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250 million Indonesians have rapidly embraced the rise of ride-hailing apps to add convenience to their lives.

The three largest players in Indonesia – Go-Jek, Grab, and Uber – not only lower congestion on the roads by connecting drivers to multiple riders, they also offer food delivery, payments via e-wallet features, and almost any service you can think of on-demand.  

These value-added features are possible thanks to each player’s treasure chest topped up with billions of dollars from venture capital funds and massive corporates like Alibaba, Honda, and SoftBank.

But which app do users in the archipelago actually prefer and why?

Indonesians judge their favourite ride-hailing apps

Consumer Pulse by ecommerceIQ is a new series that dives into the minds of consumers to translate their trends and habits into actionable business strategies.

The team conducted an online survey answered by 515 people (46 percent men, 54 percent women) in major cities in Indonesia – Sumatra, Java, Kalimantan, Sulawesi, Bali, West Nusa Tenggara, to Papua – to find out which ride hailing application (Uber, Go-Jek and Grab) they use the most on a daily basis.

A general consensus is that price and number of promo codes are the two key factors that impact adoption in Indonesia, but, our results indicate otherwise.

The majority of respondents pointed to safety as the primary factor when choosing which ride-hailing application to use. It’s not hard to decipher when you consider Jakarta traffic and the thought of weaving through the streets on a high-speed motorcycle.

Indonesians choose safety as the primary factor when choosing which ride-hailing application to use. Image source: ecommerceIQ team.

According to the Head of Indonesia’s Traffic Police Unit, traffic related deaths in the country have hit worrisome levels at roughly 30,000 per year – higher than crime related and terrorism caused deaths combined.

He also added that the number of traffic incidents in Indonesia is the highest among ASEAN countries.  

“Think of the approximately 28,000 to 30,000 people who die on the road per year because of accidents. Compared to terrorism and crime (the difference) is huge,” — National Traffic Police Chief Royke Lumowa

Providers should focus on improving the quality of their riders and vehicles, protective gear and insurance policies to capture more users. Both online and offline elements should be considered during product development as they are equally crucial when it comes to consumer purchase decisions.

For added assurance to both passengers and drivers, the three major ride-hailing apps in the country offer insurance:

  • Go-Jek offers up to 10 million IDR ($751 USD) for death and 5 million IDR ($375,50 USD) for an injury.
  • Grab provides up to 50 million IDR ($3,755 USD) for deaths, and 25 million IDR ($1,877.50 USD) is given to users with severe injuries.
  • Uber provides the most; up to 100 million IDR ($7.510 USD) for deaths, and 10 million IDR ($751 USD) for the treatment.

In 2016, Grab Indonesia promoted a controversial ad campaign to highlight the importance of road safety and how standards in Indonesia can improve. Unfortunately, the images were too graphic and the video was removed but it succeeded in bringing awareness to safe driving practices.

Grab’s ad campaign in Indonesia received a less-than-positive reaction from netizens, with many calling it too gory and disrespectful but it did its job in increasing awareness. Image source: Brandingasia.com

The second most popular reason why people used one ride-hailing app over the others was (unsurprisingly) the ease of finding a driver (23 percent). The rest of the reasons are as follows:

  • Frequent promotions and discounts (22 percent)
  • Easy navigation within the app (16 percent)
  • Many payment options (5 percent)
  • Wide food delivery options (3 percent)
  • Helpful customer service (3 percent)
  • Loyalty rewards (2 percent)

Consumers also indicated that they’re not excited about e-wallet features. Unsurprising as there’s no widespread use apart from the apps own services.

Nevertheless, payments remain a priority area for senior management looking to build a super app like WeChat in China.

CEO and co-founder of Go-Jek, Nadiem Makarim, mentioned he wanted to separate Go-Pay from the Go-Jek ecosystem during an interview with CNBC,

“Payments will be our core focus in 2018, and it will become the year of Go-Pay leaves the Go-Jek app ecosystem and it goes online and offline and to start fulfilling its mission to be the number one financial inclusion tool for Indonesians to gain access to these digital goods and variety of financial services, that frankly they have been deprived of this thought.” — Nadiem Makarim

So which ride-hailing player wins Indonesia?

