Coffee, fried chicken, rides: AirAsia Super App Indonesia diversifies from flights
Hot on the heels of AirAsia Food, the AirAsia Super App plans to launch its Indonesian online ride-hailing services on the resort island of Bali.
JAKARTA: Capital A, formerly known as AirAsia Group, is actively expanding other businesses to diversify its portfolio in Indonesia, as it seeks to grow its non-airline revenue.
In its latest expansion, the company plans to extend its online ride-hailing services accessible via its mobile application to Indonesia’s lucrative tourist destination of Bali, in time for the year-end holidays.
The move is in line with AirAsia’s plans for its app which it has named the “AirAsia Super App”. The app allows users to do hotel and activity bookings alongside its flagship flight offerings, as it looks to provide a one-stop shop for travellers.
“Our DNA is in the travel business,” Mr Delly Nugraha, country head of AirAsia Super App Indonesia, told CNA. “We know the travel (business) really well, we know how travellers behave, we know what are the ecosystem aspects that they expect to have when they travel.”
Mr Nugraha said that preparations are in place to recruit drivers for its Bali ride-hailing fleet, prioritising those who are service-oriented for better interaction with tourists.
FOOD DELIVERY SERVICE
This venture comes hot on the heels of its food delivery service AirAsia Food, which was rolled out in March this year in Tangerang, West Java, followed by Jakarta in June. Since then, thousands of merchants have registered with the platform.
Among the vendors is Flash Coffee, a Singapore-based beverage brand. The company entered the Indonesian market in 2020, right before the COVID-19 outbreak, and managed to grow rapidly despite the pandemic with its use of technology, offering easy online orders and quick pick-ups.
Calling itself a “tech-enabled” coffee chain, Flash Coffee places high priority on digital optimisation and delivery services. Online sales account for 65 per cent of its overall transactions.
Flash Coffee’s head of marketing in Indonesia Grace Surya said that the coffee chain uses technology to monitor consumer behaviour, and sees a continued demand for food delivery.
"We have had this pandemic for around three years, and then we keep on monitoring the market behavior shift, especially food delivery,” Ms Surya said. “Actually, the market behavior, in terms of the interest in using online food delivery platforms, they're actually increasing. So, I think the behavior (will) stay.”
Chicken franchise Ayam Gepuk Pak Gembus is another merchant on the AirAsia Food platform, offering delivery of the traditional Indonesian staple of “smashed” fried chicken marinated with herbs, and served with rice and sambal chilli.
The company noted the significance of online delivery platforms and has plans to launch its own next year.
"If we have our own app, we can check our customers’ behaviour. Is the customer making repeat orders? And we can monitor this in real time. Which products have the most sales, which have fewer sales, what do customers like, and what kind of promotions attract customers?" said Maria Barnomo, operational director of Ayam Gepuk Pak Gembus.
The AirAsia Super App Indonesia is relatively new compared to its more experienced tech counterparts such as Grab and GoTo, and may have to resort to a cash burning strategy to attract partners and consumers, observers said.
Grab and GoTo in Indonesia have expanded beyond their initial premise of offering ride-sharing services. They have also moved into food delivery, and together hold 92 per cent of Indonesia's food delivery market in 2021, according to a Bloomberg article quoting Momentum Works.
However, AirAsia, which has a significant presence in the region as a low-cost airline, has the advantage of an existing customer base.
“If we study AirAsia, it's very interesting because it already has a customer base. It only needs to widen its application, and introduce new features. This makes it easier for them, as compared with players who enter the market without any customer base," said Heru Sutadi, executive director of Indonesia’s ICT Institute.
Capital A has poured more than US$40 million into its super app business, and is looking to secure US$100 million more by next year.