Gojek and Grab: the rise of the south-east Asian super app | FT

Summary

The video highlights how Southeast Asia, particularly Indonesia, is at the forefront of the mobile tech revolution, with super apps like Gojek and Grab transforming daily life. Initially starting as ride-hailing services, they now offer a wide range of services, including food delivery, financial services, and digital payments. These apps are helping small businesses and individuals thrive, while also promoting financial inclusion in a region where many lack access to traditional banking. The digital financial revolution is challenging cash-based economies, and these companies are expanding into core banking services, reshaping the financial landscape.

Takeaways

• 🚕 Grab and Gojek are Southeast Asia's super apps, starting with ride-hailing and food delivery and now transforming digital payments.
• 📱 Southeast Asia's population of 650 million, with most accessing the internet via mobile phones, offers a massive market for these apps.
• 🇮🇩 Indonesia, the world's fourth-most populous country, is at the center of this competition, where these apps are helping small businesses thrive.
• 💸 Digital payments are key to profitability for Grab and Gojek, which are moving into financial services like loans and micro-lending.
• 🏦 Many Indonesians are unbanked, and Grab and Gojek are offering basic financial services to those without traditional bank accounts.
• 🛒 Small business owners, like food stall operators, have transitioned from cash-based operations to digital payments via apps like Gojek.
• 💻 Indonesia's economy is still cash-heavy, but the transition to digital payments is seen as a major opportunity for growth and change.
• 🙏 Even religious institutions, such as mosques, and government services are integrating mobile payment platforms for donations and payments.
• 🏢 Critics warn that Grab and Gojek's growing dominance could lead to regulatory scrutiny, as they create a digital duopoly similar to Big Tech in the West.
• 🌏 Southeast Asia, particularly Indonesia, is now a major hub for FinTech innovation, with Western companies looking to the region for inspiration.

Q & A

What are the two major super apps mentioned in the script?

The two major super apps mentioned are GoJek and Grab, both based in Southeast Asia.

What services do GoJek and Grab initially provide, and how have they expanded?

GoJek and Grab initially started by offering ride-hailing and food delivery services. They have since expanded into online payments, micro-lending, and other core banking services.

Why is Southeast Asia, particularly Indonesia, important for GoJek and Grab's growth?

Southeast Asia, especially Indonesia, presents a huge market opportunity due to its population of 650 million people, many of whom rely on mobile phones as their primary means of accessing the internet.

How have digital payments impacted small businesses in Southeast Asia, according to the script?

Digital payments have helped small businesses, such as Roberto Ko’s, to expand significantly by enabling easier transactions and access to a wider customer base, boosting sales and reach.

How has GoJek helped individuals like Emma and Johannes improve their livelihoods?

Emma, trained as a masseuse, was able to earn significantly more through GoJek than her previous job in a laundry, and her husband Johannes found that he could earn more as a GoJek driver than selling baby food.

What is the main path to profitability for GoJek and Grab according to the script?

The main path to profitability for GoJek and Grab lies in digital payments, which underpin all of their other services. This system is seen as more lucrative than just ride-hailing or food delivery.

What challenges do GoJek and Grab face in Indonesia regarding banking and digital payments?

One of the main challenges is the large portion of the population that still relies on cash transactions. Less than half of Indonesians have a bank account, and digitizing the economy requires a major shift in mindset.

How are traditional banks struggling in Indonesia, and how do super apps like GoJek fill the gap?

Traditional banks find it difficult to cater to Indonesia’s vast, cash-based economy, whereas super apps like GoJek offer more accessible financial services, such as micro-lending, and make digital payments more viable for small businesses.

What role do digital platforms play in Indonesia’s religious and public services?

Digital platforms are now being used in religious donations, such as at the Biderman mosque, where nearly a third of donations are made through mobile apps. Government services are also becoming available via phone top-ups.

What potential risks do critics highlight about the growing dominance of GoJek and Grab?

Critics are concerned that GoJek and Grab's dominance could create a duopoly, similar to Big Tech companies in the US and Europe, which might lead to regulatory scrutiny, particularly as they expand into financial services.

