//

Go-Jek is well established in Indonesia as an app to flag a motorcycle ride or get a courier for instant deliveries. In early October, the app came out with new features: bundled under the name Go-Life, you can now order a house cleaner, or beauty salon services such as a manicurist and a masseuse, right to your doorstep.

If you thought of Go-Jek as a transportation and logistics company, it’s time to re-assess the situation. The startup is branching out, slowly turning itself into an everything-on-demand empire.

It starts with two

Go-Jek founder Nadiem Makarim put two young women in charge of forging Go-Jek’s path into lifestyle services beyond transportation: Dayu Dara Permata and Windy Natriavi. The pair now directs a team of about 40 employees – 70, if you count the freelancers – at the Go-Life department within Go-Jek. It’s their first position after stints at consulting firm McKinsey.

Nadiem, who also spent time at McKinsey, plucked several talents from his former employer. (Raditya Wibowo, who leads Go-Box, is another former McKinseyan). First Nadiem wanted to put Windy and Dara to work at separate positions, but the two insisted on working together at Go-Life. “We knew each other from university, and we knew we work well together,” Dara explains.

That much is obvious. Dara and Windy call each other “hun,” and our conversation is sprinkled with laughter. But in this light-hearted atmosphere, a clear picture took form. Go-Life’s ambitions within Go-Jek are huge and involve upgrading Indonesia’s entire informal labor sector.

Standardizing quality

Dara and Windy have been working on Go-Life behind the scenes since about May. The first three services were rolled out in October without a huge marketing campaign. They wanted to test the demand first and make sure they could deliver consistently.

“In the on-demand model, it’s about standardizing the quality of the service,” Dara explains. No matter which masseuse or make-up artist comes to your house, customers need to be sure that the experience meets their expectations.

Go-Life achieves this by having all service providers go through an assessment and training center. They are coached by professionals and equipped with the tools and materials to perform their service well.

“In the beginning, new service providers will get a set of equipment for free. Later, once they have a steady number of bookings, they will buy the utensils they need from the Go-Life store. They will pay for it in installments,” Windy explains.

Go-Life chooses the cosmetics, cleaning products, and tools it wants its service providers to work with. This is also an opportunity for the company to enter partnership deals with brands.

Massages do best

Unlike Nadiem, who can be tight-lipped when it comes to sharing figures on Go-Jek’s performance, Dana and Windy are generous with facts about Go-Life’s early progress.

Go-Life so far has about 1,000 service providers on-boarded and ready to go, Windy says. She can’t give me a breakdown of the number of bookings for each service category, but concedes the massage service is highest in demand. Each of the 1,000 service providers has at least one booking a day.

“The interest is there, but we are taking it slow for now,” Windy adds.

On the app backend, Go-Life isn’t even fully integrated with Go-Jek yet. The fusion is planned for early next year, which is also when the Go-Life services will be introduced with a wider marketing campaign.

Go-Life services have little to do with the motorcycle transportation aspect of Go-Jek. “It’s not that each service provider rides to their customer on a Go-Jek,” Windy explains. “Right now, they can choose their own mode of transportation to get there.” The team is considering a closer link-up between the Go-Life services and motorcycle transportation once the technical integration is complete.

In the meantime, Windy and Dara are preparing to launch two more services in the Go-Life bundle: on-demand auto mechanics and event tickets. The first one is obvious, the second might need an explanation. In Indonesia, event tickets can be bought online, but a simple print-out usually isn’t enough to get into a venue. E-tickets need to be traded into physical ones before the event, which can only be done at official counters. The Go-Life ticket service would take care of that step and deliver the physical ticket to the customer’s home.

Windy explanins, the way Go-Jek thinks about adding new service lines to Go-Life is this: “We have a hypothesis, and then we do market sizing and surveys. If it checks out, we’ll trial it. In the beginning, all of our friends and our colleagues here at Go-Jek have to test the services themselves.”

New costs and risks

Each new line of service requires recruiting, and above all, a training strategy. If service providers get bad ratings, they go through follow-on training programs. The effort is worth it, Dara and Windy say.

