Page 9 - AeM_August_2020

RESEARCH
For Gojek and Grab, this has meant a reorganization of The move highlighted how critical food delivery ANALYSIS
operations and a closure of some low-profit services, services have become during the pandemic, with TRENDS
along with those that would struggle to comply with Uber’s first quarter results showing that while demand
social distancing measures. For example, Gojek for its ride-hailing service was down by 80% year-on-
announced in June that it would lay off 9% of its year, bookings on its UberEats platform were up by
workforce and close GoLife, which offers household more than 50%.
cleaning and on-demand massage services, and
GoFood Festivals, the arm that operates physical food However, despite this recent fall in demand, transport
halls. services are expected to remain a crucial aspect of
super apps once the pandemic subsides, as they have
The decision came on the heels of Grab’s decision to traditionally been the companies’ largest earners.
lay off 360 employees – around 5% of its workforce –
and an announcement that it will close some “non-core Financial services tipped for growth
projects”.
In addition to food delivery, financial services are also
In an analysis published in late June, Fitch anticipated expected to play an increasingly important role in the
that the companies may also look to reduce spending plans of super apps moving forward.
or disband operations in the hotel booking and ticketing After introducing GoPay and GrabPay to process
segments, if sustained economic pressure continues.
payments for ride-hailing bookings, both Gojek and
Food delivery sees gains Grab have rapidly expanded their financial services into
point-of-sale and online payments, as well as ride
But while the companies are cutting back on some insurance for its riders and drivers, travel insurance,
segments, Fitch expects them to “refocus resources and business loans for small and medium-sized
into three core businesses: ride hailing, food/grocery enterprises.
delivery and payments”.
"Access to services including affordable health care,
Food and grocery delivery services have proved to be insurance, smart mobility and financial services
big winners in the pandemic, with demand increasing remains a key barrier [to growth] in the region," Ming
significantly as consumers sought to adhere to social Maa, President, Grab, explained. "These are issues
distancing guidelines and avoid crowded supermarkets. that multi-service tech platforms must target as they
expand their offerings to give users greater
On the back of rising food delivery orders and a fall in convenience and choice."
ride-hailing demand, Grab's two-year-old food delivery
platform overtook the established transport service in Given the increase in e-commerce that has
2020 as its main business line. accompanied the pandemic, the South-east Asian
market leaders have made moves to further expand
While this meant that some taxi drivers lost their jobs, their financial footprints.
the company says that 150,000 switched over to
become delivery drivers. In April Gojek finalized the acquisition of local
Indonesian payments start-up Moka, in a deal
The trend towards food delivery was also felt by Gojek. estimated to be worth $130m, while in June it was
confirmed that Facebook and PayPal were participating
“Many industries were directly affected by the Covid-19 in Gojek’s Series F round of financing, which had
pandemic. Notably, ride-hailing apps witnessed a raised around $3bn.
decline in use as Indonesians began to self-isolate,”
Gojek’s co-CEO, Kevin Aluwi, said. “However, the Analysts have suggested that the investment could be
isolation period has simultaneously enabled expansion strategic and that the US duo could be looking to
in other industries, such as food, grocery, and package further develop Gojek’s payments business.
deliveries, as people turned to mobile and online
purchasing options.” For its part, Grab – in partnership with Singaporean
telco Singtel – is vying for one of two digital banking
This shift has not been restricted to South-east Asia or licences to be allocated by the Monetary Authority of
emerging markets, with Uber acquiring Postmates, the Singapore before the end of the year. ◊
fourth-largest food delivery service in the US, for
$2.65bn in early July. By Oxford Business Group

9 August 2020: people-oriented communication strategies and social networks