Lifestyle

Gojek To Cease Several GoLife Services In 2020, But Here's Why Less Might Be More For Them

Come 2020, Indonesia’s ride-hailing giant Gojek will be making several business changes to its GoLife arm.

GoLife is Gojek’s on-demand lifestyle app that offers services like beauty, massage, laundry, cleaning, automative, mechanic, among others, in Indonesia.

After about four years since launching the app, Gojek has decided to pull the stops on several of its GoLife services.

According to a notification on the GoLife app, the platform will stop offering GoLaundry (laundry), GoDaily (delivery for daily needs) services and its Service Marketplace starting from 31 December 2019.

Meanwhile, its GoFix (repair and maintenance) and GoGlam (beauty) will be terminated on 15 January 2020.

Moving forward, it will only focus mainly on GoMassage (spa and massage) and GoClean (house cleaning) services, which make up 90% of total orders on its platform.

Car wash service GoAuto will also remain on the app, except that it will be integrated with GoClean from 17 December 2019 onwards.

GoLife head Wesley Simatupang reasoned that this closure is because most of their GoLife services had “grown stagnant”, according to The Jakarta Post.

In a separate media statement, a Gojek spokesperson told Vulcan Post that “reviewing and optimising the performance of products and services is essential to meet the evolving needs of (their) consumers and for future growth.”

The firm added that they will continue to develop products that help to “remove life’s daily frictions” and meet consumer demands.

This Is Gojek’s Attempt To “Stop Burning Money”

Homegrown startup honestbee was in a similar predicament earlier this year.

On 31 January 2019, it suddenly announced that it will “temporarily pause” its partnership with FairPrice for an unspecified period of time.

Following that announcement, it made several other shocking announcements, including laying off 10% of its global headcount, halting its services in Hong Kong, Indonesia and the Philippines, as well as its food vertical in Thailand.

Beyond the changes in business operations, honestbee came under fire for “cash crunch” issues. It was later revealed that it owed almost S$1 million to ex-employees in unpaid salaries and over US$180 million to creditors.

Since the start of the year, honestbee continued to fall into a downward spiral and a leaked handover email from ex-CEO Joel Sng stated that honestbee has a “cash burn rate of approximately US$5-6 million per month“.

While it’s not clear what Gojek’s burn rate is, it seems that they are burning quite a significant sum of money, to the extent that co-CEO Andre Soelistyo declared in an October media briefing that the firm “should stop burning money“.

Separately, Michael Say, Gojek’s vice president of corporate affairs, announced that the firm plans to go public within the next three or four years.

For the initial public offering (IPO) to happen, their “financial reports must be entirely in the green,” he stressed. That said, they cannot afford to keep burning money.

Is Gojek The Next Honestbee?

It seems like shutting down these services is their attempt at reducing the burn rate, and this does not necessarily signal a death knell for the unicorn.

It’s a good move, in fact — killing what doesn’t work for the firm early on rather than continue to bleed more money in the long run.

That said, I don’t think Gojek will follow in the footsteps of honestbee because they are still financially viable.

In fact, Gojek reportedly raised over $1 billion from investors at a nearly $10 billion valuation in July this year.

In total, it has raised US$3.3 billion in funding over 12 rounds, according to Crunchbase.

With a huge war chest and a strong presence in the market, there’s no doubt that Gojek will continue to dominate in year to come.

As it streamlines its services to keep only the ‘essentials’, it presents a renewed opportunity for them to focus and grow on their anchor services.

Commenting on its regional growth, a Gojek spokesperson said, “(We have) seen unprecedented growth throughout Southeast Asia over the past year and our strategy to build an enduring, sustainable business is on track.”

“In Singapore, our focus for 2020 will be on enhancing our offering and service quality. Consumers here can look forward to new services and transport features, including an option to book different vehicle types, as well as additional services that are aimed at addressing consumers’ daily life frictions.”

Featured Image Credit: Gojek

 

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