Outlines

00:00

🚀 Rise of Southeast Asian Super Apps

In Southeast Asia, super apps like Gojek and Grab have become vital for daily life, much like Uber or other tech giants in the West. They started by offering ride-hailing and food delivery services, but have since grown to become essential platforms leading a digital payments revolution in the region. With a population of 650 million, Southeast Asia represents a vast market where mobile phones are the primary tool for accessing the internet.

05:03

📱 Tech Revolution in Indonesia

Indonesia, the world's fourth most populous country, is at the heart of this tech revolution. Small businesses like Roberto's have benefited immensely from linking up with digital payment platforms like Ovo, leading to expanded operations and increased sales. Individuals like Emma, a trained masseuse, have also been able to shift into more lucrative work thanks to apps like Gojek, dramatically improving their income.

💸 The Profitability Challenge

Despite their rapid growth, companies like Gojek and Grab are still not profitable. They are burning through cash as they aim to reach more users and offer a wider variety of services. However, they have realized that digital payments hold the key to long-term profitability. The financial transformation occurring in Indonesia goes beyond ride-hailing and food delivery, embedding itself into daily life in a way unimaginable in Europe or the U.S.

🌍 Digital Financial Revolution

In Indonesia, Gojek and Grab have been at the forefront of digital financial services, offering basic banking services like loans and micro-lending to unbanked individuals. Less than half of Indonesia's population has access to traditional bank accounts, and most transactions still rely on cash. However, by shifting to digital payments, companies hope to create a financial system that is more inclusive and accessible for all Indonesians.

🏠 A Cashless Society in the Making

Entrepreneurs like Primo, who used to run their businesses solely on cash, are now transitioning to digital payment systems, thanks to partnerships with platforms like Gojek. This shift is significant for small businesses in Indonesia, especially in rural areas, as it offers greater opportunities to grow and operate efficiently. However, the real challenge lies in changing consumer behavior, as many Indonesians are still accustomed to using cash.

📲 Digital Payments in Everyday Life

Digital payment platforms are rapidly spreading across all aspects of Indonesian society, including religious institutions and even government services. For example, mosques now accept a third of their donations through mobile apps. Despite this progress, some critics are concerned about the dominance of companies like Gojek and Grab, fearing that their growing influence could lead to monopolistic practices similar to those seen with Big Tech companies in the U.S. and Europe.

🏗️ Indonesia’s Evolving Tech Landscape

Indonesia's tech ambitions were once centered around manufacturing, but companies like Gojek and Grab have drastically shifted the focus to digital services. These companies, initially seen as copycats of Western tech firms, are now being looked to as pioneers in the next phase of the internet revolution. The future of technology and digital finance may very well be shaped by innovations emerging from Southeast Asia.

Keywords

💡Super Apps

Super apps refer to mobile applications that offer a wide range of services within a single platform. In the video, Grab and Gojek are examples of super apps in Southeast Asia, starting as ride-hailing services but evolving into platforms that offer food delivery, digital payments, and other financial services, making them indispensable for daily life in the region.

💡Digital Payments

Digital payments are electronic methods of transferring money, bypassing the need for physical cash. In the video, apps like Gojek and Grab are driving a digital financial revolution in Southeast Asia by offering digital payment options to people without traditional bank accounts, helping to transform economies that heavily rely on cash transactions.

💡Southeast Asia

Southeast Asia is a region that includes countries like Indonesia, Malaysia, and Vietnam, home to a population of 650 million. The video highlights how mobile phones are the primary way people access the internet, making it a fertile ground for super apps like Grab and Gojek to thrive, particularly in countries like Indonesia, where most of the population is unbanked.

💡Unbanked Population

The unbanked population refers to individuals who do not have access to traditional banking services such as bank accounts. In Southeast Asia, and particularly in Indonesia, a large portion of the population falls into this category. Grab and Gojek are addressing this issue by offering financial services such as digital wallets and microloans, enabling financial inclusion for those previously excluded.

