Want to Focus on Regional Expansion in Vietnam and Singapore, Gojek Selling Business in Thailand to AirAsia

Airline company low-cost carriers AirAsia officially annexes the business Gojek in Thailand as a solid step into the digital business. As part of this agreement, Gojek will acquire a 4,76% stake in the service great app Air Asia.

As reported Nikkei Asia, the deal was taken because AirAsia is aiming for growth delivered in Thailand. Gojek itself wants to shift its regional business focus to Vietnam and Singapore.

According to AirAsia's disclosure quoted by the Nikkei, business great app AirAsia is worth $1 billion (about 14 trillion Rupiah), meanwhile Gojek Thailand is worth $50 million (about 700 billion Rupiah).

AirAsia CEO Tony Fernandes assesses the business Gojek in Thailand is well established and can accelerate the company's efforts to become great app challenger in Southeast Asia.

"Service Gojek in Thailand it will operate until the end of July, while our platform starts operating in August. We make sure there won't be redundancy from the transition of these two businesses," said Tony.

While CEO Gojek Kevin Aluwi said that his action was to let go of the business ride hailing in Thailand is a strategic step to reshape its regional business after the merger with Tokopedia into Goto. According to him, Gojek unable to fully commit to resource owned there.

Kevin assesses that business divestment in Thailand will be possible Gojek to lead the market in Vietnam and Singapore by increasing their investment portion. He revealed that his party had been exploring this agreement since two months ago.

"After considering the product development and team that we have, we decided to prioritize investment in Vietnam and Singapore if we look at the scale of the business Gojek in these two countries. We are sure to find the right partner with resource that we have. We remain fully committed to growing the market Gojek outside Indonesia," he explained.

In this virtually announced deal, both Tony and Kevin alluded to the possibility of further potential joint partnerships outside of Thailand, but did not go into details.

 

View this post on Instagram

 

A post shared by Gojek Thailand (@gojekThailand)

A new round of fighting"great app" in South East Asia

Previously Tony had stated his intention to compete with Gojek and Grab in the Southeast Asia region through AirAsia Digital or great app this.

AirAsia's digital services are generally available in Malaysia, consisting of food delivery, Grocery, goods from farmers (farm), and beauty. As a form of expansion, rather than building from scratch, AirAsia took the business Existing Gojek considered to be well established in Thailand.

In the context of international business, GoTo is quite behind compared to its competitors. Tokopedia only operates in Indonesia, meanwhile Gojek has only been operating in three regional countries, namely Vietnam, Thailand and Singapore.

As a comparison, Grab is already present in eight countries and Sea Group (Shopee's parent) is already operating in six Southeast Asian countries. Sea Group even operates in Taiwan and four other countries in South America.

Citing research results Momentum Works, market share Gojek in Thailand is far behind from Grab in 2020. GrabFood controls 50% share food delivery in Thailand or worth $2,8 billion, followed by FoodPanda (23%), and LINE MAN (20%). GoFood only earned a 7% share of food delivery there.

Happen great app in Thailand is also entering into an intense competitive phase with the involvement of local conglomerates in this business. Retail giant Central Group has invested $200 million into its subsidiary Grab in Thailand in 2019. Meanwhile, Thailand's largest conglomerate Charoen Pokphand Group entered this business through its telecommunications subsidiary, TrueID.