The Indonesian startup ecosystem has always been exciting to cover, but in 2018, things heated up when ride-hailing giant Go-Jek officially enabled the use of its e-wallet service for transactions with offline retailers.
As part of its move to compete with Lippo Group-backed OVO, which stood proudly on the side of its rival Grab, last year we began to see the e-wallet system being available for use in street food stalls and supermarkets.
To top it all off, earlier this year, TCASH –the e-wallet service runs by government-owned mobile operator Telkomsel– announced its rebrand into LinkAja as part of its strategy to compete with OVO and Go-Pay.
The greatest bit about this announcement? It involved the participation of at least five state-owned enterprises (SOEs) from the banking and telco sectors, signifying our entry to the next level of the war: It is no longer just a competition between two well-funded startups. SOEs want a piece of the cake, and they want it now!
But just when you thought you can finally sit down and watch the match with popcorn in your hand, today we woke up to another surprising announcement: That Go-Jek and LinkAja have set up a partnership that includes the addition of LinkAja as a payment option in Go-Jek’s main app.
Upon hearing this news, our Surabaya-based junior writer Prisca and I collectively nodded our heads in understanding.*
If you can’t beat ’em, sleep with ’em, we agreed.
Sleeping with the enemy has been the spirit of this competition ever since it was first noticed by the public. Battling Go-Pay and OVO would be an uphill battle for each of these SOEs; this is why it would be much better for them to forget their differences and team up. And today, we found out that they have reached out even further by pulling Go-Jek to their side.
This move made a lot of sense, especially since Nikkei Asia Review has written about industry players’ scepticism of the cartel’s ability to win against Go-Pay or OVO.
“I doubt they will be able to make decisions with the same speed as private companies. It will also be difficult for state-owned companies to burn cash [for promotions and discounts] on the same level,” one unnamed source reportedly said.
If anything, for the rest of us, this latest move reconfirmed just how powerful these tech companies are. In addition to their ability to reach out to customers, these tech companies are also run in the way that SOEs (and its subsidiaries) are not, enabling them to innovate at an unbelievable speed.
Despite running the national campaign to promote cashless payments, it seems like the Indonesian government is never the leading actor in its own feature film.
Sounds promising, and as a part of the startup ecosystem, we would definitely love to applaud that. But as the great philosopher Uncle Ben eloquently puts it: With great power comes great responsibility.
*At least that is how I would like to imagine it. We are a remote team; we cannot really see what the others are doing in their respective cities.