💡Financial Inclusion

Financial inclusion is the effort to provide affordable financial services to all individuals, particularly those who are underserved by traditional banking systems. The video emphasizes how super apps like Grab and Gojek are providing basic financial services, like microloans and digital wallets, to unbanked individuals, driving financial inclusion in Southeast Asia.

💡Micro Lending

Micro lending refers to the provision of small loans to individuals or small businesses, often without the need for traditional credit checks. The video explains how Grab and Gojek are beginning to offer microloans to small businesses, enabling them to grow and participate more fully in the economy, especially in rural and underserved areas of Indonesia.

💡Ride-Hailing

Ride-hailing services allow users to book transportation through a mobile app. Grab and Gojek originally launched as ride-hailing companies but have since expanded their services to include food delivery, digital payments, and financial services. Ride-hailing remains a core service that initially attracted users to these platforms.

💡FinTech

FinTech, or financial technology, refers to the use of technology to deliver financial services. The video positions Southeast Asia, particularly Indonesia, as a burgeoning center for FinTech, where companies like Gojek and Grab are revolutionizing how financial services are provided to both individuals and businesses, often bypassing traditional banking institutions.

💡Cash Economy

A cash economy is one where most transactions are conducted using physical money rather than digital or electronic means. The video highlights that Indonesia's economy is predominantly cash-based, with many people, including small business owners, traditionally handling large sums of cash. However, super apps are working to shift this behavior toward digital payments.

💡Regulatory Challenges

Regulatory challenges refer to the legal and compliance hurdles that companies face, particularly when entering heavily regulated industries like financial services. The video mentions how Grab and Gojek, much like big tech companies in the US and Europe, will face increased scrutiny as they expand into financial services, which involves more stringent regulations than ride-hailing or food delivery.

Highlights

Super apps like GoJek and Grab are revolutionizing Southeast Asia’s digital economy, especially in mobile payments.

GoJek and Grab initially started with ride-hailing and food delivery services but have expanded into digital financial services.

Southeast Asia’s population of 650 million, with most accessing the internet via mobile phones, is a huge market for digital services.

In Indonesia, the world’s fourth most populous country, GoJek and Grab are significantly impacting small businesses by offering integrated payment services.

Business owners like Roberto Ko experienced rapid growth in sales after signing up with GoJek’s payment partner Ovo.

Digital platforms like GoJek are helping individuals like Emma, a masseuse, earn far more income than traditional jobs.

Big investors are pouring billions into these companies, though they are still in growth mode and not yet profitable.

Both GoJek and Grab recognize that the key to future profitability lies in digital payments, not just in service offerings.

GoJek and Grab are playing a major role in Southeast Asia’s digital financial revolution, especially in Indonesia.

Financial inclusion is being improved as GoJek and Grab offer basic financial services to the unbanked population.

Indonesia is a key FinTech hub, with a large population that primarily operates in a cash-based economy, presenting a massive opportunity for digital transformation.

Many small businesses and individuals in Indonesia are now digitizing their transactions, including accepting payments through mobile apps.

Traditional banks have struggled to reach the unbanked population, but platforms like GoJek are filling that gap with accessible financial services.

The shift to digital payments is slowly but steadily changing behaviors in Indonesia, with a growing acceptance of non-cash transactions.

Even religious institutions and government services in Indonesia are now accepting donations and payments via mobile apps.

There are concerns that the dominance of GoJek and Grab could lead to regulatory scrutiny, much like what their Western counterparts face in financial sectors.

Transcripts

they're super apps at the forefront of

mobile tax and they're not based in the

u.s. or China but Southeast Asia go

chicken grab started as uber clothes

carrying passengers and delivering food

now they're an indispensable part of

daily life but the rivals are also

leading online payments revolution is

this the future of digital banking

[Music]

Southeast Asia has a population of 650

million and for most people here the

only way to get online is a mobile phone

for Girja can grab that's a huge market

one that's helped them to grow into

multi-billion dollar companies Indonesia

the world's fourth most populous country

is where the battle is most intense

their apps have helped small businesses

like Roberto ko to expand and thrive

Brewery says that seems signing up with

payments provider ovo in 2018 her sales

have taken off she now delivers as far

as 20 kilometres away

[Music]

