Hello, everyone. This is Reggy Susanto, Head of Investor Relations, and welcome to the PT GoTo Gojek Tokopedia Q1 2023 earnings conference call. Please be advised that today's conference is being recorded. Joining us today from GoTo Group senior management are Andre Soelistyo, President Director, Group CEO, and Co-founder, and Jacky Lo, Group CFO. Following management's prepared remarks, we'll open up the call for questions. We would like to highlight that the information presented today has been prepared solely as results based on unaudited, consolidated, selected financial information for the three months ended March 31st, 2023. Furthermore, as a reminder, today's discussion may contain forward-looking statements about the company's future business and financial performance.
These comments are based on assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements, including as a result of the factors described in cautionary statements and risk factors included in the company's earnings release and regulatory filings to the OJK and IDX, by which any forward-looking statements made during this call are qualified in their entirety. This call also includes the discussion of certain non-Indonesian financial accounting standard measures such as gross revenues, contribution margin, and adjusted EBITDA. We believe these measures can enhance investors' understanding of our business performance when used as a complement to Indonesian financial accounting standards disclosures. During this earnings call, we will be going through our results of operations and earnings presentation, which can be found on our website.
For more information and additional disclosures on our recent business and financial performance, please refer to our earnings press release and supplemental presentation, which can be found on our IR website. With that, I will turn the call over to Andre.
Thank you, Reggy. Hello, everyone, and thank you for joining our call today. Last quarter, I spoke about our focus on accelerating towards positive operating cash flow generation. Today I'm happy to report extensive progress on this front. In Q1 of 2023, we reached a key milestone, positive group contribution margin, while adjusted EBITDA, our proxy for operating cash flow, improved 67% YoY and 49% QoQ to IDR -1.6 trillion. This signals that we are halfway towards achieving positive adjusted EBITDA in Q4 of this year as per our guidance. This progress is a testament to the single-minded focus of our management team and everyone at the company as we reduce our variable and fixed costs while growing our revenues as we drove a transactional efficiency by focusing on high quality usage throughout our ecosystem.
For today, I'd first like to provide an update on our profitability journey, including how meaningful cost reductions are creating value for our organization. I will provide some color on growth and how we are fine-tuning our business so that it is prime for future ecosystem expansion. As I mentioned, group contribution margin turned positive in this Q1 , in line with our guidance. Each of our core businesses is delivering healthier results and showing that they can be independently profitable. To dig a bit deeper into that, e-commerce turned CM positive in Q1 of 2023, following the same trajectory as on-demand services in Q4 of 2022. GoTo Financial also turned CM positive in Q1 of 2023, although we expect fluctuations here as we continue to invest in this space over future quarters.
As of Q1, we've also consolidated our logistic and fulfillment services, forming a fourth reporting segment, GoTo Logistics, which I will provide more details on in a few moments. In Q1, we implemented our strategy by optimizing e-commerce C2C and B2C merchant commissions, while at the same time continuing to reduce our incentives and product marketing spend, resulting in a reduction in associated costs of 39% YoY. Despite these changes, our merchants stayed loyal to our platform, with the number of active merchants on the platform remaining stable. This demonstrates the value of our ecosystem and the merit of our value-added services bringing to the merchants.
With respect to fixed costs, which we have been progressively reducing since the second half of last year, we have so far reviewed and identified cost saving opportunities across more than 15,000 line items with the aim of creating a leaner, stronger foundation from which to grow. As a result of these combined efforts, we decreased recurring cash OpEx in Q1 by around IDR 460 billion or 17% QoQ. With regard to people costs, which form around 60% of our recurring cash OpEx, the full effects of the headcount reduction we announced in November 2022 resulted in around IDR 210 billion of savings from our personnel cost base or a 13% improvement from the previous quarter. Savings from the more recent reduction announced in March will be reflected from May onwards.
