valuable startups in the area – Singapore-based Grab and Indonesia-based Go-Jek.
Roughly valued at $5 billion or more, according to Bloomberg, Go-Jek appears to be stepping up its competition in Grab’s home country, Singapore.
Go-Jek on Thursday launched a new version (beta) of its ride-hailing app in Singapore. The app’s trial version will allow consumers to book rides, though currently within a limited number of areas in the country. But that has not discouraged the Indonesian company. It’s confident that it’s service will attract riders in Singapore regardless of Grab’s current dominant position.
Global head of transportation at Go-Jek, Raditya Wibowo said the company is hoping to serve users in “hundreds of thousands” before 2019 when it would fully launch the new version of the Go-Jek app which is commencing with a few thousand riders under trial.
Why is Go-Jek so confident?
Go-Jek is partnering with one of Asia’s largest financial service cooperation DBS in its market strategy. DBS could play a crucial role in luring customers for Go-Jek, the bank has millions of customers in Singapore and could use incentives to get them into placing Go-Jek app ahead of other ride-hailing apps. DBS will have a share.
Go-Jek plans to issue promotion codes and in the little details, wants to differentiate itself, Andre Soelistyo, the company’s president, told reporters in Singapore.
We have continued to be the most dominant ride-hailing service provider in Indonesia because we have put up a good fight with two big giants in Indonesia within the past four years of our existence, Soelistyo said. “I think we have some tricks in our sleeves to be able to compete with some of them."
Grab, backed by Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank, earlier this year acquired Uber’s business in Southeast Asia to mark the first largest consolidation in the region. Following the acquisition, Singapore’s competition regulatory body slapped Uber and Grab heavy fines and impose measures that would enable competitors after concluding that the deal had driven up ride-hailing service prices.
Go-Jek’s plan to expand in Southeast Asia
Go-Jek’s home country, Indonesia is the world’s fourth-most populous country, with over 260 million people. The company records over 100 million transactions monthly from its approximately 25 million monthly active users.
Having launched food delivery and motorbike ride-hailing services in Vietnam, the company has pledged to invest around $500 million in the region. Go-Jek says it has plans to launch services in Thailand and Philippines soon.
"We're still in the investing phase, which means that the company is not yet profitable, although some products are profitable," said Soelistyo.
For the past two years, Go-Jek has raised over $2 billion in funding from big names such as Chinese tech giants Meituan-Dianping and Tencent, and Temasek Holdings of Singapore. Google earlier this year invested $1.2 billion in Go-Jek.
On the other hand, Grab has been backed with $6 billion in funding from investors like Toyota, SoftBank, and Didi Chuxing.
Both companies will go head to head as Go-Jek makes an entry into Singapore where Grab’s headquarter resides. Go-Jek’s services are all similar to what Grab offers such as mobile payments and food delivery aside from ride-hailing.