Both firms are led by a pair who met while studying at Harvard Business School, with Gojek co-founder and CEO Nadiem Makarim and Grab co-founder and CEO Anthony Tan finding common ground of their shared backgrounds.
They also agree that they see a silver lining within the food delivery market since it offers way more attractive margins than the more established passenger business, said Florian Hoppe, a partner at Bain & Co in Singapore.
“Today, the food delivery market is much smaller than transportation in Southeast Asia,” he said. “However, revenues are expected to be comparable to or greater than on-demand transportation over the next five years.”
“Buy now, pay later” programs begin in online shopping malls in Indonesia.
“Buy now, pay later” programs begin in online shopping malls in Indonesia.
Globally, the web food ordering industry has turn into a particularly competitive field, resulting in consolidation as firms fight for a bigger share of restaurant supplies value greater than $300 billion. However, in Indonesia, online food delivery accounts for just 1.3% of the overall grocery store, compared with 8% within the US and about 12% in China, in keeping with Euromonitor data.
“We are only scratching the surface in terms of penetration in this part of the world,” said Catherine Sutjahyo, chief food officer at Gojek. “We really believe this is a great opportunity.”
Gojek, which accomplished $2 billion in food delivery transactions in 2018, will not be pleased with the rising tide. The company uses data and machine learning to check consumption patterns, driver behavior and road traffic. So when a user opens the app, the corporate takes under consideration their location, time of day, and past behavior to predict their almost definitely desires.
In terms of penetration on this a part of the world, we are only scratching the surface
The GoFood app offers personalized recommendations based on what the user often orders and the foods they’ve already rated.
Since Gojek began expanding internationally late last 12 months, GoFood has turn into available in Hanoi, Ho Chi Minh City and Bangkok, intensifying competition with Grab.
Gojek’s other successful strategy was to prepare feasts with food stalls at Gelora Bung Karno Stadium in central Jakarta, where Guns N’ Roses and Linkin Park staged performances. On a Friday evening in July, about 50 stalls outside the sprawling stadium offer crispy chicken with crushed chili paste, spiced beef soup and shaved ice cream in sweet coconut milk. People can eat on beanbag chairs or at nearby tables.
Can Indonesia’s Go-Jek loosen Grab’s grip on Southeast Asia?
Can Indonesia’s Go-Jek loosen Grab’s grip on Southeast Asia?
This carnival-like outdoor space is named GoFood Festival, and it’s so popular that Gojek has created 30 such places throughout the Indonesian archipelago. People go to places to dine, but you can too order meals for delivery using the Gojek app. This 12 months, the corporate plans to open one other 10 festival locations.
For participating restaurateurs and food stall owners, the GoFood Festival is attractive because of the low price of admission. All they need to do is bring a chef they usually won’t need to pay prematurely for renting the space, and Gojek will get a part of the revenue. Anggit Budi Setiawan and Felix Suryadi, two 38-year-old friends within the food industry, say their monthly revenue has almost quadrupled to 300 million rupees ($21,000).
“People know our brand now,” Setiawan said. “It’s very exciting.”
Grab rushes to meet up with him. When Soelistiowati launched its banana pancakes two years ago, GrabFood was still in beta, but has since expanded from one city in January 2018 to almost 200 Indonesian cities today. It has also opened eight delivery kitchens, said Demi Yu, head of GrabFood in Indonesia.
The scale of the service “now allows us to make use of data to offer insight into gaps within the kitchen,” Yu said. “This allows us to import specialty foods that cannot be found in a specific area.”
Conscious use of technology and data has been a trademark of each startups’ incredible growth, but they each stumbled upon food delivery almost by accident.
How Go-Jek grew from 20 bikes to $2.5 billion
How Go-Jek grew from 20 bikes to $2.5 billion
In the start, Gojek did not have the resources to integrate restaurant orders into its app, so each time a Gojek driver got a delivery order, he needed to drive to the restaurant, place the order, pay out of pocket, after which receives a commission in money upon delivery. The sea of goys in green jackets lining up at popular stalls to choose up orders suggested that the food delivery industry may very well be taken seriously.
Jeff Perlman, managing director of Singapore-based Warburg Pincus, said demand for food delivery was what stood out when his company decided to take a position three years ago.
“We felt this would ultimately be a multi-billion dollar business,” he said.
