GoTo: the new ASEAN e-commerce giant

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Gojek and Tokopedia announce the merger into a new entity to challenge Grab and Sea.

Gojek and Tokopedia have recently confirmed the rumours of recent weeks by announcing their merger. GoTo, the resulting e-digital platform, will be a new ASEAN e-commerce giant worth over $18 billion. This news comes at a time when the tech industry, and especially digital commerce, has recently been extremely dynamic.

The sense of urgency that accompanies the creation of GoTo is significant, suggesting that it might be the only way for both companies to gain a more relevant role in their target market.

Tokopedia and Gojek are two important scale-ups, both Indonesia-based, and both with excellent fundamentals and bright growth prospects in their respective markets.

Tokopedia is an e-commerce platform, one of the top five in ASEAN, while Gojek is undoubtedly the leader in shared mobility in the national market.

Both companies are very promising and have proven to be able to compete on a large scale, thanks to the characteristics of their country of origin. With a population of more than 270 million (the fourth largest in the world) and an economy that was booming before Covid (+5% in 2019 before dropping by 2.1% in 2020), Indonesia is one of the most attractive markets for e-commerce. 

In addition, Tokopedia has received funding rounds of $2.8 billion to enhance its e-commerce platform and can boast names such as SoftBank, Google and Alibaba among its investors.

On the other hand, Gojek has a portfolio of investors of the calibre of Facebook, PayPal, Visa and MUFG (Japanese banking giant) amounting to over $5 billion, and is a definite promise of digital mobility, comparable to Uber in its early years in the US.

Both have not only excellent foundations but also the necessary funds and access to Asia's best-in-class ICT infrastructure.

The cause of the merger between Tokopedia and Gojek must therefore be sought outside, especially in the threat posed by other competitors. In this respect, the golden rule of e-commerce applies: agglomeration and centralisation are synonymous with power and a guarantee of survival.

On one side, in fact, the two companies have to deal with the exploit of Grab - the largest shared mobility platform in Southeast Asia with 200 million users - which has announced an imminent listing on NASDAQ for over $40 billion. Grab is the region's first true super-app, the first example of an all-encompassing mobile application that includes social networking, digital payment, e-commerce, mobility and financial services: hence its motto, 'The Everyday Everything app'. Everything suggests a strategic desire to achieve rapid international expansion, as well as an explicit ambition to become the undisputed leader in the ASEAN region.

On the other hand, Tokopedia and Gojek have to compete with giants such as Sea, which is beginning to represent a major competitor in the Indonesian market as well. The Singaporean group continues to invest relentlessly to increase its presence in individual local markets in the region: with a stellar capitalisation, it has the power to exclude other players from many digital markets in the region.

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