Retailers, let's face the challenges
of innovation together

15
jan
2015
Matthieu JOLLY
Services & Innovation Manager
3 minutes
Despite its success, the Indonesian start-up cannot let the engine cool. Confronted with increasingly fierce competition, it has just revised its service offer with a view to becoming indispensable to Indonesians.

The facts

A survey published in 2015 gave Jakarta the ward for “the most congested city in the world” ahead of Istanbul and Mexico City. The direct consequence is the presence on each street corner of “Go-Jeks”, taxi motorbikes that can weave through bottlenecks. However, the service is still quite rudimentary. More often than not passengers don’t wear helmets, and they negotiate prices directly with the driver according to the amount of congestion on the roads.

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Services

 

 

An open road for a start-up like Go-Jek. According to Dina Denso, user of the service, “with Go-Jek, you only need to input your destination and your current location – and it tells you the price, it’s unquestionably cheaper”. But the strength of the start-up, which was launched in 2011, also lies in its service policy. Each passenger has a helmet, a mop cap but also a mouth mask. Its competitor UberJEK – nothing to do with Uber – goes even further, imposing a smell test on its drivers so as not to bother the passengers! Go-Jek is such a success that competitors are flooding in, led by GrabBike. The direct consequence is a price fall of 4 to 3,000 rupees per kilometre.

To sustain its expansion, Go-Jek has opted to broaden its service offer for its passengers. Services like Go-Food, Go-Mart or Go-Tix emerged over the course of 2015. Last November, 3 new services appeared on the application: Go-Clean, Go-Glam et Go-Massage. Will it be a success? That is what L’Oréal is banking on, as L’Oréal Indonesia’s CEO Vismay Sharma has just announced a partnership with Go-Jek. It aims to create “2000 direct jobs in the year”.

Interpretation

In Indonesia as in the rest of the world, the explosion of new modes of transport that work with mobile apps is generating a significant shortfall in earnings for traditional companies. Following the complaints of transport operators, headed by Ojeks and taxis, the Indonesian government has passed a law explicitly banning Uber and Go-Jek. But customer wishes prevail. Given the reactions of users and champions of social media applications, it took less than 5 hours to get Joko Widodo Indonesian President to react and cancel the directive via Twitter! To the journalists interviewing him he said “the innovation demonstrated by the young generations should not be hampered. Applications like Go-Jek exist because society needs them.” Uber CEO Travis Kalanick no doubt agreed! In effect it seems unrealistic to try and restrict innovation, given that it is consumer-driven.

But the example of Go-Jek goes further. Despite its success, the company has opted for innovation by opening out to other sectors and lines of business. At the beginning of the year 2016, it is difficult to present the start-up as a mere motorcycle taxi firm. So with Go-Mart it offers its users the possibility of doing their shopping for them. If they don’t feel like cooking, they’ll bring a dish from their favourite restaurant through Go-Food.

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With Go-Clean, Go-Massage or Go-Glam, the paradigm is the same. Go-Jek is becoming a trusted third party and helps customers on a daily basis by delivering services at home. In the case of Go-Glam, the beauty adviser comes to the customer’s home or office for a manicure, haircut or colour. The time saving is self-evident for the customer and explains the success of services delivered through Go-Jek.

Go-Jek has in effect speculated on monetizing its drivers and customers through third parties. A way of ensuring an additional source of earnings while continuing to break down the barriers of retail. As long as it benefits passengers, no doubt that the adventure will continue.

Matthieu JOLLY
Services & Innovation Manager
Facing with the changes in retail, today's innovations help Matthew to think about tomorrow's relationship between the brand and the consumer.
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