Amazon and Indonesia-based Gojek are in early conversations about an investment by Amazon in Gojek’s delivery market and infrastructure.
While representatives from both companies withheld details, inside sources provided this update to Reuters and the Wall Street Journal.
Gojek, an on-demand mobility service and self-proclaimed super app, launched in Indonesia in 2010 and serves 260 million people.
“The company’s platform delivers everything from meals and groceries to cleaners, masseuses and hairdressers across Indonesia,” according to Pitchbook.
Gojek’s popularity reaches into five southeast Asian countries – Indonesia, the Philippines, Singapore, Thailand and Vietnam. This would be Amazon’s first investment in the Indonesian market, known for its early-adopters and fast-growing tech.
If the deal comes to fruition, this relationship would further Amazon’s presence in Southeast Asia. In 2017, Amazon launched Prime Now fast delivery in Singapore, making it one of the nine countries in the world where the two-hour delivery service is available.
Since Gojek’s Series F venture funding continues and its pre-money valuation is $8.4 billion, Amazon’s contribution to this round would follow other companies like Visa Inc., Thailand’s Siam Commercial Bank Plc and Mitsubishi Motors Corp.
There are logistical challenges to Amazon entering a country of 17,000 islands, but Indonesia’s e-commerce sales are currently worth $12.2 billion and projected to be $53 billion in the next five years. The Seattle-based e-commerce giant would also be in competition with online sellers Alibaba Group and Shopee.
Forrester Senior Forecast Analyst Satish Meena told CNBC that China-based Alibaba “wants to be the major player in this market, beating Amazon.” Such a rivalry could benefit consumers, but prove challenging for Amazon and detrimental to brick and mortar retailers.
Because neither Amazon nor Gojek have come forward to confirm the outcome of negotiations, analysts and investors are waiting to hear about Amazon’s increased presence in Southeast Asia and its potential link with Gojek’s on-demand services.