Indonesian ride-hailing firm Go-Jek revealed on Thursday its plans to move into four new Southeast Asian markets in the next few months, further fueling the competition in one of the world’s fastest-growing regional consumer markets.
The Jakarta-based company stated that it will invest $500 million to enter Vietnam, Thailand, Singapore, and the Philippines within the coming months. The money will be spent on hiring personnel and paying subsidies to draw drivers and customers, according to Go-Jek president Andre Soelistyo.
Soelistyo said they believed that the solutions they provide in Indonesia could be suitable to some of these countries.
Go-Jek’s move fills in the empty space left by US ride-hailing firm Uber Technologies Inc., following its decision in March to trade its business in Southeast Asia for a 27.5 percent stake in its Singaporean rival Grab, which resulted to its departure from the region.
Go-Jek initially intends to begin with offering its ride-sharing services before introducing its additional services that it provides back home, where it evolved from an initial motorcycle-hailing business into food delivery and mobile payments.
Go-Jek will operate by teaming up with local companies to allow its local teams to establish their own brands and identities, so as to guarantee a strong footing in each new market. It is currently in talks with regulators and other stakeholders across the region to begin the plans.
Go-Jek Goes Head to Head with Grab
Go-Jek’s plans to expand in Singapore would mean that it will have to go head to head with Grab, which currently dominates Southeast Asia’s ride-hailing market.
Go-Jek is widely recognized as the market leader in Indonesia, but Grab leads rest of Southeast Asia, on account of its agreement with Uber. The Malaysia-based firm operates in eight countries in the region.
The two companies are already contending in Indonesia, where Grab is trying to further broaden its presence by not just offering ride-sharing services, but by also expanding into adjacent businesses that are similar to Go-Jek’s, including food delivery and mobile payments.
Grab has also modified its offering to adapt to different markets, introducing auto-rickshaws for hire in Cambodia and rickshaws in the Philippines.
Grab co-founder and chief executive Anthony stated in April that they hope to boost their position in the country’s ride-sharing and food delivery market to facilitate the acquirement of financial services clients through cross-promotion.
A spokeswoman for Grab said the company will continue to focus on improving and tailoring its services for its Southeast Asian customers to keep up with the competition.
Rather than seeing Grab’s firm position in the Southeast Asian markets as a disadvantage, Soelistyo saw this as an opportunity for users and other stakeholders in the new markets to welcome Go-Jek more readily, as this will give them another option to choose from.
Soelistyo stated that service offering would be better because of competition, since it will push all the players to provide the best customer experience, which will be advantageous for customers.
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