Air Asia to acquire Gojek’s business in Thailand

On Wednesday, Gojek and AirAsia declared an all share deal which will see the Indonesia tech group take a 4.76 per cent stake in Air Asia ‘superapp’ business, in newly issued shares, in exchange for its Thai business.

According to ‘NIKKEI Asia’ report, Air Asia is looking forward to take over Indonesian unicorn Gojek’s business in Thailand as the low cost Malaysia airline steps up its digital ambitions.

On Wednesday, Gojek and AirAsia declared an all share deal which will see the Indonesia tech group take a 4.76 per cent stake in Air Asia ‘superapp’ business, in newly issued shares, in exchange for its Thai business.

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In a stock filing, AirAsia asserted that AirAsia’s superapp business have been estimated nearly around $1 billion while on the other hand Gojek’s Thai business have been valued at a total of $50 million.

The group CEO of AirAsia, Tony Fernandes expressed, “By taking on Gojek’s well established Thai business, we’ll be able to turbocharge our ambition in this space to become a leading ASEAN challenger superapp.”

Gojek’s app is likely to run till the end of July in Thailand. On the other hand, Air Asia aims to introduce its superapp by the month of August. In an online news conference, on Wednesday, Tony Fernandes clarified that there will be no redundancies arising from the transition.

The deal exhibits Gojek’s aim in reshaping its regional business in the wake of its announcement in May, which suggested that the company would merge with Tokopedia, one of the Indonesia’s largest e-commerce platforms to form GoTo. The company affirmed that the deal would allow Gojek to increase investments in Vietnam and Singapore.

Kevin Aluwi, CEO of Gojek said, “When we look at where we could really deploy our product and engineering resources and not just capital, we decided that our priority was to invest in Vietnam and Singapore.” He clarified that the investment is being considered  on the scale of business the company have in those markets. Furthermore, he asserted that the company can find ‘a path to market leadership’ in the two countries.

Fernandes and Aluwi touched upon the possibility of doing business together outside Thailand but did not disclose any details, as cited by the publication. Earlier, Fernandes disclosed his intention to compete with Gojek and Grab, its Singapore based rival that headed for a U.S stock market listing this year.

Air Asia Digital along with the company’s non-airline business provides services in food and fresh food delivery, courier services, an e-commerce platform and a payment gateway. However, the company lacked ride-hailing when compared with the other big players.

GoTo reportedly lags its rivals in international expansions. Gojek’s runs its operation in three countries namely Vietnam, Thailand and Singapore, outside its home market. Tokopedia provide its services only in Indonesia. Grab runs in eight Southeast Asian countries. Another supperapp, Sea operates in six countries of the region along with further operation in Taiwan and four South American countries.

The Thai superapp market is expected to be competitive considering the participation of local conglomerate. As per report cited by the publication, Retail giant Central Group invested $200 million in grab’s Thai subsidiary in 2019. Thailand’s largest conglomerate, Charoen Pokphand Group, is putting effort to nurture its telecom subsidiary’s TrueID content app into a more powerful superapp.

In 2020, Thailand’s internet economy was estimated at 18 billion according to report by Google, Temasek and Bain & company, the second biggest in the region behind Indonesia. It is expected to increase to $53 billion by 2025.