Mobile Drives Demand For App-Based Services In Indonesia

University of Sydney’s Michele Ford highlights the lessons marketers can learn from motorcycle taxi Go-Jek’s rapid growth in the mobile-app space.

Mobile technology is driving profound change in the transport sector, as evidenced by the global success of Uber and other ride-sharing platforms.

In Indonesia, a country often regarded as technologically conservative, motorcycle taxi startup Go-Jek is at the forefront of digital innovation. Since launching its app in January 2015, Go-Jek had tallied more than 17 million downloads by May 2016 alone.

“This is only the beginning, as mobile penetration rates continue to grow among Indonesia’s increasingly affluent middle class,” said Michele Ford, professor of Southeast Asian Studies and director of the Sydney Southeast Asia Centre at the University of Sydney. Ford recently presented on “The Go Jek effect” at the 2016 ANU Indonesia Update Conference, focused on Indonesia’s digital transformation.

Ford recently spoke to CMO.com about the lessons marketers can learn from Go-Jek’s rapid growth story.

CMO.com: How is Go-Jek capitalising on Indonesia’s high mobile penetration rates, widespread social media usage, and the growth of app-based marketing?

Ford: Transport in Indonesia is probably the sector where disruption is most obvious, and it is really only in the past couple of years that the change has been enormous. In the case of Go-Jek, which was established in 2010 and started operations in 2011, it originated as a phone service. It wasn’t until 2015 that the Go-Jek app was launched.

If you think about the impact it has had since then, the results are incredible. For example, the project claims to have over 200,000 drivers now, and the impact it’s having on consumers as well as providers of conventional transport is huge.

CMO.com: Is user demand driving the growth of app-based services like this, or is the high mobile penetration rate an indicator of a growth area in the Indonesian market?

Ford: It’s a combination of the two. The nature of the smartphone technology shapes the patterns of usage of internet-based and digital services. User demand is partly driven by technology and partly by Indonesia’s personal service culture. This makes this a natural fit, especially for the transport services sector.

In other words, the fact that Go-Jek is now accessible via an app is a logical extension of Indonesia’s informal service economy.

CMO.com: How has personalisation played into consumer perceptions of Go-Jek’s services?

Ford: I think personalisation is really important in a number of ways, especially when you consider that Go-Jek is a bike service, not a car service. Traditionally, this wasn’t a middle-class [mode of transport]. By making it a middle-class thing, it has generated a whole new group of consumers.

The fact that the driver is tied to some bigger entity and is in some way accountable makes people, especially women, feel safer. Go-Jek is also seen as a reliable brand because it’s on-demand. It’s about being able to get someone where you want them as opposed to having to find a car and bargain for it.

So it’s about ease of access, but it’s also cool, it’s modern, it’s all the things that middle-class people want to be, especially when you think about consumption as a way of signifying your social position. The image they’re going for is very much a sleek one. It’s about being linked, hooked in, digital.

CMO.com: Have marketers fully realised the potential of technology in such a booming service economy?

Ford: Go-Jek is a sign that marketers are catching onto that potential. If you think about it, Go-Jek is symbolic of a broader trend in big cities where people are starting to have trouble accessing all their personal services because of the traffic.

It’s really about creating a way for consumers to access these services in big, urban centres, and Go-Jek has taken it to the next level. The other services that Go-Jek now offers, like beauty and massage, are just the next logical step in the evolution of Indonesia’s economy, and marketers have already grasped that.

CMO.com: If Go-Jek is testament to the success of disruptive innovation in Indonesia’s transport industry, which other sectors stand to benefit from digital transformation in the future?

Ford: Indonesians are very open to app-based offerings and, let’s face it, we have a couple of good examples, but it’s still an area where we could do a lot more. If app-based services were tied into social media in some way, that would be great because people are already comfortable with that.

For Indonesian consumers in Jakarta, at least, this is the new norm. But it’s not just Jakarta that’s ripe for these services. Indonesia has several big cities that experience lesser versions of the same problems and certainly have the middle-class consumers to support spending in these areas.