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Go-Jek to launch service in Vietnam through local partner

Indonesian ride-hailing firm providing knowhow, capital and tech to tap region's fastest-growing economy

Hundreds of motorists are waiting for a traffic light to turn green on a street in Ho Chi Minh City, Vietnam. (Photo by Ken Kobayashi)

HO CHI MINH CITY -- Indonesia's ride-hailing major Go-Jek plans to launch its services in major cities in Vietnam in September through its local partner, Go-Viet.

A Go-Viet representative told the Nikkei Asian Review that the company launched Wednesday a trial service in 12 districts of Ho Chi Minh City. The company is set to officially launch its operation in September in Ho Chi Minh, Hanoi and possibly in Danang, it said. It plans to provide services including motorcycle-based ride-hailing service Go-Bike and delivery service Go-Send.

To launch its services in Vietnam, Go-Viet said it has received knowledge, expertise, technology and capital investment from Go-Jek. Industry insiders said that, to ensure a smooth takeoff, Go-Viet has also hired former executives of Uber, which left Vietnam after the U.S. company sold its Southeast Asian business to bigger regional rival Grab in March. Go-Viet declined to comment on its hiring strategy.

The company plans to offer services under the local brand name of Go-Viet. The company's apps, helmets and uniforms will be a vivid red color, to differentiate it from Grab, the biggest player in Vietnam following its merger with Uber.

The company has started to offer incentives to secure drivers, including ex-Uber drivers, such as free uniforms and fare support of $1.27 per ride.

Co-founder and CEO Nguyen Vu Duc said Go-Viet aims to be the biggest multi-services platform provider in Vietnam, and will follow international standards based on Go-Jek's technology.

Go-Viet expects to offer "Go-Jek's extensive ecosystem of 18 diverse services" such as ride-sharing, service e-payments, and cleaning and washing hiring services. The platform allows users to order several services at the same time, or order more than one bike at a time, an important advantage compared to other apps in the market, according to the company representative.

Its parent Go-Jek is aggressively making inroads into Vietnam, the fastest growing economy in Southeast Asia, where technology-savvy consumers who use smartphones account for 84% of 120 million mobile subscribers.

Go-Jek had received funding from several investors, including Astra International, Warburg Pincus, KKR, Meituan-Dianping, Tencent, Google and Temasek. The company announced that it will spend $500 million from fundraising to start services in Vietnam, Thailand, Singapore and the Philippines on its global expansion after Uber's exit from Southeast Asia.

CEO and founder Nadiem Makarim said that operations in new markets, such as Vietnam and Thailand, will be run by local founding teams. "The company strategy is to combine the world-class technology developed by Go-Jek with the in-depth market knowledge and expertise of the local teams, to create local businesses that really understand consumers," Nadiem Makarim said in a press release in June. In Vietnam, Go-Jek's localized services is supposed to be managed by locals who truly master the markets and competitors.

(Nikkei)

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