GO-JEK and Platform-based Economy: How Customer Shifting

Their Behavior?

Daniel Hermawan

Business Administration Department, Parahyangan Catholic University, Ciumbuleuit 94 Street, Bandung, Indonesia

Keywords: GO-JEK, Platform-based Economy, Customer Behavior, Innovation, Disruption.

Abstract: Technological advancements provide convenience, as well as challenges in the business world. The

presence of GO-JEK as a platform-based economy changes the business competition map in Indonesia. Not

only stopping as a platform to connect providers and service users in the field of transportation, but also

GO-JEK becoming a platform-based economy that can connect users with restaurants, logistics, shopping,

beauty services, and many more. Through this paper, the authors are interested to see (1) how does GO-JEK

change the lifestyle of people from conventional to digital? (2) Does GO-JEK make people dependent on

the services they offer? (3) What GO-JEK services are considered to change the way people meet their daily

needs? This study will be conducted with quantitative methods, namely using surveys and supplemented by

literature studies. The research found that GO-JEK changes the lifestyle of people to digital savvy, make

people dependent to GO-JEK's services, and change the behavior of the customer in order to fulfill their

daily needs. This research is conducted in Bandung and gathering Generation Y and Z as research

respondents. From the study, the author gives an empirical study about how customer shifting their behavior

to be a GO-JEK’s loyal customer, either by reliability, responsiveness, and promotion.

1 INTRODUCTION

The development of digital technology in the

business world helped change the business model

that exists in the world today. The birth of GO-JEK,

Grab, Alibaba, Facebook, Instagram, YouTube, and

various digital platforms is a manifestation of the

beginning of the digital economy era (Kasali, 2017).

Businesses that were originally defined in the

concept of ownership, have now turned into an

economy of sharing. If before, businesses must have

assets, in the form of buildings, vehicles, employees,

and various other attributes, now businesses are

transforming into businesses without physical assets,

but digital assets and extensive networks (Sampere,

2016).

People who originally had to have certain assets

to enjoy existing facilities can now share assets to

enjoy access to a service (Kasali, 2018). People who

do not have motorized vehicles can order vehicles

through features in online applications, such as GO-

JEK and Grab. Also, thus who want to save money

and get lodging that can be conveniently booked on

various online platforms, such as Airbnb,

Booking.com,

Traveloka, and so on.

This platform-based economy is slowly changing

the habits of Indonesian people in consuming a

product or service (Kumar & Kumari, 2014). If

previously the community had to bring a private

vehicle or order a conventional taxi to go to a place,

now people only need an application to order

vehicles based on their location. In addition to being

fast, easy and practical, the meeting between

consumers and service providers, which is without

intermediaries, provides a mutualism symbiosis that

supports each other (Furr, 2016).

In this case, GO-JEK does not only stop at

transportation service providers, but also food,

beauty, credit, bills, and banking services. All can be

done in just one application, so don't be surprised if

the GO-JEK slogan reads "An Ojek for Every Need"

remembering various things that can be done in just

one application. People who are spoiled by the

convenience offered are slowly changing from

conventional lifestyles to digital lifestyles.

Through this paper, the authors are interested in

observing platform-based economic phenomena

carried out by GO-JEK, namely (1) how does GO-

JEK change the lifestyle of people from

Hermawan, D.

GO-JEK and Platform-based Economy: How Customer Shifting Their Behavior?.

DOI: 10.5220/0008428201210128

In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World (ICIB 2019), pages 121-128

ISBN: 978-989-758-408-4

121

conventional to digital? (2) Does GO-JEK make

people dependent on the services they offer? (3)

What GO-JEK services are considered to change the

way people meet their daily needs?

2 LITERATURE REVIEW

2.1 Platform-based Economy

Changes in the business model from the era of

industrial revolution to the digital economy era,

helped bring a number of changes in conventional

business schemes (Labrecque, dem Esche,

Mathwick, Novak, & Hofacker, 2013). Following

are a number of changes seen from the conventional

economy towards the digital economy.

Table 1: Comparison between Industrial Era vs Digital

Economy Era (Accenture, 2016).

