Exploring the Potential of "Goto" Integration, Merger Results Gojek and Tokopedia

The latest news comes from the merger plan Gojek and Tokopedia is valued at $18 billion. According to sources cited The Information, the result of the merger of the two brands will be named "Goto". It also said the deal would be completed as early as this month.

The source also stated that Kevin Aluwi, Andre Soelistyo, William Tanuwijaya, and Patrick Cao will occupy the top management ranks of the combined company.

Previously, in early April 2021, Bloomberg reported that the details of the merger agreement had been decided by the company's executives and commissioners and were seeking approval from other shareholders. For information, both startups have the same investors, namely Google, Temasek, Seqoia Capital India, and Alibaba Group.

The next plan, according to rumors circulating, is that the combined company will proceed to NASDAQ – predicted to use a SPAC and seek a valuation of up to $40 billion.

Service ecosystem Gojek

Starting from transportation services on-demand, Gojek currently has quite complete services empowering its partnership ecosystem. Not a few of the sub-features presented are integration with third parties, especially startups resulting from acquisitions or those included in the portfolio of venture units.

In terms of business structure, Gojek consists of four main lines, which cover services Gojek, GoPay, GoPlay, and Go-Ventures. Meanwhile, in terms of new [consumer] applications, it is divided into two separate units, namely: Gojek and GoPlay. From the results of our observations through in-depth application and public information collected, the following is a map of ecosystem services Gojek:

Tokopedia service ecosystem

Meanwhile, the basic services of Tokopedia are: online marketplace, namely being a bridge between the owner of goods/services and the end user. His role is in the middle of making innovation focused on aspects that can provide transaction effectiveness. This is in line with mission to become IaaS facilitating MSMEs to trade digitally.

Beyond its core services as marketplace, there are several aspects of supporting services that are quite strong, including financial lines, SME empowerment, entertainment and services on-demand. Several services are supported by strategic partners, some of them by subsidiaries and investment portfolios. Based on observations of applications and public information collected, the following is a map of Tokopedia's ecosystem services:

Collaboration potential

From the service map, if what has become the talk of the town is related to merge Gojek-Tokopedia will be realized and truly become one joint company unit, there are several aspects that can be synergized.

1. MSME Empowerment

Both services have a significant concentration on MSMEs, making them business partners. Gojek with restaurant owners, while Tokopedia with merchandise sellers. The segments are different, so they will likely remain separate entities with a more integrated service model. For example, to fulfill raw materials, GoFood partners can access directly to shops on the Tokopedia service.

This combination also allows the creation of services hyperlocal – Nearby MSMEs serve the nearest market share. For example, Tokopedia Partners (grocery shop owners) can be integrated with delivery services Gojek, so that it can speed up the fulfillment process for each customer. Or partner fleet optimization Gojek to be better connected with the TokoCabang fulfillment center to speed up the goods delivery process.

2. Financial

Since the past few years, second unicorn Indeed, it has a clear mission to become "fintech" as one of its main business models, no wonder the financial-based services available in each application are quite rich. What is clear is that the merger of the two companies will certainly allow Tokopedia users to have more comprehensive Gopay payment options. On the other hand, there are many areas that can be worked on by combining their respective strengths.

For example, integrating Moka-Gopay [Findaya]-Tokopedia is possible merchant F&B gets basic ingredients fulfilled on credit to help them improve cash flow. If we delve deeper into this scheme, it will require many supporting systems such as credit scoring and disbursement infrastructure – which can already be complemented.

Big data What is collected also becomes a treasure that will be very valuable for various business scenarios, including to help financial inclusion. Especially now Gojek is starting to play in the realm of digital banking – transaction data is becoming an important fuel for various decisions related to consumers.

3. Logistics

Logistical challenges exist in the area first mile, mid-mileand last mile. Combining the logistics infrastructure owned by the two companies allows the IaaS mission initiated by Tokopedia to be realized more quickly. As companies continue to expand their fulfillment centers, delivery services are also a component that must be considered. As is Gojek Logistic, JX, and SiCepat are strategically affiliated, allowing for deeper integration to bring new breakthroughs in the world of logistics.

4. Their respective core businesses

Mobility and trade services are key capabilities Gojek and Tokopedia. Of course, it is highly projected that this will not fade away from each of them, considering that there are already so many users. The homework is how to balance each service – especially if they actually become one brand— so that consumers remain comfortable, instead of becoming increasingly confused because the service ecosystem is too fragmented.

Potential “clash”

It cannot be denied that strategic partnerships are aimed at forming a mutualism. The merger of the two companies also brings the potential for "clashes" between important partners Gojek and Tokopedia. The assumption is that services that are developed completely independently can be more easily merged. However, when other players are involved, this consolidation will become a tougher discussion.

Take, for example, what investment services will look like on Goto – while currently there are three other startups affiliated with each platform through share ownership. From the service ecosystem mapping above, several services from the partnership can be listed that could potentially conflict if a business merger is executed:

Gojek and Tokopedia are two Indonesian startups with the largest valuations and the largest base of MSME users and partners. The joining of the two companies should help Indonesia achieve its dream of becoming a digital economy leader.