Merger creates GoTo for mobile payments in Indonesia

June 23, 2021

Jonathan Kriegel


The proposed merger of payments firm Gojek and eCommerce company Tokopedia valued at around US$18bn, highlights the potential of Indonesia’s digital economy and could form the basis of the country’s first Super App. The two firms are already close commercial partners, having worked together to accelerate Tokopedia’s eCommerce deliveries using Gojek’s local network of ride-hailing drivers since 2015.

The new entity will come under the control of a holding company, the “GoTo Group”, with the support of shareholders, which include Alibaba Group, Facebook, Google, PayPal, SoftBank, Telkomsel, Tencent and Visa (Gojek’s owners to receive around 58% of shares and Tokopedia the rest). Reports suggest GoTo will look to IPO on stock markets in both Jakarta and New York by the end of 2021 with a target valuation of US$35bn-US$40bn.[i]

A press release issued by Gojek and Tokopedia[ii] highlighted the combination of eCommerce, on-demand and financial services as the first platform in Southeast Asia to host all three in one ecosystem. It calculates that GoTo will account for 2% of Indonesia’s entire gross domestic product (GDP) based on a combined monthly active user base of 100m people making 1.8bn transactions worth US$22bn in 2020.

They also forecast that the market for on-demand transport and delivery, eCommerce and fintech services in Southeast Asia will top US$134bn in 2020. Both already claim a sizeable portion of that total and believe pooling their resources and engaging in joint marketing and service delivery activity will help them grab more.

Tokopedia was the sixth most popular mobile app ranked by monthly active users in January 2021, according to App Annie, ahead of Gojek in seventh place. The rival Indonesian online shopping platform Shopee, with which GoTo now hopes to compete better, came in fourth place. Figures compiled by GlobalWebIndex in the third quarter of 2020 suggest that 78% of Indonesian Internet users aged between 16 and 64 used shopping apps like Tokopedia and Shopee at least once a month, with 39% also using banking and financial services apps, including Gojek’s GoPay mobile payment app.

Big bets on future eCommerce growth

Gojek and Tokopedia see a bright future for eCommerce and mobile payments going forward, not just in Indonesia but also in the wider Southeast Asian region where they will compete with other “Super Apps” like Alipay and WeChat Grab and Lazada. Those assumptions look accurate based on the massive surge in online transactions fuelled by coronavirus lockdown restrictions in 2020, with enforced changes in the way people shop and pay for goods and services expected to persist post-pandemic.

Statista’s Market Outlook for eCommerce accessed in January 2021 records enormous growth in 2020, with 138m (around half of Indonesia’s entire population) purchasing consumer goods to the value of just over US$30bn, a figure up 49% over 2019. Statista’s Digital Market Outlook for Fintech puts the number of Indonesians making digitally enabled payment transactions at 130m, spending just short of US$36bn (up 28% year on year), with the average spend per user reaching US$275. Another report prepared by Google in partnership with Singapore’s sovereign wealth fund (and GoTo shareholder) Temasek alongside multinational consultancy firm Bain and Company projects that eCommerce transaction values increased 52% YoY from US$21bn in 2019 to US$32bn last year.

Smartphones and eWallets driving mobile payment adoption

The combination of high smartphone penetration, increased eCommerce activity and ready availability of electronic wallets (eWallets) will drive the value of mobile payments in Indonesia up considerably over the next few years. GlobalWebIndex calculates that most adults in the country (87%) purchased a product online in the Q320, and 79% did so using their mobile phones specifically (though the figures dip slightly for those over 55).

Much of the fourth-largest country’s 270m population remains unbanked, however, with only 49% of adults aged over 15 having an account with a financial institution. Money transfers for payments and remittances are pervasive, with 83% of persons above the age of 15 reporting sending or receiving a remittance or payment transaction in the previous month[iii]. The majority of these transactions happen in cash, which indicates a great opportunity for mobileenabled financial transactions. Mobile operators recognised this opportunity and launched mobile money services. Telkomsel was first, launching TCash in 2007; Indosat followed in 2008 with Dompetku. When XL launched XL Tunai in 2012, the three operators had been joined by a small number of third parties and banks also moving into the mobile money space. Since then the number of internet users aged between 16 and 64 using other mobile payment services like Apple Pay, Google Pay and Samsung Pay has risen to 29%, according to GlobalWebIndex.

Forecasts from Bank Indonesia suggest that eWallet transactions in the country will reach US$18.5bn this year,[iv] while India-based research firm Redseer predicts they will be worth US$25bn by 2023. Local players dominate the market, and Gojek was the most widely downloaded eWallet during 2019 and 2020, but rivals include OVO, Dana, LinkAja and i.saku. The pandemic saw more Indonesians use cashless methods to pay for bills, shopping and financial services as digital wallet providers branched out into insurance, loans and other fintech products. OVO reported a 267% increase in new users directly after the onset of coronavirus, for example, followed by a subsequent rise in new merchants and small to medium businesses using its platform (up 95% year on year in 2020).

Direct carrier billing (DCB) is gradually gaining in popularity in Indonesia as more digital merchants add the payment method as an option for their customers. Statista estimates the average monthly carrier billing transaction value in Indonesia between April 2019 and April 2020 at US$2, with average revenue per paying user hitting around US$4.60. Indonesian consumers can pay for apps and digital content on Google Play using DCB through carriers including Indosat, Smartfren, Telkomsel, XL/AXIS, and Tri. OTT video platform Vidio also allows consumers to pay for monthly service subscriptions and daily or weekly access to streaming movies, TV shows and live sports broadcasts.

The merger of Gojek and Tokopedia is certain to drive further eCommerce growth over the next few years, and all Indonesians are likely to adopt many different forms of mobile payments to fund their purchases in tandem.


[i] Gojek to Merge With Tokopedia to Create Indonesia Tech Giant, Bloomberg, 17th May 2021

[ii] Gojek and Tokopedia combine to form GoTo, the largest technology group in Indonesia and the “go to” ecosystem for daily life, Tokopedia, 17th May 2021


[iv] Indonesia e-wallet transaction to reach $18.5 billion in 2021 amid fierce competition, The Asian Banker, 9th April 2021

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