From Products to Platforms

Comparison Industrial Era

Digital

Economy Era

Characteristic

Changed every

aspect of life

Transforming

every dimension

of life

Output Products Platforms

Market

Value Chains

(linear)

Ecosystems

(non-linear)

Power

Power of

controlling

supply chai

Power of

optimizing

ecosystems

Economic Scale

Supply-side

economies of

scale

Demand-side

economies of

scale

Assets

Physical assets

and capital

depreciation

Digital assets

and innovation

capital

Returns

Diminishing

returns

Distribution

power law and

network effects

Market

Valuations

Market

valuations driven

by ROA

Market

valuations

driven by

ecosystems

Growth

Growth organic

or via M&A

Growth driven

by asymmetric

& network

effects

Measurement

GDP as

economic

measuremen

New measures,

digital density,

and “free goods”

The platform-based economy also has provisions

that are different from the conventional economy in

general, namely (1) network effects/two-sided

market, where meetings between two groups of

users, both producers, and consumers, provide added

value from the demand and supply side. The more

parties connected with business services, the greater

the added value provided by platform-based

economies (Taeihagh, 2017), (2) distribution power

law, if so far business has been synonymous with a

gradual supply chain, now the value chain offered by

platform-based business is direct interaction with

market players with the help of applications or

technology. The links that were originally long and

resulted in price increases, are now trimmed to be

more concise and easier for both consumers and

producers (Schor, 2014), (3) asymmetric growth and

competition, where platform-based business can

create relationships and competition between

industries that differ from the main services offered

armed with demand created by the market from the

main products offered (Kenney & Zysman, 2016).

2.2 Sharing Economy

The sharing economy, also known as collaborative

consumption or peer-to-peer-based sharing, is a

concept that highlights the ability and perhaps the

preference of individuals to rent or borrow goods

rather than buy and own them (Rouse, 2013).

The main features of a sharing economy

business model are (Kenton, 2014):

 Access instead of ownership: rather than buying

an asset, the seeker rents it from someone else

(Botsman & Rogers, 2010);

 A platform brings together owners and seekers

and facilitates all processes between them

(Sundararajan, 2016);

 The business/platform itself does not possess any

of the assets on offer: GO-JEK does not own a

single motorcycle or car (Frenken & Schor,

2017)

Figure 1: Sharing Economy (Business Model Toolbox,

2019).

ICIB 2019 - The 2nd International Conference on Inclusive Business in the Changing World

122

Success factors of sharing economy are (Hamari,

Sjöklint, & Ukkonen, 2015):

(1) Develop a culture of trust. Since sharing

economy is based on trust among and between

the participants, it is crucial to install

mechanisms in the platform, like commenting

and rating, but also offer support in case of

abuse.

(2) Smooth transaction process. For example, one

can order motorcycle or car through GO-JEK on

tablets or mobiles now, reducing the transaction

(time) cost.

(3) Constant engagement of users. To maintain a

certain scale of demand and supply, it is

necessary to offer promotions: e.g., GO-JEK

offers promotional codes to users in order to

build customer loyalty.

2.3 GO-JEK

GO-JEK is an Indonesian technology company

engaged in motorcycle taxi services. GO-JEK

became an application company popular in

Indonesia when they launched a mobile application

in 2015. Through massive advertisements and

promotions to attract consumers and GO-JEK

partners joined, GO-JEK needed 1.5 years to get the

US funding $ 550 million and become a Unicorn

with a valuation of US $ 1.3 billion. Until now, the

number of GO-JEK partners is approximately 1

million people spread throughout Indonesia

(Pratama, 2016).

GO-JEK is a new start-up with disruptive

innovations for the ecosystem of various lines of

business in Indonesia. Initially, GO-JEK entered

Indonesia with a digital platform in the form of an

application to bring together users and providers of

motorcycle transportation services. Now GO-JEK

has expanded its business lines, starting from GO-

RIDE, GO-FOOD, GO-PILLS, GO-TIX, GO-CAR,

GO-SEND, GO-DEALS, GO-SHOP, GO- MART,

GO-BOX, GO-MASSAGE, GO-DAILY, GO-

CLEAN, GO-FIX, GO-LAUNDRY, GO-GLAM,

GO-AUTO, GO-MED, and GO-PAY. The

expansion of this business line has brought together

various business industries and business actors in a

similar medium, namely GO-JEK. Even now GO-

JEK is expanding its market to Vietnam under the

name GO-Viet (Paskalis, 2018).

