Indonesia's GoTo Remains Optimistic Despite Q1 Loss, Eyes Profitability Boost with TikTok Partnership

Indonesia's GoTo reports first-quarter loss but remains optimistic about profitability. Partnership with TikTok shows promising early results. Lower costs and increased income from Tokopedia expected to drive profitability

Credit: REUTERS

Indonesia's GoTo, the country's largest tech company, remains optimistic about its profitability despite reporting a first-quarter loss. The company, which is a result of the merger between Gojek and Tokopedia, posted an underlying loss of 102 billion rupiah ($6.28 million) for the first quarter. However, GoTo believes it is on track for profitability, thanks to its partnership with TikTok.

The company attributed the first-quarter loss to planned investments and seasonal slowness in the on-demand services segment during January and February. Despite this setback, Group CEO Patrick Walujo expressed confidence in the company's growth prospects for the rest of the year. He stated, "We expect even faster growth for the rest of the year, while also remaining committed to our profitability goals."

GoTo's partnership with TikTok, which acquired a majority stake in its e-commerce unit Tokopedia, has shown promising early results. The company stated that compliance requirements have been fulfilled, and the performance has been robust. GoTo expects lower costs in running Tokopedia and anticipates increased income as Tokopedia is projected to grow faster than the overall expansion in Indonesia.

Furthermore, GoTo aims to secure growth in broad user demographics in its core on-demand services and fintech segments across the Indonesian market. Group CFO Jacky Lo emphasised the company's prudent investment approach and cost discipline to ensure sustainable long-term growth. He also confirmed that GoTo is on track to meet its target of maintaining adjusted EBITDA profitability for the full year of 2024.

In addition to the first-quarter loss, GoTo reported net revenues of 4.079 trillion rupiah for the same period. This follows the company's full-year net revenues of 14.79 trillion rupiah in 2023. As part of the TikTok agreement, GoTo is set to divest ownership of its delivery and fulfillment unit, GoTo Logistics, which supports Tokopedia. This move will not impact the GoSend delivery service segment.

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• Indonesia's GoTo reports first-quarter loss but remains optimistic about profitability

• Partnership with TikTok shows promising early results

• Lower costs and increased income from Tokopedia expected to drive profitability

Source: REUTERS