[Music]

Emma trained as a masseuse but the only

job she could find while living in the

same city as her children was to work in

a laundry earning just two dollars a

month by linking with go jack she's now

doing what she was trained to do and

earns about 200 times more patents had

to hurry to Peking rat Rattus Rattus

lima full uri puss and buy to a lettuce

what's more her husband johannes works

full-time as a go jack driver after

finding he could earn more doing that

than selling baby food the size and

scale of the opportunity hasn't gone

unnoticed big-ticket investors have

spent billions to fuel Gajic and graves

expansion but like other fast-growing

internet startups actual profitability

is an aspiration rather than a short

term or even medium term goal

the companies are burning through cash

as they attempt to reach more and more

consumers offering ever more options and

what they've realized is that these

services aren't the real prize the route

to profitability is the system that

underpins them all digital payments the

transformation taking place in Indonesia

goes beyond ride-hailing food delivery

even massages on demand to companies

that didn't exist a decade ago are

inserting themselves into the daily

lives of Indonesians in a way that is

inconceivable to those living in Europe

or America gorgeou can grab essentially

Southeast Asia's answered a big tech are

radically transforming the way money

moves around Indonesia this is a digital

financial revolution ovo works closely

with grab I may be biased but I think

Indonesia is the center of FinTech right

now we see what's happening the in

Europe it's about cards it's about Bank

if you look in China and India it's

really completed now with the the

FinTech evolution that went away the

next biggest society is Indonesia

grab-and-go Jack offer basic financial

services to those without a bank account

they're evil it can be topped up

anywhere but now they're moving into

core banking services like business

loans and micro lending I would like to

see a world where most Indonesians have

access to some sort of accounts and

accessing you know financial products

will be as easy as as you know you just

click on buy things but Indonesia's

population of 264 million is spread

across 17,000 islands less than half of

those people have a bank account and

even now most of Indonesia's economy

runs on cash digitizing will take a

radical change of mindset pomo runs one

of the most popular food stalls in the

central Javanese city of Semarang I

actually new job

my salary too young salmonella confirmed

Alisha Elena top Italian male 2

completely taken come up you can accept

he used to deal only in cash and he even

paid for a new home with $100,000 worth

in notes but primo has now gone digital

and runs his business almost entirely

through an app due to losses and through

to novocaine are Opaka ones I have to

sort of unit economy tomorrow we could

go for one would be fun traditional

banks have found it hard to provide for

people like primal but is linked with

go-jek makes them a far more attractive

prospect who people really - if you say

laputan around public official and a new

heritage in ghana under bank and

unbearable in country is so huge it's

more than 50 percent right now it's a

huge opportunity on its own I think our

enemy is cash people behaviors is still

toward cash it's actually a big

opportunity for us to change this

behavior toward a better payment

community these digital payment

platforms are spreading through the

economy the l.joe dban have been

Mayfield living on the streets of

simmering for more than a decade

dedicate our economy Mandela million you

look there where you belong

[Music]

Muraki

[Music]

yes Elena Qataris are separa damn

currents party artists artists like

selenium commodity could bury MJ - yeah

we need this current constant Omega T

goodbye

[Music]

religion is getting in on the act to the

Biderman mosque now gets nearly a third

of its donations through mobile apps

even government services can be topped

up by phone

critics say the two companies are

creating a jewelley with huge influence

like their beat tech peers in the US and

Europe this dominance may result in

greater scrutiny well I think the

regulatory challenges faced by big tech

are to some degree common across markets

insofar as their core use cases you know

ecommerce ride-hailing social messaging

and so on for the most part not really

stringently regulated to begin with

obviously moving into financial services

anywhere involves quite a lot of

regulatory oversight and as a

consequence many of these companies are

not really that well designed from the

outset for that level of supervision

Indonesia used to Center its tech

ambitions on manufacturing but within a

few years grab and go Jack have changed

that they may have started out as

copycats but it's now the Western peers

that are looking to Asia it's here they

can get a sense of what's possible in

the next phase of the internet

revolution