What’s the app used on a daily basis among our respondents?

First position goes to homegrown unicorn Go-Jek.

Working under the slogan, “Karya Anak Bangsa” (Made by Indonesians), the company has become a favorite among the survey respondents (56 percent) and Indonesians since its establishment in 2010.

The country’s first tech unicorn scaled from a call centre and fleet of 20 riders to more than 654,000 drivers in 50 cities.

Later entrants in the space benefitted from Go-Jek’s investments in marketing and awareness. Consumers, now educated about ride hailing and startups didn’t need to be persuaded too much to try a new option.

  • Grab placed second at 33 percent
  • Uber place last at 8 percent
  • 3 percent of the respondents reported they don’t use ride-hailing apps at all

When considering these results, there are a few factors that impact the ranking:

  • First mover advantage (Go-Jek)
  • Largest reach in the country (Grab)
  • Time of entry into the country (Go-Jek October 2010, Grab June 2014, Uber August 2014)
  • Location of the respondents

A couple of months ago, Grab announced its expansion to 100 cities in Indonesia, making it the dominant player in the country. Meanwhile, Go-Jek and Uber can be accessed in only 50 cities and 34 Indonesian cities, respectively.

Price and promos also carry more weight after the Indonesian Ministry of Transportation announced basic rates for all online car-hailing services; 3,000 – 6,000 IDR ($0.23 – $0.45 USD) per kilometer in the areas of Java, Bali, and Sumatra. For Kalimantan, Sulawesi, Nusa Tenggara, Maluku, and Papua, the rate is more at 3,700 – 6,500 IDR ($0.28 – $0.49 USD) per kilometer.

Meanwhile, the Indonesian government hasn’t announced any regulations for online motorcycle taxis. Based on eIQ research, rates vary between each app.

*The rates are based on a 15 kilometer trip that eIQ personally hailed on each app during rush hour.

46 percent of respondents admitted they have two ride-hailing applications installed on their smartphones. 23 percent of respondents had three applications installed, 29 percent owned one application and 2 percent didn’t use any apps.

Final takeaway

It’s not difficult to understand why residents in each city prioritize certain features over others. Respondents from Semarang, Surabaya and Greater Jakarta value discounts and promotions more than any other option, probably because they have more access to transportation choices.

The KRL Jabodetabek (Jakarta Commuter Line) and TransJakarta in Jakarta; TransJateng and BRT in Semarang; and TransSuroboyo in Surabaya.

Based on the data collected, providing a helmet, hairnet, and insurance is a safety standard all ride-hailing apps should meet.  

The other takeaway from this piece is that being first mover in an industry may not always guarantee an advantage. Go-Jek was the first company to introduce ride-hailing in Indonesia, seizing a head start on later entrants but Grab has been quick to develop and expand its operations in Indonesia and become the dominant player in the country.  

Growing your business without understanding your market and competitors is risky. Consumer Pulse by ecommerceIQ helps collect and analyze information about consumer behavior to help you to hone your marketing strategy.

Here’s what you should know today.

1. Airwallex raises $13M led by Tencent

Australia-based cross-border payments startup Airwallex has closed a $13 million Series A round to expand its reach across Asia Pacific and into Europe. The deal was led by Chinese internet giant Tencent.

Airwallex was founded last year to tackle the issue of cross-border transactions at scale. Unlike predominantly consumer-focused services such as TransferWise — which actually opened an Asia Pacific HQ last week.

Airwallex targets businesses, allowing them to make and receive international payments at scale at both a lower cost and with less hassle.

Already it is working with Tencent to help lower backend costs for its WeChat Pay service overseas — which is seen to have potential to grow alongside the emergence of outbound tourism from China.

Read the rest of the story here.

 

2. Didi’s master plan to win over local Chinese governments with data

Didi Chuxing, China’s largest ride-hailing company, has virtually no competitors left in the domestic ride-hailing industry, especially after its game changing funding round. According to CNIT Research figures from Q3 2016, the Beijing-based company controls 94.6 percent of the market.