For non-personnel costs, which form around 40% of our recurring cash OpEx in the Q1 , we have either cut various expense line items that are not fundamental to our core value proposition or found ways to generate the same outcomes at a lower cost. One of the most significant areas of improvement is within our technology organization. Our engineering team has been continuously developing tools and processes that have allowed us to fundamentally streamline IT costs now and over the coming months and years. This has already started to show result with a 19% QoQ reduction in IT expenses in Q1 of this year. Turning to our product-led growth strategy. As we outlined on our last call, our efficiency improvements will result in slower GTV and transaction growth, and we have seen this begin to happen in Q1.
Slower growth is driven by the conscious decision we have made to weed out low-quality, subsidy-driven transactions as we calibrate our business for a future in which every user can be profitable. Significant progress is being made, as shown in the fact that revenue growth outpaced GTV growth. The number of high-quality profitable users remained stable in Q1 and constituted more than 70% of the users, despite adverse seasonality impact and a significant reduction in incentives. GTV per profitable user grew 1/4, comprising more than 70% of our overall GTV in the Q1 . Contribution margin per profitable user also grew by around 5% QoQ.
As we continue to reduce costs, future growth will be driven not by subsidies, but by the de-development of foundational products and services that lower our cost to serve and really add value to customers' lives as we position ourself to take the full advantage of Indonesia's vast, fast-growing total addressable market over the long term. I've spoken previously about products such as Mode Hemat, which offer economical options to consumers we might otherwise not have reached. Early results have been promising, with our Hemat offering already contributing to mid to high single digit order penetration within our transport and food offerings in Indonesia at the end of the Q1 , despite being launched only a few months ago.
This gives us confidence that we're on the right track, and there is much more to come as much of our product innovation will be released later in the year, acting as a growth accelerant for our business over the coming quarters. For Q1, there are two developments I'd like to touch on. Firstly, how we are investing our supply chain to structurally reduce our costs and improve user experience via GoTo Logistics. Secondly, how we are building our lending business. The scale of Indonesia, coupled with the breadth and complexity of our company, mean we have always had a wide range of fulfillment and delivery solutions within our ecosystem. Tokopedia delivers to 99% of districts across the country, providing a range of options from premium, instant, and same-day offerings to regular lower cost deliveries.
Tokopedia also provides fulfillment services to third-party merchants, which involves holding their inventories in our hubs and providing order management services. At the same time, Gojek provides dedicated same-day and instant delivery services to e-commerce platforms, supporting both point to point, as well hub to point delivery methods. Given this large and complex spectrum of activity, it makes sense for us to bring Tokopedia's fulfillment unit and Gojek's e-commerce same-day delivery unit under one segment called GoTo Logistics. Doing this will enable us to look at logistics holistically, making it easier to identify opportunities to make our processes more efficient on a cross-platform basis.
One of our key aims is to reduce e-commerce delivery costs for consumers, especially in Jakarta and other tier one cities, through aggregation with our fulfillment centers at the core of hub and spoke distribution networks around the country, covering areas of dense demand. The overarching goal is to realize economies of scale to drive down costs while also improving speed and reliability of deliveries for buyers and merchants. Part of the reason for creating GoTo Logistics is to make it easier to identify components of our fulfillment and delivery processes that are not core to our broader strategy. Such inefficiencies are evident in the GoTo Logistics negative bottom line currently. The new structure provides us with a clear baseline from which to implement our strategy, making it easier for us to focus on recalibrating our operations in core geographical areas while streamlining ecosystem costs.
Ultimately, GoTo Logistics represent a unique opportunity to leverage our large captive volumes, fulfillment footprint, and delivery capabilities to create a best in class end-to-end service that will ultimately translate into economic savings that we can pass on to consumers to drive growth. We're excited to say that early results have proven our GoTo Logistics thesis. With enhanced batching and routing capabilities, we're able to provide conventional next day delivery services at around 30% of lower cost compared with similar services provided by third-party logistics providers. We will continue to scale up this in-house delivery capability, making delivery affordability as a key part of our e-commerce value proposition. Turning to lending. Consumer lending drives the payment flexibility of our on-demand services and e-commerce platforms, which increases consumer loyalty and spend in our ecosystem, as well as driving platform monetization.
