GO-JEK is an Indonesian ride-sharing company that has become the country's first unicorn, or a startup with a valuation of at least $1 billion
The first thing I noticed was the traffic.
Traveling in Jakarta, like most other highly urbanized cities in Southeast Asia, takes a lot of time. Most locations we went to had an estimated arrival time, but they were always given the condition of “if traffic cooperates.” And traffic rarely cooperated.
Indeed, a 2017 survey commissioned by ride-sharing app Uber estimated that daily commute in the Indonesian capital takes 68 minutes on average, which meant it had the second worst traffic among Asian cities. Thailand’s capital, Bangkok, ranked first with 72-minute commutes, while Manila was third with 66.
But even daily travel in Metro Manila’s roads and constant warnings from friends and family who heard about Jakarta’s situation weren’t enough to prepare me for the actual thing. Our tour guide mentioned that Jakarta is in the middle of a three-year mass construction project which involves new train lines, new highways and new bridges, as well as closed routes, blocked off lanes and impatient drivers. And one key difference between Manila’s and Jakarta’s roads is what these drivers drove—what rules the streets in Jakarta are not cars, but motorcycles.
Every intersection we drove through was filled with motorcyclists, with many ignoring the red stoplights and pedestrians to get to their destinations. An executive of the Jakarta transport council said that there were “15 million motorcycles in Jakarta, compared to 5.2 million cars” in a South China Morning Post article published October 1, 2017.
A majority of these motorcyclists wore green helmets with the logo of GO-JEK—a local ride-sharing company that has become Indonesia’s first unicorn, or a startup with a valuation of at least $1 billion.
Beisdes its ride-sharing component, GO-JEK has expanded to offer courier services for both packages and food, a mobile wallet for online shopping and bills payment, and even on-demand bookings for car mechanics and masseuses
Established in 2010 but only launching its mobile app in January 2015, GO-JEK has been downloaded over 44 million times and manages a network of over 300,000 drivers as of July 2017. Aside from its near ubiquitous presence in Jakarta’s roads—several times I saw a row of green-helmeted and green-jacketed drivers at the side of the road, standing by with their motorcycles and waiting for booking passengers—GO-JEK has expanded its app to offer courier services for both packages and food, a mobile wallet for online shopping and bills payment, and even on-demand bookings for car mechanics and masseuses. At least three people in the group I traveled with booked massages with the app’s Go-Massage feature during our three-night stay.
With such a big part of the population as its customer base, GO-JEK has attracted various notable investors such as Chinese conglomerates Tencent and JD.com. Most recently, it was reported that tech giants Google and Temasek joined a $1.2-billion funding round, valuing GO-JEK at around $4 billion.
Billboards around the city
The second things I noticed were the billboards.
Not that Jakarta’s billboards were groundbreaking or extraordinary—in many ways they were similar to those in Manila. But whereas billboards in Manila typically advertised brands of established international or local companies, those in Indonesia promoted startups’ brands.
Perhaps the most common brand I saw was another Indonesian unicorn: Tokopedia, an online marketplace carrying over 16 million products from over one million sellers. Billboards promoting Tokopedia dot many of Jakarta’s main thoroughfares, either on lampposts or overpasses or building rooftops. Its endorsers and products were surrounded by the company’s green tint and marked by its bird-faced shopping bag logo.
Tokopedia is an Indonesian online marketplace carrying over 16 million products from over one million sellers
Established in 2009, the e-commerce platform also has its own building in one of Jakarta’s main business districts. Launched as Tokopedia Tower in 2017, the 51-storey building stands in the Jakartan skyline displaying the startup’s name next to large local banks and established multinationals.
According to iPrice Group, Tokopedia is the second most visited e-commerce platform in the country, behind the Indonesian unit of Lazada. And like Lazada, it has also attracted Chinese e-commerce giant Alibaba as an investor, which led a $1.1-billion funding round reported last August.