Having all but conquered the domestic market, the Beijing-based unicorn is now turning its focus inward, towards the terabytes of data generated through its app everyday.

Didi’s new device could potentially collect a wealth of data about driver behavior.

Didi’s move to develop its own monitoring device is part of a larger push to analyze as much data as it can about transportation in China. Starting last year, the company has been tracking GPS information from drivers’ smartphones in an effort to curb speeding, sudden acceleration, and other risky behavior.

Read the rest of the story here.

 

3. Recommended Reading: Amid brick-and-mortar travails, a tipping point for Amazon in apparel

Amazon is exploring the possibility of selling custom-fit clothing, tailored to the more precise measurements of customers, and it has considered acquiring clothing manufacturers to further expand its presence in the category.

If there are tipping points in retail — moments when shopping behavior swings decisively in one direction — there’s a strong case to be made that apparel is reaching one now, with broad implications for jobs, malls and shopping districts.

“I do think this year is the year apparel e-commerce takes off,” said Cooper Smith, an analyst at L2.

Still, Amazon faces hurdles in its apparel business. Some apparel makers have been frustrated by the prevalence of counterfeit versions of their products on Amazon, peddled by independent merchants.

One idea Amazon is considering to lubricate apparel shopping: custom-fit clothing. The company’s apparel team is exploring the possibility of offering “on-demand” clothing that would be made only after a customer submitted an order, using the customer’s precise measurements.

Read the rest of the story here.

Here’s what you should know today.

1. Amazon founder Jeff Bezos is the world’s second richest person

Jeff Bezos added $1.5 billion to his fortune as Amazon.com Inc. rose $18.32 on Wednesday, the day after the acquisition of middle eastern retailer Souq.com.

Amazon’s founder has added $10.2 billion this year to his wealth and $7 billion since the global equities rally began following the election of Donald Trump as U.S. president.

Bezos remains $10.4 billion behind Microsoft co-founder Bill Gates, the world’s richest person with $86 billion.

Read the rest of the story here.

 

2. Freightos, an Expedia for the shipping industry raises $25m

Freightos, a Hong Kong-headquartered startup that lets people compare prices and book shipping services, has raised a $25 million funding round led by GE Ventures, the venture capital arm of General Electric.

Freightos’ main product is AcceleRate, a subscription software for carriers and freight forwarders to automate calculating and managing shipping rates. The price comparison feature is a new addition to the platform.

Read the rest of the story here.

 

3. Indonesia’s Go-Jek launches new feature to book Blue Bird taxi

Indonesian ride-hailing startup Go-Jek and taxi company Blue Bird today launched Go-BlueBird, a special feature to book Blue Bird taxis via the Go-Jek app. Under the Go-BlueBird feature, users will be able to pay for taxi fare using the Go-Jek’s cashless payment service Go-Pay. The new partnership establishes Go-Jek as an “industry enabler”.

The new product is launched as Go-Jek, with other ride-hailing startups Grab and Uber, battles an upcoming revision of the land transportation regulation.

Read the rest of the story here

State Owned China Post Group is investing in China’s ride hailing giant, Didi Chuxing, for an undisclosed amount, reports e27.

The two companies did not release the exact amount of investment, but focused on describing their strategic cooperation in relying on their respective advantages in the industry. This news comes two weeks after Didi Chuxing’s high profile merge with Uber China.

China Post’s well established presence across China will provide Didi with a more reliable mobility experience for its users. Meanwhile, China Post wishes to leverage emerging digital platforms and business models in order to ‘modernize’ the company.

Bringing state-owned companies on board has been a way to seek stability and utilize resources for startups.

Didi has previously obtained investment from state-owned companies such as China Life, China Merchants Bank and Baic Motor Corporation Ltd.

Didi is still growing, at the end of last year, the car-hailing app attracted 300 million users and 15 million registered drivers in over 400 cities. Over 16 million trips are completed every day on the platform.

