BANGKOK -- Indonesian ride-hailing unicorn Go-Jek has formed a joint venture with a local startup to mount a two-wheeled challenge to local players in Thailand's growing, multimillion-dollar food delivery market.
Go-Jek, which recently raised $1 billion from investors including China's Tencent Holdings to fund its Southeast Asian expansion, enlisted established ride-hailer Get for its move into Thailand.
The Indonesian company will bring investment and technology, while Get provides local expertise to expand food deliveries under its namesake brand.
An app released by Get last year for hailing motorbike taxis has found favor among Bangkok residents as traffic congestion worsens. The startup has amassed more than 20,000 merchants and 10,000 drivers.
"Then, we teamed up with Go-Jek and offer food delivery services," said Pinya Nittayakasetwat, a co-founder and CEO of Get. "We started our beta testing service for about two months, and we got thousands of consumers, which is a very good response."
Pinya and Nadiem Makarim, Go-Jek's founder and group CEO, declined to reveal their companies' stakes in the joint venture. Thai law caps foreign ownership in domestic companies at 49%.
Pinya said the venture will offer only three services initially -- food delivery, small parcel delivery and motorcycle taxi hailing -- unlike the broader range of services provided by Go-Jek in Indonesia.
"However, we are about to expand into payment service very soon," Pinya said, without offering details.
Thailand represents Go-Jek's third foreign entry after Singapore and Vietnam in terms of ride-hailing services. Apart from that, the Indonesian company valued at around $10 billion has established a foothold in the Philippines, but did so through an investment in a mobile payment service, not a ride-hailing platform.
Go-Jek used a different approach in Thailand compared with ride rival Grab, which stepped in a few years ago as a single brand with a single application that can be used across Southeast Asia and expanded in the country by acquiring the operations of another local ride-hailer, Uber.
In its latest move, Go-Jet chose to operate under a local brand "because we want to use the strong local expertise of Get Thailand, which knows the demand of the Thai people quite well, while we just put in funding and technology," Nadiem said.
As a Southeast Asian unicorn, the presence of Go-Jek in Thailand makes Get a serious player in the intensely competitive ride-hailing business, particularly for food delivery, according to Nadiem.
Kasikorn Research Center estimates the Thai food delivery market is worth $860 million a year and growing, due to changing consumer behavior amid the traffic woes. Kasikorn forecasts that growth at 11% to 15% a year, while the restaurant business grows 2% to 4% annually.
Go-Jek, by using the Get brand, competes with other major players, including Grab, Lalamove, Foodpanda and Lineman.
But Go-Jek's CEO downplayed the competition issue, saying the market has room to grow, as up to 65% of Bangkok residents have not tried food deliver apps.
"It is a blue ocean market, with great opportunity to grow, not only for us, but also our competitors," Nadiem said.