While the focus have been mainly drawn to the growth of platforms in the developed countries, little was known about the rise of technological platform disruption in the developing countries. This post will focus on the phenomenon of hail-riding services provider, G0-Jek in Indonesia.
Founded in 2010 by Nadiem Makarim, a Harvard Business School graduate, Go-Jek quickly became a huge economic phenomenon in South East Asia. What is the story behind GO-JEK?
GO-JEK is a motorbike courier business provider that connects two distinct groups, the drivers and the customers. The traffic-clogged streets of Indonesia have created a momentum for GO-JEK to perish. While taxi or any car-based couriers provide comfortable ride four-wheeled vehicles, Go-Jek offers speed and flexibility to its customer at lower cost. The trade-off between comfort, cost and speed was evident.
With a huge internet-oriented consumer based and growing level of consumerism in Indonesia, Go-Jek has disrupted the market by combining technology and logistics. As of today, GO-JEK has transformed its business model into a multifaceted service delivery & app-based service provider that connects more than 35,000 food merchants, 3,000 service providers with drivers and users. Users can interact and order Go-Jek’s service through their app, which has been downloaded by 17 millions time up until to 2016.
However, Go-Jek’s path is not without obstacles. With the intensified competition from fellow hail-riding provider, Malaysia’s Grab, that is backed by China’s Didi Kuaidi, it has put Go-Jek at unfavorable position. Moreover, the Indonesian government has recently established an operation restriction for ride-hailing providers, following the protest from the taxi driver nation wide.
In order to strive against the competition, Go-Jek has recently received $550 million USD from American private equity firm Warburg Pincus and KKR. This additional funding is needed to expand the business and innovate in another areas. Recently, Go-Jek has acquired India’s healthcare startup, Pianta. In which will be integrated with Go-Jek’s branch to support for Go-Jek Indonesia’s operation. The branch will focus on product innovation, data mining and finding out ways to improve Go-Jek’s customer experience.
While technology provides the means to tap into emerging and developing markets such as Indonesia, it is not a solution on its own. One should also take into account that while the developing countries in Asia might have growing consumer base, but the access to technology is still under-developed. Not everyone is guaranteed to have access to internet. On top of that, there is a huge income gap in the societies. Technology-based startups and platforms should also take into account the cultural differences between each region and the other and how to bridge those gap.
References:
http://economictimes.indiatimes.com/small-biz/startups/indonesias-go-jek-acquires-bengaluru-based-healthcare-startup-pianta/articleshow/54537060.cms
https://www.techinasia.com/indonesia-go-jek-nadiem-makarim-profile
Indonesia’s Go-Jek raises $550 million to battle Uber and Grab
