Grab officially confirms merger talks with Gojek
Potential to dominate Southeast Asia delivery if successful
[Asia Economy Jakarta Correspondent Sujin Choi] Southeast Asia's largest delivery service companies, Gojek and Grab, are reportedly in merger talks. Each company has 30 million and 45 million customers respectively, and if the two merge, a mega delivery company is expected to be created. However, due to the large scale, concerns have also been raised that market monopoly harms such as deterioration in delivery quality and price increases may occur.
According to local media including The Jakarta Post on the 15th, Grab's co-founder and CEO Anthony Tan reportedly showed employees a document stating "Grab may acquire a competitor." As rumors about the Gojek merger grew, CEO Tan formalized the acquisition of Gojek. He said, "Grab's business pace is good, and regarding merger rumors that can happen in any business, Grab will be in the position of acquiring."
If the two companies merge, they will secure 75 million customers in Southeast Asia. In particular, they are expected to dominate more than 90% of Indonesia's delivery market. According to market data analysis firm Statista, Gojek's market share in Indonesia's delivery market is overwhelmingly high at 79%. Grab follows with 14.7%, and Uber has 6.11%. Grab is larger across Southeast Asia, but Gojek holds a clear advantage in Indonesia.
For now, competition authorities are cautious. Indonesia's Business Competition Supervisory Commission (KPPU) is evaluating the potential effects and adverse impacts that may arise if a specific company expands its market share. KPPU Chairman Guntur Saragih said that if the Grab-Gojek merger proceeds, a notification must be given 30 days in advance. Especially, concerns about monopoly harms have been raised. Indonesia's Institute for Economic and Financial Development (Indef) assessed that the overheated competition between Gojek and Grab benefits business quality, operations, and marketing costs but negatively affects consumers and smaller competitors, as well as limiting employment.
Pitch Solution forecasted that the Grab-Gojek merger and acquisition (M&A) would ease overheated competition and be positive for the financial capacity of both companies, but thorough review to prevent monopoly will be accompanied.
Gojek has consistently remained silent about the possibility of such a merger. Gojek's co-CEOs Kevin Aluwi and Andre Soelistyo emphasized in a memo to executives that "Gojek maintains a solid financial structure and is under no pressure to merge." Gojek also recently announced that it achieved its highest revenue in its core business.
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