For example, e-commerce consumers on average spend around 25% more after they first use GoPay Later Cicil based on observations on earlier borrowing cohorts. Given the multiplier effects that it brings to our ecosystem, we will accelerate consumer lending this year while being very prudent in managing risk. We have generated outstanding loans of around IDR 831 billion from our consumer lending business as of the Q1 of 2023, reflecting a growth rate of 40% QoQ. Moreover, our data capabilities mean that we are able to continuously enhance our credit scoring model, which enables us to manage risk effectively. This result in a quality loan portfolio with average loans dispersed across all of our consumer lending products, generating positive contribution margin.
We will continue to strengthen our strategic partnership with Bank Jago as we work together to further develop GoTo's consumer lending value proposition. Before I hand the call over to Jacky, I'd like to reiterate that our fundamentals are showing strong improvement. As we advance towards profitability, we will continue to focus on high-quality users and cost controls while prudently investing in products and infrastructure that support our long-term vision. This may result in slower GTV growth in Q2 as we calibrate for our higher quality usage. This trade-off is a calculated one as it supports our near-term goal of positive adjusted EBITDA in the Q4, as well as our long-term goal of resiliency. We will focus on re-accelerating growth over future quarters. I will now turn the call over to Jacky to review our group and business segment performance. Jacky, over to you.
Thank you, Andre. Good day, everyone, and thank you for joining us on today's call. For the Q1 of 2023, our group GTV increased 6% YoY to IDR 149 trillion. Our overall take rate grew by 29 basis points and group gross revenue was up IDR 750 billion, or 14% YoY to IDR 6 trillion. As we indicated last quarter, slower GTV and transaction growth is expected throughout the first half of this year as we accelerate our plans to reach profitability in the immediate term while focusing on growing our high-quality user base. We hit positive group contribution margin in the Q1 , which is in line with our guidance. Group contribution margin reached a level of 0.4% of GTV, reflecting an improvement of 224 basis points YoY.
As Andre discussed, our link to positive contribution margin was largely driven by a reduction in incentives and product marketing of 39%, reflecting total quarterly savings of IDR 2.6 trillion YoY. Group adjusted EBITDA improved by 67% YoY and 49% QoQ to IDR -1.6 trillion, or - 1.1% of GTV. Meaning we are on track to turn adjusted EBITDA positive in the Q4 and start generating positive operating cash flow shortly thereafter. We are confident we can get there without external funding. Our cash and cash equivalents of IDR 26.8 trillion at the end of the Q1 , along with IDR 3.15 trillion remaining in our IDR 4.65 trillion credit facility, provide us with ample cushion.
Before moving on to segment highlights, I would like to go over the improvement we made to our segment disclosure, which provide greater visibility on our business structure. First is the introduction of logistics segment under GoTo Logistics, which Andre has spoken about. We have provided segment results for 2022 that have been aligned with the current segment presentation. Secondly, we'll be reporting segment adjusted EBITDA and corporate costs for the first time starting this quarter. We are providing 2022 numbers for comparison purposes that have been aligned with the current segment presentation. The reconciliation between segment loss from operations and segment adjusted EBITDA can be found in our earnings presentation on our website.
In the Q1 of 2023, recurring cash OpEx that seats at the corporate level total IDR 310 billion, or 14% of total group recurring cash OpEx. We allocated IDR 139 billion of such corporate costs to compute segment loss from operations and segment adjusted EBITDA for each of our operating segments. With that, I will now walk through each of our core segments. In on-demand services, our primary focus is on improving monetization through the refinement of commissions and fees. In transport, this translates into improving commission rates while implementing tiered platform fees. This has resulted in gross revenue of IDR 3 trillion, an increase of 12% YoY, despite GTV declining to IDR 13.7 trillion, or a decrease of 5% YoY.
