After Indonesia, Vietnam, Thailand, and Singapore, ride-hailing firm Gojek has been trying to make the Philippines its next pitstop in Southeast Asia for a while now. With a near-$10 billion valuation and a population of 105 million to cater to, it all adds up.
To get a foot in the door, the Indonesian company bought Manila-based mobile wallet startup Coins in January 2019 in what The Ken understands was a $95 million deal. That’s a significant outlay for any still-to-be-profitable company.
But the deal’s promise remains unfulfilled.
An alliance with Gojek was Coins’ best chance of surviving intensifying competition following the entry of Chinese giants Tencent and Alibaba in the Philippines’ mobile payment space. Gojek’s payment service GoPay is dominant in Indonesia, and that was the blueprint. However, Coins is still unable to lean on Gojek fully. The budget allocated for the fintech startup last year was reduced from what Gojek originally intended, former and current Coins staff told The Ken. Gojek declined to comment on the matter.
Gojek still hasn’t launched in the Philippines, nearly two years after announcing its expansion plans outside Indonesia. Last year, Gojek made two attempts to apply for a license to operate in the Philippines, but was rejected both times for going beyond the 40% foreign ownership limit. The company now hopes it’ll be third-time lucky this year.
Beyond the Philippines, Gojek has launched in three Southeast Asian countries since ride-hailing giant Uber left the region in March 2018 by selling its local business to Singapore-based Grab. However, a sense of disjointedness has hung over Gojek’s expansion strategy in the region.
A focus on providing quality services has helped Gojek become Indonesia’s largest ride-hailing company, but it has struggled to replicate that form elsewhere. While the company has a presence in five Southeast Asian countries, if we include Coins in the Philippines, 90% of its revenue comes from Indonesia, a ride-hailing executive told The Ken.
Gojek claimed its services have racked up $1.5 billion in transactions outside Indonesia to date. It did not provide revenue numbers, but the company spokesperson said Gojek wants to lessen its dependence on Indonesia and grow its other markets to 50% of transactions within the next five years.
However, with a limited number of services on offer in its non-Indonesian markets, such a goal seems ambitious at best, or at worst naive. For example, the company does not yet accept credit card payments in Vietnam or Thailand.