“We calculate the cost of onboarding one service provider to be at US$200,” Windy explains. “With the current Go-Life services, we have an average ticket size of IDR 100,000 [US$7.27]. Go-Life takes 20 percent of each transaction, that is IDR 20,000 [US$1.45] for each booking. Assuming bookings every day, it doesn’t take so long to break even.”

“In five years, we want to get to 100,000 bookings a day, and we want to extend the Go-Life services to other cities,” Dara adds.

In case Go-Jek’s plan to set up training centers and equipment warehouses for thousands of car mechanics, hairdressers, and cleaners doesn’t sound ambitious enough for you, there’s more.

“We want to integrate our training program with a government certification process,” Dara says. “Right now, most of these services, like massages, cleaning, mechanics – they’re informal here in Indonesia.”

Introducing a certification system would give the informal sector a structure it’s never had before, turning unskilled jobs into a profession, or even a career, according to Dara.

“A make-up artist can take the basic certificate, but if they are ambitious, they could train for the next level,” she says. Senior make-up artists can choose to work with more high-end product packages, which they obtain from Go-Life’s stock.

It sounds like a perfect system – on paper, anyway. Go-Life’s figure of 1,000 on-boarded service providers with at least one booking a day serves as proof of concept – to some extent.

Go-Life still has to work out how to ensure a steady and high enough demand for its services to generate a significant income for providers who will have invested time and money by going through the training program and buying the stuff they need for the job.

Pessimists might say it’s a recipe for disaster and could end up with thousands of frustrated service providers competing for a handful of orders. Over at Go-Jek’s core business, some signs of motorbike driver discontent have bubbled up.

“At this point, we don’t encourage people to quit their existing jobs,“ Windy says, speaking about Go-Life’s marketplace for services. “The way it works for example in beauty salons today is that the workers there have some days off. Traditionally, they would use that to work for private clients. Go-Life makes that easier.”

“Some beauty salon workers aren’t employed in the first place,” Dara adds. “They are freelancers. So if Go-Life gives them jobs, that’s an opportunity.”

Is Indonesia ready?

Go-Life’s plans seem out of touch with the way Indonesian cities work today. Yes, beauty salons and massage parlours are in high demand, and car owners need a mechanic every once a while, but habits and expectations have not yet formed around requesting these services to private homes. As for cleaners, wealthier families often have a live-in maid.

Windy and Dara believe this will change with Indonesia’s millennials, who will be more conscious of saving time and fuel costs on the road. Another trend they think works in Go-Life’s favor is the rising cost of land and property. As more people move into apartments, they argue, on-demand services will become part of daily routine.

“We are already observing that Go-Clean, the on-demand cleaning service, has a lot of demand from satellite towns like Tanggerang,” Windy says. “We are not entirely sure why, but it could be that many young families live there, who may not be as comfortable with having a live-in maid.” Dara added another explanation – such towns are more middle-class and they’re far away from the low-income areas where maids usually live, so there’s more demand than supply.

These observations confirm their hypothesis they will need to cleverly match the range of services and number of service providers according to the demands of each city – or even on the district level.

“For example, we imagine the massage service to go really well in Bali,” Windy says. “But perhaps other services not so much. So we have to adjust our supply.”

Go-Jek’s move into a broad range of services could worry other startups who are doing their part to innovate how customers and service providers interact. In Indonesia, there are, for example, Thumbtack-like sites Seekmi and Carijasa for all kinds of services. These two startups also have a marketplace of service providers in categories overlapping with Go-Life’s. Their system – which allows comparing the profiles and prices of a number of providers – might be more in tune with existing habits.

But Go-Jek’s vision for local services reaches much further than rival startups with its emphasis on standardization and training of individuals, up to national certifications.

On the transport side, Go-Jek is going to continue competing with Uber and GrabTaxi. The company’s ambitions seem limitless.

This post Here’s Go-Jek’s massive plan to level up Indonesia’s services sector appeared first on Tech in Asia.

from Tech in Asia » Startups http://ift.tt/1jqXJLM