Indonesia-listed tech giant PT GoTo Gojek Tokopedia Tbk (GoTo) has decided to terminate its Vietnamese operations from Sep 16, 2024, according to an announcement on Wednesday.
The move is part of the company’s plan to focus on areas and geographies with higher sustainable growth potential, which will ultimately help GoTo meet its 2024 adjusted EBITDA breakeven target.
The departure from Vietnam follows multiple efforts by GoTo to expand its operations in the country, where it started in 2018 under the brand GoViet. In addition to motorbike ride-hailing, food delivery and courier services, GoTo acquired local e-wallet WePay in 2020 but was unable to roll out its financial services in Vietnam.
Last year, GoTo had inked partnerships with the Vietnamese electric vehicle (EV) startups DatBike and Selex Motors for its mobility offerings.
Since its entry into Vietnam, the company has gone through multiple changes in its country leadership, the latest being Sumit Rathor replacing Duc Phung as general manager of Gojek Vietnam. Gojek Vietnam had been headed by two other executives.
DealStreetAsia understands that key leaders of Gojek Vietnam have quit in the past few months.
Vietnam contributed less than 0.5% to GoTo Group’s GTV in Q2 2024.
The Vietnamese market, which is fragmented with many competitors, contributed less than 0.5% to the GoTo Group’s Gross Transaction Value (GTV) and 2% to the GTV of on-demand services in Q2 2024. Therefore, the decision to drive out of Vietnam is not expected to have a significant material impact on the company’s overall operations, business performance, or financial condition.
It has been no walk in the park for Southeast Asian tech giants in Vietnam. In July, Grab stopped its Moca e-wallet services, a move it said will help it achieve “sustainable growth”.
Other players in the on-demand ride-hailing and delivery space include ShopeeFood, and local companies Be Group, Vingroup founder-backed GSM, Loship and Ahamove.
Another regional on-demand delivery services provider that exited the Vietnam market is Baemin, a brand of German food delivery giant Delivery Hero.
GoTo entered the Vietnam market in 2018. It also set foot in Thailand and Singapore in the same year, marking its expansion in Southeast Asia. GoTo’s expansion was fuelled by $500 million of funding from big investors, including KKR, Warburg Pincus, Astra International, Google, Temasek, and others.
In 2021, GoTo sold 100% of its stake in GET (Gojek in Thailand) to AirAsia Group for $50 million. With the selling of GET and now the closing of its Vietnamese operations, GoTo has a presence only in Indonesia and Singapore.
GoTo initially planned to enter the Philippines market but the move has been thwarted by regulatory challenges surrounding foreign ownership.
For the six months ended June 30, 2024, GoTo narrowed its losses by 61%, showing significant progress on its profitability target. GoTo’s losses for H1 2024 stood at 2.85 trillion rupiah ($174.3 million), compared with 7.2 trillion rupiah in H1 2023.