It's mainly driven by heightened GTV for food deliveries during the Omicron lockdown period last year, as well as our profit focus strategy to prioritize high quality rather than incentive-driven usage. We expect GTV to moderate further in Q2 as we continue to focus on this strategy. Monetization improvements from our commission adjustments have also paid off. As mentioned, as of February, we increased the commission rate in Singapore from 10%- 15%, contributing to an overall take rate increase of 324 basis points YoY. Going forward, we'll continue scaling our profitable economy products alongside value-added and premium services, all of which account for 10% of transport orders in the Q1, up from 4.8% in the prior quarter and 3% in the Q1 of last year.
For food deliveries, our platform setup allow us to vary fees based on the individual consumer or merchant, as well as the purchasing occasion. Combining this with incentive and product marketing rationalization, we achieved a reduction in incentives and product marketing as a percentage of GTV of 347 basis points YoY. Continuing the trend of improvements delivered throughout 2022. On a blended basis, we reduced our on-demand service incentives and product marketing by 30% YoY, which is equivalent to around IDR 900 billion in quarterly savings. As a result, our on-demand service improved its profitability in the Q1 , with contribution margin change 3.8% of GTV, an 881 basis points improvement YoY.
During the Q1 , food deliveries also turned contribution margin positive, showing the increasing health within our on-demand services business and the resilience of our high-quality users, even as offline options increase in the reopened economy. This building block helped us to achieve adjusted EBITDA of -1.8% of GTV for our on-demand services, an improvement of 976 basis points YoY. Looking at e-commerce, GTV moderated to IDR 63 trillion, showing a YoY decline of 3.6%. If we take a step back, we can see the Q1 of 2022 is a challenging comparative as the rise of the Omicron variant propelled e-commerce tailwinds. GTV was also impacted by the deprioritization of Mitra Tokopedia, our non-core B2B marketplace offering, with the effect appearing in this quarter.
Excluding the impact from this business, Tokopedia GTV remained largely flat YoY, despite challenging macroeconomic trends and significant rationalization on promotion spend. We are making excellent progress in driving monetization while maintaining our sizable market share. Gross Revenue was IDR 2.3 trillion, showing a YoY increase of 21%. E-commerce take rates improved by 72 basis points YoY and reached 3.6% of GTV in the Q1 . We continuously improve our merchants app's functionalities, enabling merchants to get meaningful competitive insights and marketing tools to drive sales. This has allowed us to generate higher C2C and B2C commission rates starting in the Q1 of 2023.
Our take rate from advertising also continue to grow quarter-on-quarter, following the implementation of dynamic ad slots in search, which prioritize search relevance and local products, and therefore increase ads relevance and provide a better user experience. We'll continue to introduce innovative technology that drives ads relevance and conversion rates to support continued monetization growth. The e-commerce business turned contribution margin positive for the full quarter for the first time at 0.3% of GTV, improving by 223 basis points YoY. Even without the movement of fulfillment unit into the logistics segment, contribution margin would still have been positive in this quarter. This improvement is supported by a more personalized and targeted promotion algorithm, enabling us to reduce incentives and product marketing spend by 44% YoY, equivalent to IDR 1.2 trillion in quarterly savings.
Following the improvement in contribution margin and our disciplined approach to cost, adjusted EBITDA for e-commerce was -0.8% of GTV for the Q1 , improving by 232 basis points YoY . We continue to focus on increasing penetration of GoPay Later products on Tokopedia to drive payment flexibility. We are improving our user targeting and created a machine learning model for more effective targeted communications and promotions to consumers who are most likely to benefit from Pay Later services. Together with GoTo Logistics, we are driving initiatives to reduce the cost of logistics by leveraging our hub and spoke infrastructure and in-house delivery capabilities. Regarding financial technology, GTV reached IDR 91.5 trillion in the Q1 , maintaining positive growth of 18% YoY.
