While not a ride-hailing service like the ones operated by its main competitors in Indonesia, GoTo and Grab, Sea’s mobility play could add fuel to the already fierce rivalry among the three companies.
The feature announced last week allows Shopee users to use its app to hail taxis from Blue Bird, Indonesia’s leading taxi operator. The latest addition strengthens the existing business tie-ups between the two companies.
Digital payment service ShopeePay was accepted as a payment method on Blue Bird rides earlier in this year and the taxi company’s logistics service was added as a courier option for Shopee’s e-commerce business.
“This taxi ordering feature, which is part of Shopee’s digital products, will provide more convenience and comfort in users’ lives by utilising one Shopee application for various needs,” Daniel Minardi, head of brand management and digital products at Shopee Indonesia, said in a statement.
Sea, Shopee’s parent, has been locked in a super app battle with Singapore’s Grab and Indonesia’s GoTo in Southeast Asia. The key difference had been New York Stock Exchange-listed Sea’s lack of a mobility service.
While Gojek – one half of the merged GoTo – and Grab, listed on the Nasdaq in the US, started off as ride hailing companies, and that service remains their bread and butter, Sea was initially a gaming company. All have since become super apps that allow customers to access services ranging from ride hailing and food delivery to digital payments through a single app.
Sea, a rare case of a Southeast Asian tech company listing in the US, had benefited from growing investor interest in the region to quickly become Southeast Asia’s most highly valued tech company. But its share price has fallen by more than 40% since peaking in October, amid a downturn in tech stocks.
While Sea’s commitment to mobility services remains unclear, it might be the catalyst that turns the company’s stock market fortunes around, considering that online transportation is one of the most often used digital services in Indonesia.
Google, Temasek and Bain & Company forecast that digital transport and food services in Indonesia – Southeast Asia’s biggest economy – will grow into a US$16.8 billion market by 2025, an increase of 25% from 2021.
Blue Bird, on the other hand, will be hoping a partnership with a prominent tech platform like Shopee will boost its profitability, as it continues to struggle with the pandemic-induced slowdown.
Restrictions on the movement of people have significantly hampered the taxi company, whose earnings sank to a net loss of 161 billion rupiah (US$11.2 million) in 2020. In the first six months of 2021, sales fell 9% on the year to 1.04 trillion rupiah and its net losses continued.