Seeing the various business lines that GO-

JEK has entered, it seems that there are so many

old industrial players who have to adapt to

running their business. Connections between

restaurants, beauty service providers,

pharmacies, tickets to shows, expeditions,

logistics, etc. change the competition map of

business leaders who have abundant assets into

populist services, where anyone can become a

courier or business service provider from, to,

and by the community (peer-to-peer sharing)

(Amartha, 2016).

2.4 Consumer Behavior

Consumer behavior is defined as a process or

activity when someone searches, selects, purchases,

uses, and evaluates a product, whether it is goods or

services to meet their needs or desires

(Maxmanroe.com, 2019). Consumer behavior itself

is influenced by 5 main factors, namely (1)

purchasing power, (2) group influence, (3) personal

preferences, (4) economic conditions, and (5)

marketing campaigns (iResearch Services, 2018).

The presence of GO-JEK has helped change

modern consumer behavior from the search process

to product evaluation due to the ease and practicality

gained (Donghyun & Ammeter, 2018). The changes

in consumer behavior occur because (1) people can

easily obtain information in real time with

information on their smartphones. The public can

compare prices, and the quality obtained from

various service providers in Indonesia; (2) reviews

provided by consumers directly through various

platforms contribute to building reputation and the

way consumers value the quality of services offered

by the company; (3) algorithms from technology

companies indirectly store history from user profiles,

so users feel faster, more convenient, and accurate in

order without manual processes that must be done

repeatedly every time they place an order (Jongen,

2018).

The community that originally had to do

everything independently, from driving a private

vehicle, queuing to buy cinema tickets, going to a

credit kiosk to top up, going to restaurants to order

food, etc. are now facilitated by a platform that

provides all the needs that modern society is needed.

Indirectly, the facilities provided change consumer

behavior slowly from conventional to digital (Pratt,

2016).

Through the massive promotion carried out by

GO-JEK, consumers are being educated to be more

trained in using the application. Through GO-PAY

PAYDAY promotion, GO-JEK is accustoming the

public to use the digital economy in the form of an

electronic wallet to make transactions in various

favorite outlets. The presence of various lines of

GO-JEK and Platform-based Economy: How Customer Shifting Their Behavior?

123

GO-JEK business expansion indirectly changes the

lifestyle of modern people who generally have

limited time, are busy working, and enjoy all forms

of practicality that can be obtained (Mack, 2019).

3 ANALYSIS

Through this paper, the author examines changes in

consumer behavior through a distributed

questionnaire. There are 102 respondents who

represent Generation Y and Z as the generation that

actively uses smartphones to process transactions in

Bandung.

Generation Y is the generation born between

1981 - 1994 or often called millennial is the first

generation that easily gets access to information and

is also connected to each other across countries

around the world (Kumparan, 2018).

Meanwhile, Generation Z is a generation born

from 1995 to 2004. The character of Generation Z is

versatile; more individualized, more global, more

open-minded, faster to enter the world of work,

more entrepreneurs, and of course more technology-

friendly (Adam, 2017).

Based on the table below, the author explains the

demographics of the respondents.

Table 2: Respondent Demographic.

Res

ondent Demo

hic

Sex

Male (46,1%)

Female (53,9%)

Age

Generation Y (94,1%)

Generation Z

(

5,9%

)

Smartphones OS

Android (65,7%)

le iOS

(

34,3%

)

Location of

Residence

North Bandung (30,4%)

South Bandung (10,8%)

West Bandung (22,5%)

East Bandung (8,8%)

Central Bandun

(

27,5%

)

Type of

Residence

Own house (3,9%)

Parents house (51%)

Contract/Rent (2%)

Boarding house (42,1%)

Siblings house (1%)

Income per

month

Less than 1 million Rupiah

(36,3%)

1 million until 2,5 million Rupiah

(50%)

2,5 million until 5 million Rupiah

(10,8%)

More than 5 million Rupiah

(

2,9%

)

Using GO-JEK

since

Less than 3 month (9,8%)

–

6 month

(

7,8%

)

6 – 12 month (8,8%)

1 – 2 years (35,3%)

More than 2 years (38,3%)

Spending on GO-

JEK service

Less than 100.000 Rupiah

(46,1%)

100.000 – 300.000 Rupiah

(46,1%)

300.000 – 500.000 Rupiah

(5,9%)

More than 500.000 Rupiah

(

1,9%

)

Favorite Features

GO-FOOD (89,2%)

GO-RIDE (88,2%)

GO-CAR (84,3%)

GO-PAY (56,9%)

GO-SEND (52%)

Based on the results of the questionnaire, the

majority of GO-JEK users are women (53.9%) who

are generally in the Generation Y age range (94.1%),

use Android (65.7%), and live in the North Bandung

area (30.4%).

