How Mergers Gojek Tokopedia Has a Positive Impact on Consumers and the Industry

The latest news that everyone is talking about in the first week of 2021 is to merge antara Gojek and the seemingly imminent Tokopedia, two of Indonesia's most looming tech startups. In contrast to banal rumors with Grab, the discussion I had on various networks about the potential for integration between Gojek and Tokopedia from many different perspectives is very interesting. The following is my analysis of the impact of to merge this.

Impact on consumers

From the consumer side, this cross-breeding of complementary products would be fantastic. Transport infrastructure, e-commerce and finance all in one integrated product? This is the dream of every consumer, hyperlocal commerce! Now, we have a same-day delivery system underway. Integration between Gojek and Tokopedia could come up with something that might be even more evocative, instant Amazon Prime-style delivery within hours, helping drive e-commerce transactions and customer satisfaction while increasing driver utilization making it more economical as a business.

Basically, Gojek has carried out this hyperlocal commerce model through the GoFood platform, where customers can get the food they ordered in an instant, even less than 30 minutes. Integration with Tokopedia will connect this logistics infrastructure with Tokopedia merchants, which is Tokopedia's main advantage amid fierce competition with Shopee SEA.

That brings us to another market that practically all unicorns focus on: the SME industry. Well Gojek and Tokopedia have large SME user bases under their platforms, albeit with different types of needs. No overlapping, just complementary. Gojek are service based UKM(restaurants, shops, stalls) which are time driven and Tokopedia is more like handicraft based UKM. The two unicorns have also made great efforts in digitizing SMEs through Point-of-Sales, merchant marketing applications, and even providing capital for growth.

In addition to their core businesses, both unicorns are also exploring the financial technology (fintech) space. Tokopedia with its strategic investment in Ovo, which is well-entrenched and the default payment method in its markets, and Gojek with the GoPay and GoPay Paylater platforms. Both have also faced major competition from ShopeePay, one of the fastest growing fintech products in the market especially during the pandemic where Shopee has increasingly driven ShopeePay customer acquisition like wildfire using a seemingly endless marketing budget.

Impact on industry

Put side by side, the two companies would reach a valuation of about $18 billion. Of course, it is no secret that an IPO is one of the main reasons behind this merger, investors in both companies need liquidity and returns, after all there is no harm in both companies getting capital in these uncertain times. The combined company will likely try dual listing if they choose to go public this year, IDX and possibly Nasdaq (could be the friendliest market for tech IPOs this year).

The IPO will have an impact on the global and Indonesian markets. Good Gojek and Tokopedia are well-known companies which, if combined, would make them very big and unique. As stated Bloomberg, "a local union of Uber, PayPal, Amazon.com, and DoorDash." and they convey it very well. While very exciting for some investors, this is unique and unfamiliar new territory for some, and there will be adjustments in understanding the business and its fundamentals in full perspective. However, the IPO will put Indonesia on the map like when Yahoo! acquired Indonesian-made social media app Koprol in 2010, an event that sparked the startup's growth.

For Indonesia itself, or more precisely investors who have invested in Indonesian technology startups, this IPO is a divine light at the end of the road. The possibility of a giant tech IPO exists, but more importantly, the unicorn link-up would immediately become a go-to for startups looking to be acquired, much like Apple and Google are for Silicon Valley.

Of course, I assume that the combined company will actively acquire reliable Indonesian startups in this industry. This could also kickstart the employee-to-founder and founder-to-investor cycle that the country so desperately needs.

Even though it is very eye-catching, mergers also have several points that must be considered. Consumer data privacy is one of the most important. Joint products are also at the forefront of consumer profiles. The platform will know where you are, where you go, what you buy, and basically your financial profile. That's just the surface. Future integration will capture more data from consumers that will be invaluable to the combined company. See Amazon as a glimpse into the future.

Consolidation is never easy, restructuring, cost reduction, optimization, etc. But if done correctly, the results can be unpredictable. Tremendous potential awaits post-merger Gojek and Tokopedia, both interesting and scary. But honestly, I'm really looking forward to it.

-Original article in English, translated by Kristin Siagian