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What marketers and advertisers should know about the Go-Jek and Tokopedia merger

The Drum 10 Jun 2021 12:00

As Go-Jek and Tokopedia merge to provide integrated services online and offline, we take a look at how it benefits merchants from across Indonesia and what marketers should take note of.

Go-Jek and Tokopedia, two of Indonesia’s e-commerce and ride-hailing giants, have merged to to create the largest digital consumer platform in the country and boost their overseas expansion. The companies announced their intention to merge and form a new company called GoTo Group on 17 May.

According to IPrice Group’s map of e-commerce for Indonesia, website visits for Tokopedia hit almost 84 million per month, with a total increase of 25% since early 2020. In Q1 2021, Tokopedia achieved its highest average monthly visit with a total of 135,076,700 visitors.

Go-Pay, one of the services available in the Go-Jek super app, snagged the highest active monthly users from Q2 2019 to Q2 2020. The total downloads of Go-Jek’s apps also ranked first when it comes to having the most downloads on both Android and iOS platforms.

“As their statement to accelerate the growth of Indonesia’s digital economy, GoTo Group will make it easier for people from all walks of life to access quality products and services, anytime and anywhere.”

He says the merger of GoJek and Tokopedia addresses specific challenges for both platforms: to get more customers, increase revenue streams, and improve logistics and quick commerce.

What will the merger mean beyond Indonesia?

He predicts the Go-Jek and Tokopedia merger will apply more pressure on their competitors to fine-tune their own roadmaps and potentially expedite partnerships to combat this merger.

“From a consumer perspective, we will hopefully see more benefits such as new products and improved experiences. For example, while the merger between Grab and Uber saw the exit of Uber in SEA, Uber Eats was absorbed into Grab and re-branded as GrabFood, with users being able to use their credits/rewards across both food and transport,” he explains.

Even though the merger creates the largest tech platform in the region, Anne Ridwan, the country director for Indonesia at R3 says the focus for GoTo Group now is on the Indonesian market. “That said, the merger also establishes a stronger personalized delivery to the e-commerce business, which could set a new logistic business trend across the Asia Pacific.”

The merger Go-Jek and Tokopedia has put its main rivals Grab, Shopee and Lazada on notice and these three companies are now fighting in the same space when it comes to groceries and instant commerce.

Besides e-commerce and logistics, payment and financial services are additional areas that Grab is competing in, points out Xiaofeng Wang, a senior analyst at Forrester.

Whilst Grab, Lazada and Shopee have all collaborated with various entities such as TV channels, social networks like TikTok and brands, Matriano stresses consolidation of a digital commerce offering is still the most pressing priority in the fight for dominance.

“Partnerships, mergers and acquisitions have long been a successful way for organisations to innovate quickly. A great example is Apple, who through the purchase of Beats by Dre, greatly improved and advanced their audio products like Airpods,” he explains.

How should brand marketers and advertisers work with GoTo Group?

Matriano explains that coupled with the ability to scale, brands will be able to benefit and achieve disproportionate ROI from GoTo’s already established mechanics, logistics and consumer behaviour insights.

“This new ecosystem will make it easier for brands to effectively be on two platforms, potentially increasing both reaches but also the opportunity for sales, especially with the increased possibilities of O2O for both brands.”

“We expect there to be another market share fight in Indonesia and brands should be investing closely with GoTo to gain share at the same time. Categories related to instant commerce should be particularly aggressive in their investment with GoTo,” he says.

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TokopediaIndonesiaTokopediaGoTo GroupIPrice Group
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