Didi’s platform is looking very attractive to investors following Didi’s merge with rival Uber in China. New regulations is also re-shaping the ride hailing industry. In China, car hailing companies are now legal, prior to this, companies such as Didi were operating within the legal gray zone.

China Post and Didi have not elaborated on the details of their collaboration, apart from emphasizing on the ‘strategic partnership’ that will be formed as a result.

A version of this appeared in e27 on August 18. Read the full version here.

Google has added Grab and Go-Jek to its Google Maps platform in Southeast Asia to fuel the heated ride-hailing market, reports Tech Crunch.

Uber’s advantage over its competition was the fact that it was being integrated into Google Maps. However, this year, Google Maps added a slew of non Uber options onto its platform, with the latest being Grab and Go-Jek in Southeast Asia.

The option appears when a user has asked for directions to a place inside apps. The app will show the distance, location of the nearest vehicle and a price estimate. Clicking for the ride option will redirect the user to the Grab or Go-Jek application.

Google Maps has been helping people navigate the world for over a decade, and we’re excited to be able to make Southeast Asia more accessible through Grab’s affordable, on-demand local transport options. – Grab’s Press Release.

These new integrations comes at a very interesting time for Southeast Asia’s ride-hailing apps. Grab is raising a new round of funding at a valuation of $2.3 billion, with China’s Didi Chuxing and Softbank leading the investment of $600 million into the company. Go-Jek has also recently raised $550 million in funding. Although the latter is less globally known, it is the leading motorbike on demand app in Indonesia. The integration into Google Maps may also suggest that the startup is considering a further expansion into Southeast Asia.

The Google Maps app still prioritizes Uber over other options. However, this monopoly is very much like Google’s relationship with Uber itself, complicated. Uber has been dependent on Google Maps, but the company is reportedly spending $500 million to develop its own solution, which is reflected in its acquisition of a small US based maps startup. There have also been many reports that Google is working on an Uber rival of its own.

Perhaps by adding Uber’s Southeast Asia rivals, Grab and Go-Jek to its maps platform, Google is sending out a message of its own.

A version of this appeared in Tech Crunch on August 9. Read the full version here.

Go-Jek, the on-demand motorbike taxi service in Indonesia has raised $550 million in funding, reports Tech Crunch.

The deal will value Go-Jek at $1.3 billion.

The company plans to spend the money growing its services businesses, and continue to compete with fierce rivals in Indonesia. Sources suggests that this round will not fund an expansion outside of Indonesia.

The startup’s existing investors include Sequoia Capital, DST Global and Singapore based NSI Ventures.

The deal makes Go-Jek one of the few unicorns in Southeast Asia. Other tech companies valued in excess of $1 bullion include Garena ($3.75 billion), Grab ($1.6 billion) and Lazada ($1.5 billion).

Go-Jek was founded 2010, but didn’t take-off in a big way until 2014. It then accelerated following the launch of its mobile app in early 2015.

Go-Jek claims 200,000 motorbike drivers in its fleet across Indonesia to serve the world’s fourth largest country with a population of more than 250 million people.

The company is best known for hailing motorbike taxis on demand, a type of transportation popular in parts of Southeast Asia where heavy urban traffic makes two wheels faster than four.

Demand is particularly high in Jakarta, which is home to some 30 million people and is one of the planet’s most congested cities.

Go-Jek has stated that it processed 20 million booking requests in June 2016, around 667,000 per day.

Go-Jek Biggest Competitors

Grab introduced GrabBike to Indonesia last year, and Uber’s Ubermoto launched in Indonesia this year. However, Go-Jek is acknowledged to be the market leader.

Internal documents viewed by TechCrunch show that Go-Jek had $104 million in cash on its books as of March and that it spent $73 million over the previous six-month period. This new raise is hugely important if it is to continue to compete with its cash-rich rivals on subsidies and marketing.

The news of the fundraising has come at a time for ride-hailing services as Uber and Didi are currently tied up in a complex buying bid, with latest news announcing that Didi has invested in Grab’s newest round of funding.

A version of this appeared in Tech Crunch on August 4. Read the full version here.