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The digital market: The right balance between innovation and protection
When firms acquire a significant market share or dominance, companies with significant market power have the flexibility to set prices and determine product quality without the risk of losing customers or being exposed to competition.
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Click and buy: A Jakarta resident uses a device to shop on a local e-commerce platform on June 15. The digital market continues to thrive in Indonesia and Asia in general. (Antara/Muhammad Adimaja)
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n recent weeks, popular digital application Gojek has been the talk of the town as its users recently discovered the ability to communicate with each other within the app.
This exciting feature is an example of Gojek's innovative approach and product development in the market. Launched initially as a platform connecting users with courier and ride services on two wheels, Gojek has since expanded its services to include GoSend, GoMart, GoFood, GoPlay and many more.
With remarkable growth and a more than US$10 billion valuation, Gojek has grown from a small start-up to a global tech company. Moreover, the economic impact of Gojek (now known as GoTo) is significant and is estimated to have contributed Rp 349 trillion ($24 billion) to Rp 428 trillion to Indonesia's gross domestic product in 2022. This contribution amounts to between 1.8 and 2.2 percent of the country's economic output.
Innovation can be found in other Indonesian digital enterprises. Ruangguru, for example, has transformed education by making learning more accessible and affordable. It has helped close the education gap, improve quality, create jobs for teachers and contribute to the sector's growth.
Similarly, Halodoc has improved accessibility to health care by providing online consultations, medication orders and access to medical information. It has improved access to health care, especially in distant places, and has reduced the burden on physical facilities, which was critical during the COVID-19 epidemic.
These positive results have encouraged the Communications and Information Ministry to launch the "1,000 Digital Start-ups" movement nationwide.
Like a double-edged sword, innovation in Indonesia's digital economy has brought several benefits to the market and raised concerns about potential challenges to future competition. As innovation continues to grow, there is a corresponding increase in the risk of diminished protection for health and a fair digital environment. This is because innovation's positive outcomes and benefits often overshadow the potential risks and challenges related to the lack of market protection.
