Will Gojek’s ambitions in Vietnam survive a merger?

Amid much fanfare, Gojek officially entered Vietnam through its brand GoViet in September 2018. The launch ceremony even included the participation of Indonesian President Joko Widodo and Gojek founder and CEO Nadiem Makarim.

Makarim, the visionary leader behind Gojek, noted that “GoViet incorporates Gojek’s world-class technology” and that the Indonesian side would provide “long-term” financial support for its Vietnamese counterpart, according to a report on Nikkei Asian Review.

It made sense for Gojek to make Vietnam, the second-most populous country in Southeast Asia, its first overseas market. In his speech delivered at the World Economic Forum held in Hanoi that same month, Vietnamese Prime Minister Nguyen Xuan Phuc stressed that Gojek and GoViet’s partnership embodied the spirit of ASEAN collaboration.

But Gojek’s two-year ride in Vietnam clearly did not match those lofty hopes.

Two CEOs departed from the unit within a year, and such instability hampered all its efforts to pose any significant challenge to Grab.

In August, Gojek finally unified its brands in Vietnam and Thailand, with Gojek co-CEOs Kevin Aluwi and Andre Soelistyo both reaffirming a long-term commitment to Vietnam. The Indonesian decacorn also tapped the former chief operating officer for GoViet, Duc Phung, as its new country general manager.

With Grab and Gojek now reportedly making progress on a potential merger, however, questions are being raised about whether it’s worthwhile for Gojek to hold on to its international markets such as Vietnam, where Grab is dominant and where various verticals are crowded with competitors.

Gojek declined to participate in any merger-related story.

Right timing

In May 2018, Gojek announced that it would invest US$500 million in four markets: Vietnam, Thailand, Singapore, and the Philippines, where local companies would get to “determine their own brands and identities,” the company said.

GoViet was highly regarded because of its financial backing and technical support from Gojek.

The timing was perfect for competitors to challenge Grab in Vietnam.

In 2018, Grab was entangled in a lengthy lawsuit with Vietnamese traditional taxi company Vinasun. The long-disputed debacle cost the ride-hailer more than US$200,000 in fines in addition to widespread media scrutiny. Grab’s regional acquisition of Uber at the time also raised the eyebrows of domestic regulators.

Too late to the game?

Potential implications