Photo by Go-Jek

JAKARTA (TheInsiderStories) – Chinese e-commerce provider JD.com Inc. (JD.O) , unit of investment company Tencent Holdings Ltd. has invested US$100 million in Indonesian ride-sharing app Go-Jek. Previously, Tencent had invested around $150 million in Go-Jek.

The move marks the company’s accelerated expansion into Southeast Asia followed its competitor. In August 2016, Go-Jek has raised $550 million fund from global private equity firms U.S’s KKR & Co LP (KKR.N) and Warburg Pincus LLC [WP.UL] as well as venture capitalist Sequoia Capital and JD.com.

Previously, CEO Go-Jek Nadiem Makarim admitted, his company need investment around $1 billion to compete its competitor U.S’s Uber and Malaysian Grab. With new funds from JD.Com, one of the future unicorn in the country has pocketed around $800 million.

JD.com is set on making sure it doesn’t get left behind in the market through its Go-Jek investment. In return, Go-Jek is likely to gain from JD.com’s expertise in managing the nuts and bolts of the ecommerce business, including shipping logistics and inventory management, should it decide to expand its efforts in that sector.

Go-Jek got its start in 2010 as an on-demand transportation platform for motorbikes. However, Go-Jek’s portfolio of services has been broadly expanded since then to include grocery delivery, courier services, home cleaning, massages and food services.

Go-Jek claims to have over 200,000 drivers across some 25 cities in Indonesia. With a population of more than 250 million, Indonesia is the world’s fourth most populous nation and the largest economy is Southeast Asia.

Minister of Information and Communication Rudiantara has said that Indonesia wants to create lot of unicorn in e-commerce business with total assets more than Rp10 trillion. To support the goal, President Joko Widodo government allowed foreign company to have 49 percent of stake in local e-commerce player through a negative list rules has been launched in 2016.

Indonesia eyeing e-commerce become a market worth an estimated $130 billion by 2020 from now around $8 billion.

eMarketer estimates there will be 36.2 million digital buyers in the country this year, when retail ecommerce sales will total $8.21 billion. However, the ranks of buyers will swell to nearly 74 million by 2021, when $18.07 billion will be spent on retail ecommerce.

(Written by Linda Silaen, Email: linda.silaen@theinsiderstories.com)

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