Philippines and Vietnam Become DOKU's Next Expansion Targets

Provider payment gateway DOKU is gearing up to add new market coverage in Southeast Asia in 2023. After debuting in Malaysia via the acquisition of happyPay last year, the company was exploring new markets in the Philippines and Vietnam.

In an interview with DailySocial.id, DOKU CEO Chris Yeo revealed his ambition to expand his payment solutions across Southeast Asia. This expansion is DOKU's strategy to strengthen its claim to its position as a leader payment gateway in this area.

"Our vision is to become a growing payment solution leader in Indonesia, then expand its market coverage throughout Southeast Asia. That's why, we are actively exploring opportunities mergers and acquisitions (M&A). Our priority is countries that have similar market characteristics to Indonesia," said Chris.

For your information, last year DOKU annexed happyPay, a provider payment gateway from Malaysia. His party sees strategic potential through this acquisition where payment behavior in Malaysia is not much different from Indonesia. In addition, there are many Indonesian migrant workers and students in Malaysia who could become potential target markets.

In the Philippines and Vietnam, its financial inclusion also growing. According to the World Bank report in 2021, the level of financial inclusion in the Philippines reaches 51,37%. Neighboring countries, Malaysia, Singapore and Thailand, have the highest financial inclusion indexes, respectively at 88,37%, 97,55% and 95,58%.

Throughout 2022, DOKU said it had processed a total of 145 million payment transactions, or grew 80% (YoY). This growth was boosted by the Virtual Account (VA) payment method, which is claimed to have tripled (YoY). There are more than 150 thousand DOKU merchant partners.

As of now (year-to-date), DOKU has pocketed a transaction volume of IDR 330 trillion and 360 million transactions with more than 4 million users, DOKU is aiming for the same growth in payment transactions for this year. Without mentioning the numbers, according to Chris, DOKU's TPV and GTV have reached their target in the first quarter of 2023.

Social sellers

Apart from the similarities in the characteristics of financial inclusion, continued Chris, the Southeast Asian region is also closely related to the MSME segment. This segment utilizes digital platforms and social media to reach consumers, thereby creating a need for digital payment solutions.

Chris also said, MSMEs are becoming growth targets company in the short term. The targeted MSME category is social sellers, especially those who have difficulty managing payment transactions from sales on various social media. Currently, DOKU is only focusing on serving the corporate segment, large-scale companies, to technology companies.

Through Juragan DOKU, social sellers can accept payments online and offline with faster registration in five minutes. "We want enable for social sellers to sell products and receive payments easily and quickly. The solutions offered can be via Instant Checkout on Instagram Story, Payment Link, or e-Catalog. If you buy offline, you can use the QRIS feature."

Referring to Cube Asia's report on "Social Commerce in Southeast Asia 2022", as many as 55% of internet users in Indonesia spend an average of $ 100 to shop on the platform social commerce.

Indonesia is also listed as a market live-shopping and community group buying the largest in Southeast Asia with an estimated GMV value of nearly $5 billion and $2 billion respectively in 2022. The high use of social media in the country has also fueled online shopping behavior.

He emphasized that the majority of Indonesian people still use cash payments in transactions so that the room for growth is still very large.

"For us, market education is still a major challenge. Many people are already familiar with the QRIS payment method. However, introducing a new payment concept with link and expand sales opportunities by adding channel payment also takes time. That's why we collaborate with many parties to expand our reach."

DOKU is a developer payment gateway the first in Indonesia which was founded in 2007. Until now, DOKU has six payment service licenses. Some of the products offered are: payments, fund transfers/payouts, to e-money/wallets for whites label. 

Along with the development of internet penetration and the use of digital services, the need for online payments has also increased in Indonesia. Solutions in the field payment gateway starting to get a lot of glances. Apart from DOKU, there are Xendit, Midtrans, and Espay which are enlivening this market.