If you’ve been living in Indonesia for any length of time, you’ll know all about the most popular ride-hailing Apps of Grab and GoTo (GoJek). As a consumer they’re definitely convenient and certainly good value for money. But behind the scenes, things might not be so positive.
The Straits Times is reporting that Singapore’s Grab Holdings, once Southeast Asia’s most valuable start-up, is faltering behind the GoTo Group in the stock markets as it fights to gain ground on its Indonesian ride-hailing rival’s home turf.
The unprofitable companies are both struggling to convince investors of their moneymaking potential after staging their stock market debuts in recent months. Yet GoTo has fallen less than its competitor and its market value of about USD 26-billion is now twice that of its Singaporean peer. The companies are each set to report quarterly earnings.
Grab and GoTo have been locked in an expensive battle for dominance over the past several years. Grab still counts Singapore as its largest market even as it tries to expand in countries including Indonesia, Southeast Asia’s largest economy. GoTo is enjoying a leadership position in its home nation of more than 270-million people whose mobile-savvy consumers are shopping on its online-retail platform Tokopedia and ordering rides and food via its GoJek’s app.
The growth potential of Indonesia has helped GoTo outperform Grab, which became a publicly traded company through a merger with Brad Gerstner’s Altimeter Growth Corp in December. GoTo has lost about 3-percent since its initial public offering in Jakarta in April, while Grab is down more than 60-percent since combining with the US blank-cheque company.
“GoTo’s advantage as a homegrown Indonesian brand and its synergy with Tokopedia may let the country’s biggest tech firm defend food-delivery market share from Grab, the category’s leader in Southeast Asia, and improve profitability,” Mr Nathan Naidu, an analyst at Bloomberg Intelligence, said in a July 20 report.
Grab is scheduled to report second-quarter results before US markets open on Thursday, while GoTo is set to release results on Aug 30.
Sources: The Straits Times, Bloomberg