This week Facebook and PayPal announced investments in the Indonesian ride-hailing app Gojek. The two companies join Google and China’s Tencent as investors in the platform, which actually does a lot more than ride-hailing.
While its roots are in ride-hailing, Gojek calls itself a “super app.” This means it aspires to become an all-in-one platform for everything from ride-hailing to food delivery, banking and mobile payments, and much more.
Gojek’s chief rival in the region, Singapore-based Grab, also has super app-bitions.
It’s worth noting that Indonesia has a 268 million population. And it is one of Facebook’s biggest markets, with 130 million users in 2019, according to Statista. For its part, Gojek claims 170 million users throughout Southeast Asia. And the company is valued at roughly $10 billion, TechCrunch reported.
Facebook and PayPal both declined to reveal the amounts of their investments.
Exponential Digital Payments Growth
Of course, the Asian region’s fast-growing digital payments market is an obvious underlying motivator for the investments.
In a blog post announcing the investments, Gojek says the money will support its effort to become a mobile payments leaders in the region.
“With digital payments adoption primed to accelerate exponentially, the resources of some of the world’s leading global tech businesses will be combined with the local focus and technology of Gojek to benefit millions of businesses and people across Indonesia and Southeast Asia,” Gojek wrote in the post.
On its own blog, Facebook offered this explanation.
“This investment will support Facebook and Gojek’s shared goal of empowering businesses and driving financial inclusion across the archipelago. WhatsApp helps small businesses communicate with customers and make sales, and together with Gojek, we believe we can bring millions of people into Indonesia’s growing digital economy.”
Facebook clearly wants to create revenue opportunities for its popular but under-monetized WhatsApp messaging app. One route to revenue is through a payments relationship with Gojek’s GoPay service. Notably, WhatsApp has 39 million users in Indonesia.
For its part, PayPal sees the investment as an opportunity to expand its financial services in the region. Here is a statement from Farhad Maleki, PayPal’s Head of Corporate Development and Ventures for APAC.
“Southeast Asia is at an inflection point in digital adoption that creates new opportunities to deliver financial services to previously unbanked merchants and consumers. We could not be more excited about entering into this strategic relationship with Gojek to expand access and provide new experiences for our collective customers in this dynamic market and around the world.”
Be Like WeChat
We think Facebook’s Gojek investment may also be a building block of a longer-term vision.
Facebook CEO Mark Zuckerberg has openly expressed his admiration for WeChat’s success as a super app juggernaut in China. Regional payers like Gojek and Grab have WeChat-like aspirations. WeChat is essentially Uber, Facebook, Messenger, Venmo, Tinder, and almost any app you can imagine rolled into one.
Besides, Facebook has been moving in the super app direction for some time now. Just go down the super app checklist and you will see. Messaging, commerce, dating, community, and so on. Facebook has checked most of the boxes.
So what does all this interest in super apps suggest? Well, one possible explanation is Facebook’s long-term future will be more about subscription and transaction revenue. And thus it will be less about advertising.
We suggest you watch this video to get a better sense of the power of WeChat. It offers a quick and helpful synopsis of what WeChat is and why it is such a dominant force in China. And also some reasons why the app is controversial.