Opportunities in Indonesia
The successes of GO-JEK and Tokopedia highlight how far Indonesia has gone in building its startup community and how much the Philippines can learn from the experiences of its neighboring country.
According to data presented by co-working space operator GoWork (which, despite its name, is not affiliated with GO-JEK), there were over 1,600 startups in Indonesia by end-2016, more than six times the number in 2012 and the most for any startup community in Southeast Asia. In contrast, the Philippines only has over 300 startups, as cited by accounting firm PwC Philippines in the 2017 Philippine Startup Survey.
In discussing the opportunities of the business in Indonesia, Peony Tang, one of GoWork’s co-founders, mentioned that this opportunity comes from Indonesia’s current market conditions. “Indonesia is one of the largest economies in Southeast Asia, so this represents a tremendous opportunity for entrepreneurs not only in Indonesia but also all over the region,” she said.
Tang added that Indonesia’s demographics also contribute to this positive outlook. “Sixty percent of our population is less than 35 years old,” she described. “And our young and mobile population is spending a ton of time on their phones, on the internet and on social media.”
Tokopedia is the second most visited e-commerce platform in Indonesia
According to Digital in 2018, a report on the global digital landscape by social media agency We Are Social and social media management platform Hootsuite, 50 percent of Indonesia’s population use the internet while 47 percent are mobile internet users. Around 49 percent of the entire population is on social media, and an Indonesian internet user spends an average of three hours and 23 minutes each day on a social media platform.
Sound familiar? Startup experts in the Philippines think so, too.
“In many ways, we are Indonesia except divided by 2.5,” described Manuel “Manny” Ayala, the managing director of global nonprofit organization Endeavor Philippines, in an interview with Forbes Philippines in 2016. He was most directly referring to population—Indonesia has around 265 million people while the Philippines is home to over 105 million. But Ayala was also alluding to how the development of the Philippine startup scene isn’t that different from Indonesia—only that the latter is further along in the process.
“Indonesia, I would say, is several years ahead of the Philippines in terms of the tech startup community,” said Ayala. “And I would say that’s a logical thing because they have the numbers.”
Room for growth
Indeed, comparing the two countries’ statistics in the We Are Social study reveals that while the Philippines has higher penetration rates, Indonesia comes out on top due to sheer volume. While GO-JEK is only tapping the 47 percent of Indonesia’s population using mobile internet compared to the Philippines’ 59 percent, their market size translates to 124.8 million individuals, more than double the Philippines’ 61.9 million.
Tokopedia is working with even smaller penetration rates, with only 11 percent of Indonesians using e-commerce platforms to purchase consumer goods. While that also translates to a lower number of individuals—28.1 million Indonesian online shoppers compared to 33.88 million Filipino online shoppers—the low penetration rate is also indicative of a large growth opportunity for Tokopedia, especially since Indonesia has almost double the number of internet users than the Philippines.
Although GO-JEK is only tapping 47 percent of Indonesia’s population using mobile internet compared to the Philippines’ 59 percent, their market size translates to 124.8 million individuals, more than double the Philippines' 61.9 million
When Ayala mentioned that Indonesia was ahead of the Philippines in terms of developing its startup community, he clarified that the Philippines was well on its way to reaching the same potential Indonesia has achieved. That three Indonesian startups managed to become billion-dollar companies—the third being booking platform Traveloka—in an environment very similar to the Philippines’ own is testament to the huge potential local startups have to grow.
So when I saw all those GO-JEK drivers and Tokopedia billboards in Jakarta’s roads, it made me optimistic that, in the near future, a Philippine startup will be able to get a Makati or BGC tower named after it; a Philippine startup will be used by over a third of all mobile internet users; and a Philippine startup will be able to achieve that same ubiquity in its own country.
Lorenzo Kyle Subido is a staff writer of Entrepreneur PH. He was a guest of AirAsia Philippines in Jakarta