Motorcycle-taxi service PT Go-Jek Indonesia will invest $500 million to expand its operations in Southeast Asia, revving up competition in a fast-growing consumer market just two months after Uber Technologies, Inc. reached a landmark deal to exit from the region.
The Indonesian company said in a statement it plans to enter Vietnam, Thailand, Singapore and the Philippines in the next few months and is currently working with regulators and stakeholders across the region.
Go-Jek will initially offer motorcycle-hailing services in Vietnam, Thailand and the Philippines, and provide traditional taxi services in Singapore, where motorcycle taxis aren't permitted, a company spokesman said. The move, in effect, puts Go-Jek in direct competition with regional market leader Grab, Inc.
Ride-hailing companies such as Go-Jek and Grab are looking to expand their presence in a region that is home to about 600 million consumers. In March, Uber said it would relinquish its battle for Southeast Asia's riders, selling its local operations to Grab in exchange for a minority stake in the Singapore company.
With the rapid growth of ride-hailing startups, Japan's SoftBank Group Corp., Chinese ride-sharing giant Didi Chuxing Technology Co., KKR & Co., Warburg Pincus LLC and Alphabet Inc.'s Google have all pumped in millions of dollars to get a slice of these homegrown champions with multibillion-dollar valuations.
Besides ride-hailing services, Go-Jek and Grab have ventured into mobile financial services and offer food delivery in some markets.
"Consumers are happiest when they have choice and at the moment, people in Vietnam, Thailand, Singapore and the Philippines don't feel that they're getting enough when it comes to ride-hailing," Nadiem Makarim, co-founder and chief executive of Go-Jek, said in a statement.
Competition authorities in the Philippines and Singapore are examining the proposed Uber-Grab deal in Southeast Asia on concerns that the consolidation could give Grab a near monopoly in those markets. The region's ride-hailing market is forecast to grow to $13.1 billion by 2025 from $2.5 billion in 2015, according to a report by Google and Singapore state-investment company Temasek Holdings Pte. Ltd.
Go-Jek, which launched its app in 2015, said the ultimate aim is to replicate the multiple-service business model that made it popular in Indonesia. (WSJ)