In addition, the majority of respondents also live

in parents' homes (51%) and boarding houses

(42.1%) with monthly income between 1 million to

2.5 million Rupiah (50%). The majority of

respondents have used GO-JEK for more than 2

years (38.3%) and spent less than 300,000 Rupiah

(92.2%).

The favorite features that are widely used by

respondents are (1) GO-FOOD (89.2%), (2) GO-

RIDE (88.2%), (3) GO-CAR (84.3%), (4) GO-PAY

(56.9%), and (5) GO-SEND (52%).

Considering that the majority of GO-JEK users

are women, then GO-JEK's marketing content must

be adjusted to the characteristics of female

consumers who prioritize quality, price, brand,

recommendations from friends, and

recommendations from the family (Academy, 2018).

GO-JEK can endorse influential female

influencers, such as Ria Ricis (YouTuber) or

celebrity in promoting GO-JEK marketing content

personally. In addition, the GO-JEK application

should also be packaged in power and memory

saving features so that it is more friendly to be used

by consumers, especially in the Android operating

system.

In addition, GO-JEK can also maximize the GO-

JEK driver deployment points in respondents'

locations, such as North Bandung (30.4%), Central

Bandung (27.5%), and West Bandung (22.5%). This

step can be done through special recruitment of

residential areas to ensure GO-JEK orders in the

respondent's area can be accommodated properly.

The majority of respondents have also used GO-

JEK for more than 2 years (38.3%) and 1-2 years

ICIB 2019 - The 2nd International Conference on Inclusive Business in the Changing World

124

(35.3%), so in terms of loyalty, we can be sure GO-

JEK users are customers who are loyal to the GO-

JEK brand, so that GO-JEK must pay attention to

the quality and reliability of services in order to

maintain the positive values of the GO-JEK brand in

order to increase GO-JEK usage in the nominal

amount of money that is still relatively low, that’s

less than 300,000 Rupiah (92.2%).

Favorite features that are widely used by GO-

JEK consumers can also be a first step to selling

between features by offering vouchers for less

popular features, such as GO-AUTO voucher gifts

or GO-CLEAN vouchers for the use of GO-RIDE 5

times a week, so that various other features in GO-

JEK can be introduced and accepted by the

community.

Based on the results of the questionnaire, the

author answers the research questions as the

following tables.

(1) How does GO-JEK change the lifestyle of

people from conventional to digital?

Table 3: GO-JEK and Lifestyle.

Reasons for using GO-

JEK services

Consumer transport

behavior

Practical 53,9%

Prefer to

bring a

private

vehicle

3,9%

Affordable 3,9%

Prefer to

order GO-

40,2%

Fast 10,8%

changes

55,9%

Bustle 2%

Lots of

promo

17,6% GO-PAY user

Lazy to

take a

vehicle or

lazy out of

the house

11,8% Yes 75,5%

No 24,5%

The majority of respondents answered if the

element of practicality (53.9%) was the main reason

why respondents used GO-JEK services. In addition,

the factor of the number of promos, being lazy to

bring your own vehicle or being lazy to leave the

house, and speed is other factors that also influence

the use of GO-JEK services.

Since GO-JEK services were offered, as many as

40.2% of respondents chose to use GO-JEK as the

main mode of transportation. Respondents were also

the majority of GO-PAY users, which amounted to

75.5%.

GO-JEK changes people's lifestyles from

conventional to digital with the practicalities offered.

Moreover, the slogan "An Ojek for Every Need" is

felt to be very relevant to the various features

offered by GO-JEK.

Respondents also began to get used to using

digital wallets, such as GO-PAY because of the

practicality of payment, and no need to prepare cash

in a certain nominal amount to pay for GO-JEK

services.

(2) Does GO-JEK make people dependent on the

services they offer?

Table 4: GO-JEK and Dependability.

GO-JEK Using

Behavior

No Promotion on GO-JEK

Prefer to do

something

with GO-

45,1%

Still using GO-

JEK as usual

14,7%

Prefer to do

something

without GO-

Still using GO-

JEK, but under

several

circumstances

60,8%

No changes 54,9%

Rare to use

GO-JEK

21,6%

Not use GO-

JEK anymore

2,9%

Based on the results of the questionnaire,

respondents also preferred to do everything with

GO-JEK, which amounted to 45.1%. However,

when the GO-JEK promotion was stopped,

respondents considered that the use of GO-JEK

services was only carried out under certain

conditions (60.8%).

