- Indonesia's transportation start-up Go-Jek wants to expand its payments business to imitate the success of Alipay and WeChat Pay in China
- Go-Jek President Andre Soelistyo said the environment in Indonesia was ripe for cashless payments to take off
- The company also has plans to expand beyond Indonesia, potentially moving into markets like Thailand, Vietnam and the Philippines
While Go-Jek started off as a motorbike and taxi hailing company, it has expanded its products to include things like food delivery, groceries and payments. Users can spend on rides and other items inside the app using Go-Pay and the company is planning to expand that service aggressively, according to its president.
"Go-Pay is going to be the front product that will expand in a very aggressive way," Andre Soelistyo, Go-Jek's president, told CNBC's "The Rundown," adding, "In China you have Alipay and WeChat Pay (and) I think we want to replicate that kind of success in Indonesia."
Soelistyo said that the market in that country is ripe for cashless payments since its un-banked population is high and credit card penetration is low.
To be clear, a recent PayPal study found that cash is still the preferred method of payment in many parts of Asia. In Indonesia, more than 70 percent of the respondents to the PayPal study said they used cash most often.
But the potential for digital payments is high in Asia due to greater mobile penetration and connectivity, and the expected growth of the internet economy over the next several years.
For Go-Pay to emulate the success of Alipay and WeChat Pay, Soelistyo said, traditionally physical services need to be digitized to cut down friction in the system and add more uses for online payments. Those use cases include bill payments, in-game purchases, paying for digital products, travel tickets, trains and more.
"So there's a lot of things that can be added into the system and with Go-Pay, you add data as well, which is super important, especially in understanding your customer's behavior, merchant's behavior and to do all kinds of other stuff in the future," he said.
Currently, Go-Jek's fleet has more than 200,000 drivers and that includes motorcycles, cars and trucks. They are present in 50 cities in Indonesia and are backed major investors including Tencent, JD.com, KKR and Sequoia Capital.
When asked about Go-Jek's expansion plans, Soelistyo said the company was looking at a few markets that have a similar consumers and infrastructure to Indonesia. Those include Thailand, Vietnam and the Philippines, he said.
"We've been able to use a lot of the data that we collected from the products and services that we have to probably guess which products, or combination of products, would scale very quickly in those markets," Soelistyo said.
But the transportation service may not necessarily be the starting point for expansion outside Indonesia, he added.
"For instance, our Go-Food product now is actually very, very famous in Indonesia and that's also a daily use case that you can build a big platform from," he said. "If you look at all of Southeast Asia, food and transport are definitely top of the top in terms of the spending behavior and that's pretty common in those markets as well."