AirAsia’s US$50mil Gojek Thailand acquisition hints at deeper ties to come with Gojek

  • AirAsia’s stronger market presence in Thailand makes deal a natural fit
  • Strong presence in Malaysia, Philippines as well where Gojek is not in

AirAsia’s US$50mil Gojek Thailand acquisition hints at deeper ties to come with Gojek

Tony Fernandes, AirAsia Group founder and CEO has a soft spot for Thailand. It was the first market his Malaysia headquartered budget airline expanded to in Dec 2003. And yesterday, its acquisition of Gojek Thailand’s operations for US$50 million in shares of its AirAsia Super App, makes it the first major cross border acquisition in Tony’s ambitions to evolve AirAsia from an airline into a digitally powered Asian travel and lifestyle companion. Gojek will end up getting a 4.76% stake in AirAsia Super App.

The rich US$50 million valuation assigned to Gojek Thailand, which has reported losses in 2019 and 2020, raised eyebrows among those who know Tony and AsiaAsia to be hard negotiators with startups over valuation. Perhaps Tony has his eyes on a bigger prize.

The deal throws light on some natural synergies between the businesses of AirAsia and Gojek. Specifically, on the fact that AirAsia is strong in two markets that Gojek is not in but would like to eventually get into. Don’t be surprised if the Thai acquisition paves the way for a deeper collaboration, at the Asean level, between both parties.

Describing himself to be double thrilled at being able to accelerate market entry into Thailand and have Gojek become a shareholder in AirAsia Super App, Tony expects more collaborations with Gojek. “There are many many things we look forward to doing, going forward,” he says, adding, “We are starting discussions on what else we can collaborate on.”

Against the backdrop of an impending IPO in both Indonesia and the US by Gojek through its recent merger with Tokopedia via holding company GoTo, and the fact that GoTo does not have a market presence in Malaysia, a major market where AirAsia, in Tony’s words “is omnipresent”, brings up an intriguing possibility of GoTo taking a stake in AirAsia Group eventually.

Is that a stretch possibility? Amazon started as a pure digital player and has gone hybrid with a brick and mortar presence over the last few years to strengthen its value proposition.

Speaking of value proposition, it is AirAsia’s deeper market presence and stronger brand in Thailand that was key to the deal happening. Gojek CEO, Kevin Aluwi explained that while Gojek thought Thailand to be a fantastic market, “we also looked to where we could make sure our teams are given the right resources and commitments to have a path to market leadership. And, if we cannot deliver this then we wanted to ensure we could find the right partner with those ambitions [of market leadership] and commitments with resources.”

Enter AirAsia, with its founder who professes great admiration and respect for Gojek, “I think it is one of the greatest companies in Asia.”

Describing the deal as a logical and natural fit, Tony explains, “we have been in Thailand a lot longer and our brand is significantly larger than Gojek’s there. We also have a presence in every major, secondary and tertiary city in Thailand, coupled with a huge database.”

Putting these assets on top of the 500,000 monthly users, 40,000 riders and 40,000 merchants of Gojek Thailand, gives AirAsia Super App a strong foundation to push harder and faster into the market.

Interestingly Tony also mentioned that AirAsia is much stronger in Philippines and Malaysia as well, two markets Gojek is not in but where it would find AirAsia’s brand, market presence and database to be a very enticing proposition to accelerate its Asean ambitions. A future deal with AirAsia, around the time of Gojek’s IPO, could be an easy sell to investors.

Tony being Tony. Can he prove one plus one equals four?

But before that, Tony has to prove that AirAsia Super App can make an impact in Thailand where Gojek will exit the market, leaving its loss-making ride-hailing, food delivery and payments business and where it is said to have a much smaller market share in food delivery than other players.

Infact, a Jan article by the Bangkok Post citing research from a consultancy reveals that Grab Food owns 50% market share among online food delivery players, with at Foodpanda 23% and Lineman at 20%. The article did not mention Gojek.

But AirAsia will also augment the footprint built by Gojek by bringing in its logistics business, Teleport and it fintech play, BigPay to the Thai market as well.

All this has left Tony in an ebullient mood over the deal. He has also taken a dig at the other unicorns in Asean, where in a LinkedIN update showing him leaping for joy (pix above), he described Gojek as “the ONLY unicorn in South East that I truly respect.”

(It should be noted that Gojek has merged with Tokopedia, also a unicorn.)

The next move in this collaboration between the “No 1 mover of people in the skies and No 1 people movement, delivery and services on the ground,” as described by a LinkedIN comment to Tony’s post, will hinge on Tony being able to deliver strong growth in these new market segments in Thailand.

If he succeeds, then we may see a very interesting subsequent collaboration between the two, likely timed around the GoTo IPO. Can Tony turn this one plus one into a four, as how he claims the Gojek founders believe can happen? The ball is in his court.

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