GoJek is finally shutting down most of the services on its GoLife platform, including GoAuto, GoGlam, GoDaily, GoLaundry and GoFix.

They are car wash, beauty, daily needs delivery, laundry and repair/services respectively.

GoClean (whose name is very intuitive) and GoMassage (even more intuitive) will remain – as they contribute to about 90% of the volume on GoLife.

The decision to phase out some services was because that the growth had stagnated.

Cleaning, on the other hand, has large recurring corporate demand (The same demand that kept Red Mart alive in Singapore).

We dislike service marketplaces

We have never been a big fan of service marketplaces (and wrote about them in 2017) – they are complex to operate and they lack frequency (for each service). Even classified would be a better business model. In fact, classified would have to rely on recruitment as well as used (second hand) cars, property and personal items to be profitable. Services are always a long tail.

China’s 58 is a listed company, so is Prosus, parent of OLX – you can find plenty of information about such business models.

How about beauty and laundry?

On the other hand, laundry and beauty services could be very profitable – while most O2O models which mushroomed in 2013/2014 in China have collapsed, eDaixi (laundry service) and Helijia (beauty) survived.

They have in the process adjusted their business models a number of times. Ultimately, how to deliver consistent, reliable and good quality service at scale and with cost under control is…. not that easy at all.

And probably requires a heavy offline presence.

Edaixi survived probably partially because it grew out of a traditional offline franchise

The good thing is – big platforms like Alibaba and Meituan would probably not want to go into these sectors themselves, instead it makes more sense to control the customer entry point, while letting someone else manage all these services.

Is that a moat we are talking about here?

There is a reason Meituan focused on food delivery. For GoJek, Grab’s open ecosystem model is probably interesting and useful.

 

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Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.