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Indonesia’s GoTo reports big drop in quarterly losses, to invest in market growth

Employees pack goods at Goto's e-commerce unit Tokopedia's warehouse in Jakarta, Indonesia, August 31, 2022. REUTERS/Ajeng Dinar Ulfiana
Employees pack goods at Goto's e-commerce unit Tokopedia's warehouse in Jakarta, Indonesia, August 31, 2022. REUTERS/Ajeng Dinar Ulfiana

As it announced lower underlying losses in the third quarter, Indonesia’s most prominent tech business, PT GoTo Gojek Tokopedia (GOTO.JK), would “prudently” make investments to retain its market position, the CEO of the company said on Monday.

According to a company statement, GoTo, which provides financial services, e-commerce, and ride-hailing services, reported underlying losses for the July to September period of 942 billion rupiahs ($59.30 million), a significant decrease from the 3.7 trillion rupiahs of the previous year. This was achieved through cost-cutting measures, including a reduction in marketing spend.

However, CEO Patrick Walujo stated during a call with investors that the actions have impacted their market share, particularly with price-conscious consumers.

The CEO stated, “We have and will continue to act prudently on this; the increasingly competitive operating environment… means we must invest to maintain our market leadership.” The company has also lowered its platform costs.

GoTo noted that to satisfy its price-conscious clientele, it has launched several goods, including less expensive versions of its meal delivery and ride-hailing services.

GoTo increased its expenditure on product promotion and incentives in the third quarter by 2% over the previous quarter as part of its market expansion plan.

GoTo, supported by Singapore’s sovereign wealth fund GIC and Japan’s SoftBank Group (9984.T), reported that its net losses decreased to 2.4 trillion rupiah from 6.7 trillion rupiah in losses the previous year.

By year’s end, the group still hopes to turn a profit, it stated.

GoTo said that it has enough cash on hand to fund its operations and that it would not be pursuing an IPO in foreign markets at this time.

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