Indonesia’s ride-hailing company Gojek is making another attempt to enter the Philippine market, this time partnering with local e-commerce platform Zalora.
This is Gojek’s third try to enter the Philippines, where Grab enjoys a lion’s share of the ride-hailing market. Gojek’s previous two applications to do business in the country were denied due to its failure to meet foreign ownership rules. The Philippine Constitution restricts foreign individuals from owning more than 40% of a local company.
According to documents seen by Nikkei, Pace Crimson Ventures Corporation has bought a 60% share of Gojek’s local subsidiary Velox Technology Philippines, meeting the 60/40 ownership rule that is required by Philippine laws. Zalora CEO and co-founder Paulo Campos owns a 35% share of Pace Crimson Ventures.
“Velox Philippines is thus 60.01% owned by Philippine nationals and thus compliant with foreign ownership limits,” SEC General Counsel Camilo Correa wrote in an opinion in the SEC website.
Gojek’s entry was delayed several times, first on September 2018 when the Land Transportation Franchising and Regulatory Board (LTFRB) issued a moratorium on the accreditation of transport network companies (TNC). Gojek’s applications on December 2018 and March 2019 were also denied for its failure to comply with foreign ownership rules.
“We have seen the documents and we have endorsed it to the DOTr (Department of Transportation),” said LTRFB chairman Martin Delgra.
“Transportation Secretary Arthur Tugade will sign the decision,” said DOTr Undersecretary Mark De Leon, who added that Gojek’s application is now in the department’s franchise review section.
Valued at over $10 billion, Gojek is in the midst of an aggressive regional expansion as it challenges Grab for dominance of the lucrative ride-hailing market in Southeast Asia. Gojek recently acquired mobile wallet Coins.ph for $72 million and sees the Philippines, with a population of over 100 million, as an important step in the company’s growth and expansion. The ride-hailing company recently expanded into Singapore and Thailand, and is setting aside $500 million to enter more markets.