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No more ‘burning cash': Gojek to improve user experience
Homegrown decacorn Gojek will stop “burning cash" and instead focus more on improving user experience to achieve sustainable growth, a top executive has said
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omegrown decacorn Gojek will stop “burning cash" and instead focus more on improving user experience to achieve sustainable growth, a top executive has said.
Gojek co-chief executive officer Kevin Aluwi made the statement in reference to the company’s food delivery service GoFood, digital payment platform GoPay and ride-hailing service in growing its customer base.
The strategy would be more effective in achieving sustainable, long-term growth, Kevin said on Tuesday alongside other Gojek executives at a press briefing in Jakarta.
In its bid to improve user experience, Gojek launched in mid-January three new features under its food delivery service, GoFood Pickup, GoFood Turbo and GoFood Plus, and integrated Google Assistant in its app.
GoFood Pickup is a self-pickup ordering facility that allows customers to order food at a restaurant for picking up later. GoFood Turbo is a 30-minute delivery service and GoFood Plus is a subscription service that offers limited-period discounts, while integrating Google Assistant means that customers can make their orders through verbal commands.
“Our industry, for the past couple of years, has focused a lot on promo, promo and promo, but improvements in our services are not yet proportional with our business growth,” said Kevin. He added that Gojek instead wanted to highlight GoFood’s diverse merchants and its quick delivery service.
GoFood transactions increased thirtyfold over the past four years and averaged 50 million completed orders per month at the end of 2019. In the fourth quarter of 2019, more than 20 million customers in Indonesia used GoFood, a twofold increase from the same period in 2018.
The food delivery service currently offers 16 million food and beverage items and about 500,000 partner merchants via the Gojek app.
Gojek chief food officer Catherine Hindra Sutjahyo also stressed the company's shift in its approach to business expansion.
“We want, especially in year 2020, to focus more on, be more obsessive [about], customer experience,” Catherine said at Tuesday's briefing.
According to "Understanding the Indonesian Online Food Delivery Market 2019", a research published by Nielsen Singapore, 84 percent of respondents rated GoFood as the best online food delivery service in the country, 83 percent thought that GoFood had the greatest variety of merchants and 79 percent said it was the fastest food delivery service.
When asked to confirm that Gojek was moving away from promotions, Gojek chief marketing officer Ainul Yaqin told The Jakarta Post on Tuesday, “We are not saying [that] there won't be promos anymore, not necessarily.” He added that Gojek intended to drive customer satisfaction through its innovations rather than promotions.
The excessive reliance of technology start-ups on "cash burn" strategies like discounts and cashback rewards has long been a concern investors.
Venture capitalists are worried about the sustainability of a start-up's valuation that used the gross merchandise value (GMV) metric — the total volume of sales in terms of transaction value. They instead suggest that billion-dollar unicorns should be measured by real revenue.
Just four months ago, Gojek announced that it would be shifting its orientation toward the profit-and-loss business model. At a limited media briefing on Oct. 24, 2019, Gojek co-CEO Andre Soelistyo said the company agreed “with those who say that we should stop burning cash”, and that customer incentives would be phased out gradually to ensure its profitability. (ydp)
