Grab may face tougher fight in Indonesia if Gojek and Tokopedia merge

GRAB'S battle to dominate Indonesia, a market widely seen as the crown jewel of South-east Asia, could grow tougher, now that rival Gojek is reportedly exploring a US$18 billion merger with e-commerce giant Tokopedia.

However, this does not imply a straightforward path to success for a merged Gojek-Tokopedia entity. Key obstacles include the fierce rivalry from Sea, as well as difficulties both companies have faced in expanding beyond their domestic markets, industry watchers say.

Bloomberg reported on Tuesday that Gojek and Tokopedia have signed a detailed term sheet to conduct due diligence for a merger, while eyeing an initial public offering (IPO) of the combined entity in the US and Indonesia.