Facebook’s partnership with Indonesian technology start-up Gojek has been hit by delays, stalling the US technology company’s expansion into one of the world’s biggest social media markets.
Facebook acquired a 2.4 per cent stake in GoPay, Gojek’s payments arm and digital wallet, last June. The deal, which people with knowledge of the matter said was valued at “close to” $300m, was intended to help Facebook tap into the booming ecommerce market in south-east Asia’s largest economy.
The social media group was forced to find a payments partner because government rules prevented it from offering direct payments services to consumers.
Gojek, last valued at $10bn, is an all-purpose app similar to Tencent’s WeChat, offering ride-hailing, food delivery, payments and other financial services. Facebook’s investment was touted as a shot in the arm to combat an increasingly competitive e-wallet market.
But nine months later, there is little evidence of any deep integration between the two platforms, according to multiple people at both companies.
Facebook signalled to Gojek late last year that it had shifted its focus away from Indonesia to address challenges in other markets, according to one person familiar with the negotiations. “The partnership remains important for both companies. There was a delay but the relationship has not turned acrimonious,” the person said.
Another person familiar with the matter said that uncertainty for Facebook caused by Gojek’s planned merger with Tokopedia, one of Indonesia’s biggest ecommerce groups and a potential competitor, was another factor.
Facebook said its commitment to bringing payments to Indonesia was “unchanged”, adding: “We remain proud of our investment in Gojek and will continue to evaluate best options to bring payments to Indonesia.”
Gojek declined to comment.
The situation reinforces the difficulty Facebook faces in launching its payments infrastructure in emerging markets, especially as regulators look to assert local control over international businesses.
The Silicon Valley group has been beset by challenges in India and Brazil, two of its key markets for launching WhatsApp Pay.
WhatsApp was finally given approval to launch its payments service in India, its largest market with more than 400m users, in November but authorities limited its reach to a maximum of 20m customers.
In Brazil, Facebook’s WhatsApp payments service was suspended a week after its launch in June. It has yet to win back approval from the central bank.
Big foreign technology companies face challenges in finding “suitable” local partners in markets such as Indonesia, said Roshan Raj, a partner for consultancy Redseer, noting that working out long-term alignment between their goals and their investors “is tricky”.
There have been some initiatives announced within the partnership between Facebook and Gojek. Merchants on GoStore, a Gojek platform helping businesses sell online, are able to integrate their online stalls with Facebook Shops and Instagram Shopping.
But Gojek’s mooted deal with Tokopedia has called the future of these initiatives into question. According to one person with direct knowledge of the situation, an agreement could affect Facebook’s own ecommerce plan to target small and medium-sized businesses and consumers. “We are waiting to see the result of the negotiations,” the person said.
Additional reporting by Stephanie Findlay in Delhi
