as a glass half empty, or half full, according to taste. On 21 November the company announced generally positive results, once again featuring strong growth in gross transaction value (GTV), gross revenues, active users, and orders. Preceding that though, it also announced that as part of an organisational review it was reducing its headcount by about 1,300 people, or 12 per cent. Finally, the wave of layoffs affecting technology companies around the world had come home to GoTo.  GoTo has a reputation for spending generously on salaries and benefits. In the first nine months of the year, the company reportedly spent an average of more than $68,000 on each of its 10,500 employees — up over 100 per cent from the same period in 2021. Part of the spending was aimed at poaching the best talent from other companies. The retrenchments meant GoTo joined Singapore-based Sea Ltd., parent company of GoTo’s main e-commerce competitor, Shopee, which reportedly has also laid off 10 per cent of its workforce this year. Another e-commerce giant in the region, Amazon, has also announced plans to lay off about 10,000 employees, while social platform Twitter has famously reduced its workforce by half. GoTo’s layoff announcement took its place in the annals of corporate melodrama, with tearful executives baring their tortured souls during a Zoom town hall. It was part of a broader statement about cost-cutting that accompanied third-quarter earnings. Said Jacky Lo, the CFO: “Throughout the third quarter, we reduced incentives, eliminated promotional spend on cohorts of unprofitable users, further reduced product marketing spend and continued to develop a program of structural cost savings as we equip our business for the road that lies ahead.” Third-quarter results look good, except for profits GoTo has three main lines of business: e-commerce (the Tokopedia part), on-demand services (the Gojek part, consisting mainly of ride-hailing and food delivery) and financial services, which is principally e-payment systems. GoTo is still probably the market leader in Indonesia across e-commerce and on-demand services, but in e-commerce it’s a close call between it and Shopee. According to Kuala Lumpur-based hedge fund Khaveen Investments, GoTo’s once big lead over Shopee in the Indonesian e-commerce space had shrunk from 13 percentage points to 5 per cent by the end of last year. In the process, both of them had eliminated smaller competitors who were unable to keep pace, but Shopee seems to have gotten a bigger share of the spoils.  Still, GoTo company executives are waxing optimistic. In the January-September period, GoTo’s GTV was up 39 per cent year-on-year, although the growth-rate slowed a little in the third quarter. Gross revenue for January-September grew 42 per cent on the same nine months a year ago (30 per cent in the third quarter). The number of active transacting users (ATU) was 67 million in the latest quarter compared with 55 million in the third quarter of 2021, representing an increase of 20 per cent. Other key metrics improved too: 18 per cent growth in transaction value per active user and 28 per cent growth in orders. Of particular interest is the so-called ‘take rate’ or the percentage of GTV that accrues to the company in fees and advertising. (Roughly speaking, it is gross revenue divided by GTV.) GoTo’s take rate over the first 9 months of the year was 3.7 per cent, compared with 3.6 per cent in 2021. The take rate for ride hailing & food delivery is significantly higher than for e-commerce: 21.6 per cent in first 9 months of the year compared with 20.2 per cent in the first 9 months of 2021. For e-commerce specifically, GTV was up 21 per cent in the January-September period and gross revenue up a stellar 44 per cent, with a take rate of 3.1 per cent compared with 2.1 per cent last year. Even so, the company said its take-rate grew more slowly than expected because of a category shift into lower value products. Despite the clear shift in company focus toward profitability, GoTo still managed to accumulated a loss of 20.32 trillion rupiah (US$1.29 billion) between January and September, 75 per cent more than the 11.58 trillion rupiah loss reported a year ago. The share price, which peaked at 392 Rupiah in June last year, was trading at 157 Rupiah at the end of November. The earnings announcement included an enthusiastic plug for the company’s rewards currency, GoPay Coins, which has now been rolled out across the whole business. “Approximately 21 per cent of our annual transacting user base have been issued with GoPay Coins. To date, the increased utilisation of GoPay Coins has demonstrated 2.3x higher conversion for cross-platform user acquisition compared to other incentives, and lowered customer acquisition costs by 20 per cent compared with standalone platform incentives.” GoTo is also particularly keen to extend its services into secondary locations in the Indonesian countryside, including its regional cities, an ambition matched only by its degree of logistical difficulty considering Indonesia consists of approximately 10,000 inhabited islands. So the market is geographically highly fragmented. Nonetheless, if remote customers can be reached, then the potential sales are substantial. Indonesia has a population of 274 million, a number exceeded only by China, India and the US. Moreover, the age distribution is biased young and highly inclined toward the use of technology. Median age of the Indonesian population is 30, a little older than India (28) but well below China and the US (both 38).  According to  the Asian Development Bank, Indonesia’s economy should grow by 5.4 per cent this year and 5 per cent next. Inflation, expected to be around 6 per cent through the middle of next year, is cutting into consumer purchasing power though, and e-commerce companies like GoTo will need to have a laser focus on value for money.