In the past decade, the sharing economy has grown rapidly all around the world. Whether in China, the country I am from, or other fast-growing populous countries in Asia, the Internet-sharing model is redefining all aspects of people's lives, especially in the transportation sector. Whether it is cars, motorcycles or bicycles, people are trying to re-integrate and distribute transportation resources in an innovative way, so that each individual can travel more comfortably and efficiently. These Internet-sharing models of transportation have different development processes in different countries, the up-and-down of which reflects the urban differences, and also confirm the periodicity of the Internet and the unique attributes of the Internet economy.
In the streets of Indonesia, I observed and studied the popularity of Go-Jek and Grab. The infrastructure of Jakarta, the capital of Indonesia, is not developed and congestion is the norm in the city. On the streets of the city centre, I saw countless motorcycle riders passing by, and they and their vehicles played the role of transporting passengers to different destinations, as well as helping merchants to deliver takeaway food or other diverse items. As the public transportation system is not perfect and the road facilities still exist areas for continued development, driving a car in Jakarta is something very inconvenient and extremely time and patience-consuming. On account of this current status of the city, sharing motorcycles has become a common phenomenon on the streets of Indonesia. It is neither subject to congested road conditions, nor as polluted as traditional energy vehicles, and it can meet transportation needs in a timely manner, which naturally becomes a fixed choice for residents to travel in Jakarta. Sharing motorcycles is extremely common not only in Jakarta, but also in cities in Indonesia and other Southeast Asian countries.
Uber, quite popular in the US, is an Internet-sharing model that allows cars to perform more functions. Mobike and ofo are all the rage in China, which is a sharing model based on bicycles. In fact, neither cars nor bicycles can adapt to the traffic congestion and less secure and steady road conditions in Southeast Asia. However, motorcycles are a very smart choice. Go-Jek has won 80% of Indonesia's travel service market share, and its number of motorcycle riders has grown from the first 20 people to the current 1.4 million, far exceeding the number of Meituan riders in China, which is over 500,000. This amazing data reflects not only the rapid development of Go-Jek, but also the enormous development potential of Indonesia as a country with a large population base.
In Jakarta, I not only observed and recorded the frequency and market size of sharing motorcycles, but also tried to compare the different characteristics of Internet companies in China and Indonesia. Based on my field observations in Indonesia and China, as well as a large amount of literature reading and analysis, there are some experiences in China's Internet-sharing industry for Indonesia to go by.
First of all, ofo is a very representative case. From rapid development to nearly going bankrupting, this star company’s development process like a roller coaster in a few years has actually given a very vivid lesson to other Internet companies. The state of ofo at the peak stage is very similar to the state of today's Go-Jek. Falling from the peak to the bottom may just take one or two mistakes in key strategic decisions. The biggest experience from the case of ofo is to clearly and accurately recognize the nature of the Internet industry. The accumulation of users can make a company, while the dissatisfaction and departure of users can completely destroy a company as well. The old ofo is like a mirror, inspiring more Internet-sharing enterprises to recognize the market and stay awake and cautious.
Second, capital operation is an indispensable driver in the development of Internet-sharing enterprises. Internet companies in the growth stage need to attract users, especially to adopt various free promotion methods, and such costly competition must involve the participation of capital players. In China, in fact, we can see that almost all the head enterprises in the field of Internet sharing have been greatly helped by capital in the rapid development period. For Internet-sharing companies in Indonesia, it’s in the same way. Whether it is domestic capital or international capital, there is a development opportunity that can be won. Only when profession is fully integrated with capital, can the company achieve faster development. This principle is especially effective in the Internet industry.
Third, in the fiercely competitive field of Internet travel, the integration of resources is often inevitable. In China's shared travel industry, Didi merged with Uber and became a near-monopoly participant in this field. In Indonesia, and even in other countries in Southeast Asia, Go-Jek and Grab are always competing with each other. However, continuous investment and competition is not always a good thing. One day in the future, perhaps the leading participants will choose more rational resource integration, including the way of merger, which may be constructively helpful for the long-term development of the company and a more friendly and reasonable market environment.
In the business side, five months ago, Go-Jek received a new round of investment of 1.2 billion US dollars, and its valuation has also created a new high, further reflecting people's concern and enthusiasm for the Internet travel industry in Southeast Asia. In the past two years, China's Internet entrepreneurial environment and venture capital structure have become more rational, and these experiences and lessons from China will continue to help Indonesia's shared travel companies.
In the social side, the in-demand of transport or economic sharing as a whole have shone another angle to the word “convenience”. The arising tech start-ups and innovation not only improve lives but also helped eased some of the big issues like traffic congestion and loss of productivity, two of the major concerns in developing countries like Indonesia.
About The Author
Xincheng (Alex) Zhu is a grade 11 student at Qibao Dwight High School. He is passionate about economic transformations around the world, particularly in rising economies in Asia. He visited Jakarta, Indonesia in the summer of 2017 for a field research project on sharing economy with a focus on the transportation sector.
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