Should Gojek remain in the Singapore market? Assuming the answer is yes—that Gojek wants to maintain a continued presence in Singapore, the gateway to ASEAN and where many MNCs have set up their headquarters—then the question becomes, how can the company ensure its sustainable competitive advantage and survival in the long term? This is an important strategic question for Gojek as it decides whether to remain/co-exist or even outperform other dominant players like Grab and ComfortDelGro in such a competitive and saturated market.
Given the intense competition from these dominant players, simply replicating the same set of services—such as taxi service and food delivery—may not be enough. It may not even be what Gojek wants to pursue in the mid- to long-term. The basic principles of strategy have taught us that for a firm to achieve sustainable, competitive advantage vis-à-vis its competitors, it needs to differentiate itself from its competitors, through technological innovation for example, or to have cost leadership in the market, whether through learning to do things better or through economy of scale and scope.
So what are Gojek’s strategic options going forward if we were to follow these principles? Here are some recommendations after analysing Gojek’s current portfolio, activities and market positioning.
First, the recent announcement of the multi-billion dollar merger between Gojek and e-commerce leader Tokopedia to create a technology powerhouse called the GoTo Group presents new and exciting opportunities as well as competitive advantages for Gojek.
The GoTo Group will provide a comprehensive set of services such as online shopping, ride-hailing, food delivery, courier and other services in Southeast Asia. The group will also become the biggest privately held technology company in Southeast Asia. Using the model of Alphabet, Gojek and Tokopedia plan to remain separate but provide better integration on payments, logistics and food deliveries. This integration would create new business opportunities and innovations and greatly enhance the capabilities and offerings that Gojek can provide in the Singapore market, and at the same time, bring down the costs significantly.
Second, with expanded services and offerings for more customers in Singapore and the region, Gojek can leverage its enhanced capability to analyse customer data and provide more accurate and comprehensive consumer insights. These insights can create significant value for its customers and for itself in terms of its ability to predict customer needs. For example, better data analytics and predictions of consumer preferences in their online purchasing behaviour would translate to better recommendations (such as food and other household items as well as transportation needs).
Better integration of e-commerce and transportation can also make payment more seamless. In addition, better integration of logistics capability and e-commerce can make delivery and planning of routes more efficient.
Third, in the mid- to long-term, these concerted efforts could allow Gojek to build a multi-sided platform to bring sellers and buyers together, starting with online shopping, food delivery, ride-hailing, courier and other services in a cost-effective manner.
In addition to the one-stop “app” for consumers, these savings could be passed on to consumers and could pose significant competition to current players not only in the logistics space like Grab but also in the e-commerce space like Shopee and Lazada. The mid- to long-term goal would be to create a vibrant ecosystem with complementors that can add to its product and service offerings and innovations and hence, add more value to the platform it created.
Last but not least, Gojek should rebrand itself as an industry leader in environmental, social and governance (ESG) efforts. In its recently launched ESG report, it pledged to achieve “zero emissions, zero waste and zero barriers” by 2030.
The firm intends to structure its approach around the areas of environmental sustainability to achieve “zero emissions” and “zero waste”, while achieving “zero barriers” through socio-economic progress, equality and inclusion. The company’s vision and mission would resonate well with the values of their consumers, especially a rapidly growing set of customers who view a company’s ESG efforts as an increasingly important criteria in choosing their service and product offerings.
In summary, Gojek has accumulated a significant amount of resources, experience and capabilities to survive, innovate and thrive in a highly competitive market like Singapore. The key for the company is to leverage these assets and craft a coherent set of strategies, such as those highlighted above, and implement them diligently. Doing so would not only allow Gojek to maintain a significant presence in Singapore but also enable it to thrive in ASEAN and the world.
The article is an abridged version of the one first published on CNA.