On Friday, Maybank Investment Bank upheld its optimistic assessment of Indonesia’s emerging economy, stating that it is headed in the right direction.
With a population of over 270 million and low household debt (9.9 percent of GDP as of September 2024), the research firm stated in a report that it believes Fintech, or the lending industry, will be a future development driver for the sector.
Maybank also pointed out that Go-Jek and Grab Indonesia are the two biggest players in the on-demand services (ODS) market, which is consolidating.
As the gap with smaller competitors grows, particularly in the food delivery sector, it was observed that ODS is a duopoly market in Indonesia.
It emphasized that although Xanh SM is now functioning in Indonesia, its fleet size will be constrained by 2025 due to the fact that it currently only has 3,000 taxi licenses and is primarily focused on the taxi industry rather than food delivery.
“We see competition in e-commerce is more intense than in ODS, as overseas players are aggressively expanding markets,” it said.
Additionally, even though it feels obtaining an operating authorization in Indonesia is difficult, it believes that if Temu is able to do so, competition in e-commerce would increase.
Additionally, it thinks Bukalapak is a viable option in the event that Temu chooses to buy an already-existing Indonesian e-commerce business.
GoTo is the most integrated local participant in the new economy, according to Maybank.
It projects that GoTo will make IDR 17.3 trillion ($1 billion) in FY25, an increase of 7% year over year, with the lending division accounting for 29% of that total.
It should be mentioned that GoTo wants to treble its loan from IDR 4.3 trillion ($264.98 million) a year ago by the first nine months of 2025.
With ODS gross transaction value (GTV) up 11.4 percent year over year to IDR 45.9 trillion ($2.83 billion) and net revenue up 82 percent year over year to IDR 7.9 trillion ($486.81 billion), GoTo saw positive developments in the first nine months of 2024. This translated into a net take rate of 17.2 percent (compared to 10.5 percent for 9M23).
With adjusted losses before interest, taxes, depreciation, and amortization dropping from IDR 3.7 trillion ($227.97 million) in FY23 to IDR 72 billion ($4.44 million) in the first nine months of 2024, GoTo is on track to turn a profit.
In the meanwhile, Maybank believed that getting the growth momentum back would depend on the management’s approach to Bukalapak.com (e-commerce).
For Bukalapak, e-commerce competition is very fierce, particularly from foreign competitors.