In general, respondents felt that GO-JEK had

created dependency in their lives, especially in

carrying out daily activities. But on the other hand,

the majority of respondents also still prioritize

promotion from GO-JEK, so promotion is still a

crucial element in respondents' purchasing decisions

for GO-JEK services.

(3) What GO-JEK services are considered to

change the way people meet their daily needs?

GO-JEK and Platform-based Economy: How Customer Shifting Their Behavior?

125

Table 5: GO-JEK and Changing Behavior.

GO-JEK Change

Lifestyle

Payment Behavior

Yes 69,6%

Prefer to use

GO-PAY

45,2%

No 30,4%

Prefer to use

cash

22,5%

Prefer to use

debit or credit

card

7,8%

GO-JEK

Service

Qualit

4 No changes 24,5%

The majority of respondents answered that GO-

JEK had changed their lifestyle, which amounted to

69.6%. In terms of payment, respondents chose to

use GO-PAY (45.2%) compared to other payment

methods. In addition, GO-JEK service quality gets a

value of 4 on a scale of 5, which is satisfactory.

Respondents considered GO-JEK able to

accommodate their needs in carrying out daily

activities, while fulfilling an urban lifestyle that was

busy with various features offered.

The effectiveness of GO-PAY as a digital

payment method should also be maintained by GO-

JEK with various expansions being carried out, both

in the form of cooperation with favorite merchants

and the main payment method in delivery services,

both in terms of ease and practicality of use. Of

course, the element of security in the use of GO-

PAY must continue to be managed in order to

minimize and prevent the break-ins of GO-PAY

accounts by irresponsible parties.

In terms of quality, the performance of GO-JEK

that has been valued satisfactorily should be

maintained and improved with more accurate GPS

accuracy, availability of drivers in more locations or

crowded places, and integrity of GO-JEK partners

who prioritize honesty values in running GO-JEK

services, either through training or regular

information from GO-JEK notifications.

4 RESULT AND DISCUSSION

As a platform-based economy, GO-JEK has changed

consumer behavior through an economic sharing

approach. Through the ease, speed, and promotion

of GO-JEK, it indirectly changes the lifestyle of

respondents who represent Generation Z in the city

of Bandung.

Figure 2: Research Model.

As seen in the diagram, sharing economy

consisting of owners, platforms, and seekers form a

separate business ecosystem between sectors

provided by GO-JEK platform, such as

transportation, logistics, beauty, courier, bills, food,

and so on.

The existence of sharing economy is supported

by reliability, responsiveness, and promotion carried

out by GO-JEK, so that consumers slowly but surely

experience changes in behavior in the process of

conventional transaction selection towards digital.

Therefore, the existence of sharing economy

must also be supported by effective, responsiveness,

and promotion to shift consumer behavior from

conventional to digital, from manual to modern, and

from limited reach to unlimited reach.

5 CONCLUSIONS AND FUTURE

RESEARCH

GO-JEK as platform-based economy has changed

the various business ecosystem of business in

Indonesia. From transportation, food, logistic,

beauty, bills, couriers, and many more, people

slowly shift their behavior from conventional to

digital. This phenomenon occurs since people more

reliable to gadgets, and they want reliability and

responsiveness of service that they get in front of

their room or house.

This research is limited to Generation Y and Z

respondents, which lived in Bandung. The study

contributes to give an empirical study about how

customer shifting their behavior to be a GO-JEK’s

loyal customer, either by reliability, responsiveness,

and promotion in platform-based economy form,

which customer can use the service by sharing

economy mechanism between provider and user.

The possible future research is to find out how

GO-JEK is maintaining their competitive advantage

to their competitor, such as Grab in Indonesia. Also,

we can find out customer loyalty about GO-JEK

using black-box models; does they still using GO-

JEK, while the others give bigger and better

Platform

Seeker

Owner

Reliability

Responsiveness

Promotion



Customer

Shifting

Behavior

ICIB 2019 - The 2nd International Conference on Inclusive Business in the Changing World

126

promotion. Since this research take scope in

Bandung, future research could be conducted on a

larger scale, such as West Java or Indonesia scope.

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