From a ride-hailing start-up to joining the elite group of unicorn companies in Southeast Asian market, the journey of Go-Jek has been a remarkable one. The company with current market value of US$2.5 billion is today a major driver of the Indonesian E-money market with its digital payment platform Go-Pay.
Founded in the year 2010, Go-Jek started as a motorbike hire company with mere 20 riders. The company's transport offering being a faster way to navigate through urban traffic bottlenecks was widely accepted by the Indonesian residents. With the growing profitability of the Go-Ride business, the company penetrated into other business varying from cargo deliveries to home cleaning, food and beauty treatments. The proven success track of Go-Jek has also earned it the support of leading investment firms likeWarburg Pincus, KKR, Farallon and the tech giants of China JD.com and Tencent. These investments were not only a boost to the business of Go-Jek but it also had a positive effect on the other promising startups in the country.
With Indonesian government boosting the economy towards cashless society, Go-Jek took a quantum leap in April 2016 with the introduction of its electronic payment platform Go-Pay. Through its e-wallet platform, Go-Jek tapped on the conducive economic environment further boosting the growing popularity for digital payments in the country. Go-Pay enables the users to make payments for any of the Go-Jek services, make account transfers through mobile and withdraw cash from the partner bank ATMs. Go-Pay users can top-up their e-wallet through bank transfers, from ATMs or through any Go-Ride drivers.
With a population of 250 million, Indonesia has witnessed high growth in consumer spending and e-commerce sales owing to increased digital literacy. The e-commerce value of Indonesia is projected to reach US$42.7 billion by 2025. The Southeast Asia’s biggest economy, is also set to become fourth largest smartphone market in the world by 2020. Though economy offers a huge opportunity for e-wallet providers, the existing providers and startups may also have to face a perplexed fin-tech regulatory environment.
The driving factor for the Go-Jek growth in future being the fact that transport accounts for almost half of the digital payments in Indonesia. The Indonesian government is also aiming at fully transforming toll road payments to cashless transactions. The e-money transactions on toll roads in Indonesia alone accounted for 75% of the overall nationwide payments. Greater Jakarta region witnessed the highest digital transactions with percentage being as high as 82% of the overall transactions. According to the figures, the complete implementation of the cashless program in Greater Jakarta requires distribution of approximately 1 million more e-cards. Bank of Indonesia, thus, has collaborated with Go-Jek to promote its Non-Cash National Movement to create more awareness among public for use of cashless payment instruments. The collaboration would allow the consumers to buy e-cards from banks and convenience stores through the Go-Mart feature.
Go-Jek with its business expansions over the past seven years has been on a high growth trajectory. The maiden business of the company, Go-Ride, currently operates through 400,000 drivers spread across 50 cities. Go-Jek encompasses huge growth opportunity through Go-Pay with the continued impetus by the government to direct the economy towards being a cashless society.
According to PayNxt360, the Indonesian mobile payment market is expected to record a CAGR of 72.3% from 2017-2021 to reach US$ 14,465 million in transaction value terms by 2021, increasing from US$ 1,642 million in 2017. In 2016, the market registered a growth rate of 88.9% over 2015, to reach US$ 893 million.
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