CORPORATE ACTION - Capital market analysts opine that the presence of online food delivery (OFD) market leader, GoFood on Tokopedia app will further strengthen the business fundamentals of PT GoTo Gojek Tokopedia Tbk (GOTO).
The integration of GoFood on Tokopedia is a concrete example of the synergy between on-demand and e-commerce segment of GOTO Group, which also owns the financial technology segment for payment in both Gojek and Tokopedia apps.
The innovation has been considered a concrete step for ecosystem synergy and cross-selling of the big digital company in Indonesia. According to the Associate Director of Research and Investment of Pilarmas Investindo Sekuritas, Maximilianus Nico Demus, GoFood's synergy with Tokopedia increasingly shows the improving synergy in the ecosystem. The efforts are aligned with the management’s focus to reach more consumers.
"This is another step to build a large ecosystem. Moreover, Tokopedia has started its path to be one of the super-apps too. Everything is available there. Now consumers can shop GoFood on Tokopedia, which will then be delivered by Gojek’s fleet and paid by GoPay. Imagine how big the ecosystem is," he said in Jakarta (15/8/2022).
According to Nico, this synergy will also make GoFood, the current market leader of OFD, even stronger. “It's getting stronger because those who haven't installed the GoFood application can now order via the Tokopedia application," he said.
Based on JAKPAT research results released in July 2022, 61% of respondents said that they mostly use GoFood to order food.
Another research by Tenggara Strategic in June 2022 stated that GoFood is the respondents’ top of mind of online food delivery and has the largest contributor in the online food delivery market share.
Samuel Sekuritas Indonesia’s analyst, Muhammad Farras Farhan stated the presence of GoFood on the Tokopedia application was in line with the cross-pollination strategy (synergy between platforms) set by GOTO to accelerate profitability. "With this, the activity (transactions) will increase," he said.
Farras added that the cross-pollination strategy by integrating GoFood on Tokopedia will eventually have a broader impact to the GOTO ecosystem.
According to his research, Farras believes that GOTO's Gross Transaction Value (GTV) growth may potentially reach IDR 710 trillion in 2022 compared to the realization of IDR 461 trillion in the previous year, mainly due to the implementation of this hyper-local and cross-pollination strategy.
Furthermore, Nico explained, GoFood integration will also create a positive impact to the MSME merchants. “Since the pandemic began, Gojek has been a reliable service for people to fulfill their needs,” he added. It’s reflected in the results of the Demographic Institute Research, Faculty of Economics and Business, University of Indonesia (LD FEB UI) at the end of 2021. It noted that revenue for GoFood MSME partners in 2021 had increased 66% from the previous year.
The presence of GoFood on the Tokopedia application is also considered a sound business strategy to optimize user synergy on each platform. "There is a large room for growth, especially for so many Tokopedia users who have not installed the GoFood application. At the same time, it can drive more users to GoFood merchants as they now can reach wider market through Tokopedia," Nico said.
The huge room for growth was reflected in GOTO’s earnings report in the first quarter of 2022, which noted that the overlapped users of Gojek and Tokopedia just reached 21% or around 11.6 million users. The cross-selling strategy has successfully grown the overlapped users by 37%.
Before GoFood's integration on Tokopedia, GOTO has implemented the cross-selling strategy across platforms by launching GoSend Car to deliver Tokopedia packages, GoKilat as the delivery method for Tokopedia, and the launch of GoPay as one of the payment methods on Tokopedia. Based on the official statement of GOTO, the company currently has four pillars of business strategy to accelerate its path to profitability. The first is to increase cross-selling sales between Gojek, Tokopedia, and GoTo Financial platforms. Second, using a hyper-local approach for logistics services and e-commerce fulfilments.
The third is to integrate financial technology (fintech) services across platforms. The last is to increase value-added services for co-driver, business partners, and customers.
