Gojek and Tokopedia officially announced their collaboration through the formation of the GoTo Group on Monday (17/5/2021).
MEDIANA/JOICE TAURIS SANTI
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JAKARTA, KOMPAS — Merger or acquisition strategies are carried out by digital technology companies to strengthen an increasingly complex and varied service ecosystem. A bigger market share can be achieved. At the same time, business entities can maintain efficiency. This step was also taken by Gojek and Tokopedia.
Gojek and Tokopedia officially announced their collaboration through the formation of the GoTo Group on Monday (17/5/2021). Gojek is an on-demand and financial service platform, while Tokopedia is a marketplace technology company in Indonesia.
The establishment of the GoTo Group is seen as a collaboration that brings together the strengths of two leading technology companies in Indonesia. This digital consumer platform combines e-commerce services, food and goods delivery, transportation services, and digital and financial payments. This includes a network of business partners and driver partners.
Gojek and Tokopedia have the same goal, namely to provide the best experience for consumers and partners.
In 2020, the GoTo Group was calculated to have a gross transaction value (GTV) of more than US$22 billion with more than 1.8 billion transactions. The platform also has more than 100 million monthly active users.
Gojek Co-Founder and CEO Kevin Aluwi said the agreement happened in a relatively short time. This can be achieved because Gojek and Tokopedia have the same goal, namely to provide the best experience for consumers and partners.
Tokopedia CEO William Tanuwijaya said that Tokopedia\'s mission from the start was to have a social impact on a large scale, including providing equal opportunities for local MSME actors. In addition, this digital company is committed to providing its users with equal access to goods and services throughout Indonesia through e-commerce services.
GoTo\'s next step being is the release of shares on the stock exchange. Currently, GoTo\'s valuation is estimated at US$18 billion, or Rp 261 trillion, assuming an exchange rate of Rp 14,500 per US dollar. Issuers on the Indonesia Stock Exchange that have a market capitalization of approximately the same as GoTo\'s valuation, among others, are Unilever Indonesia Tbk with a market capitalization of Rp 214.5 trillion. Another issuer is Astra International with a market capitalization of Rp 211 trillion.
The Indonesia Stock Exchange is also reviewing several regulations to support start-up companies to enter the stock exchange. For example, by considering the use of special purpose acquisition companies (SPAC) to enter the stock exchange. In addition, it also examines the provisions for bookmaking of profits to be listed on the main board.
The characteristics and development of start-up companies are different from conventional companies. Start-up companies emphasize more on the number of customers and continue to increase company value. Therefore, it could be that a start-up has not recorded any profit after several years of operation.
Director of Anugerah Mega Investama Hans Kwee said that the stock exchange should have considered various supporting facilities when start-up companies enter the stock exchange. Let alone, startup companies with high and influential valuations.
"These (GoTo) are our two best start-ups," said Hans, adding, it is possible that GoTo will also conduct dual listings on foreign stock exchanges.
These (GoTo) are our two best start-ups
Quoting data from Crunchbase.com, the funding received by Gojek reached US$5.3 billion from 12 funding rounds. Gojek was involved in 12 fund injections from other companies and in nine of them Gojek became the leading investor. Companies that have received investment from Gojek, among others, are Bank Jago, Pasar Polis, and BlueBird Group.
Gojek has also acquired 13 corporate organizations, including WePay, Loket, Mid-Trans, and Kartuku. Meanwhile, Tokopedia received US$2.5 billion in funding. This fund was obtained from 11 funding rounds.
The GoTo Group maintains a list of blue-chip investors. The list of investors includes Alibaba Group, Astra International, BlackRock, Capital Group, DST, Facebook, Google, JD.com, KKR, Northstar, Pacific Century Group, Pay Pal, Provident, Sequoia Capital, SoftBank Vision Fund 1, Telkomsel, Temasek, Tencent, Visa, and Warburg Pincus.
Nailul Huda, a researcher at the Institute for Development of Economics and Finance (Indef), viewed the existence of the strengthening of the service product ecosystem through the formation of GoTo. "Consumers will soon be connected to various GoTo services. On the other hand, the number of partners, such as sellers and drivers, will also increase. The economies of scale and GoTo\'s valuation could also be higher,” said Huda.
For MSME-scale actors, the existence of GoTo can expand the range of manufactured goods. This applies to MSMEs registered on the two platforms. In addition, this merger also has the potential to reduce costs for MSME actors so that it is not burdensome.
We can only analyze the potential for unfair business competition from the report.
However, digital technology companies with smaller business scales, for example limited to the ride-hailing business model, marketing websites, and digital wallets, may find it difficult to compete. Outside the GoTo Group, the digital service market in Indonesia recognizes services from Shopee and Grab-Bukalapak-OVO-DANA. These companies also have complex and varied service ecosystems.
"Meanwhile, the characteristics of digital technology companies are the winners take all, therefore they will certainly compete fiercely," said Huda.
Chairman of the Business Competition Supervisory Commission (KPPU) Kodrat Wibowo said that his party is waiting for the Gojek-Tokopedia merger report.
"We can only analyze the potential for unfair business competition from the report. In the context of a digital technology company merger, we will analyze the potential of dominant control of the market from all the various services they offer. For example, from the aspect of e-commerce and digital payment services market," said Kodrat.