Gross revenue grew 25% YoY to IDR 424 billion, while contribution margin improved by 47 basis points as percentage of GTV YoY to IDR 19 billion. We are making strong progress towards profitability while maintaining growth with lower incentives per user. In fact, we improved incentives and product marketing by 54% YoY, with minimal revenue impact. Adjusted EBITDA for Fintech was negative 0.6% of GTV in the Q1, improving by 41 basis points YoY. Along with our strategy to focus on existing high-quality growth, we have seen the quality of GoPay users improving with average spend per user in the quarter increasing by more than 30% YoY.
All of this, combined with the expansion of the lending business discussed by Andre earlier, means GoTo Financial is well positioned as a foundational driver of future growth and profits. Having said that, we expect potential quarter-to-quarter fluctuations in margin as we continue to invest in this phase. Onto GoTo Logistics. First quarter gross revenue for GoTo Logistics was IDR 580 billion, and adjusted EBITDA was IDR -156 billion, an improvement of 37% YoY. The revenue for this segment mainly includes revenue from our in-house next day, same day and instant delivery services, as well as revenue from our fulfillment businesses.
Encompassing handling and storage fees and revenue from e-commerce enabler services. The cost for these segment mainly include fulfillment operation costs, charges from third-party delivery partners in our 4PL delivery model and driver costs within in-house delivery. We are investing in growing our last mile delivery capability, enabling us to serve premium instant and same-day delivery and conventional delivery. This year, the focus will be to streamline and reconfigure key areas while making structural improvements within both the fulfillment and delivery units to create long-term efficiency. Fulfillment is still in the early stages, this year focus is on improving assortment mix and inventory turnover rate to enhance unit economics. We are keeping fulfillment CapEx low through leasing as opposed to buying or building our own warehouses.
We'll also scale our conventional next-day capability in a relatively asset-light manner, leveraging existing hub and spoke infrastructure as much as possible. This should allow us to continue reducing losses without significantly increasing capital expenditures for the rest of the year. In closing, we would like to reiterate our guidance timeline in which we expect to reach positive adjusted EBITDA within the Q4 of 2023. For the full year 2023, we continue to project group adjusted EBITDA to be between IDR -5.3 trillion and IDR -4.6 trillion rupiah. With that, we will now like to open the call to your questions. Reggy, over to you.
Thank you, Jacky. We will now start our Q&A section. Please use the raise hand function to ask your questions. Please wait a moment while we assemble our roster. Our first question comes from the line of Usjima Pang Vittayaamnuaykoon from Goldman Sachs. Your line is now open. Please unmute your microphone to ask your questions.
Well, thank you very much for the opportunity and good afternoon, everyone. Just a few questions from my side. Number one, on the GMV outlook. In the statement, you mentioned that you are looking for second quarter GMV to continue to trend lower. Can we have more color on how this will look like on per segment basis? Which one will lead the weakness and which one will see a little bit of the better momentum? How will this translate to your full year GMV outlook as well? That's question number one. Question number two related to e-commerce GMV that we see this quarter. Can we have more color on how it looks like on an order and AOV basis?
As you mentioned that this is based on your conscious decision to wean off low quality orders, can we understand if the exercise is largely done, or are we going to see more downtrend coming in the next few quarters as well? The increase in take rate that we see this quarter, where is it coming from and, how much more can we expect this to go? Lastly, update in term of the competitive landscape as well. Do you see any changes post yourself turning focus into profitability?
Thanks, Pang. This is Andre. I'll start with your lots of questions. Let me try to actually answer this one by one, and I might need Jacky's help on some of this as well. On a first question on GMV outlook, I think generally, I would start with saying that I think we need to acknowledge that, you know, through the combination of the following, it's actually resulted in this slower and moderated growth, which we have obviously guided the analysts and investors in the previous quarters.
First is acknowledging that macro, you know, situation does change and did change with a lot of the inflation adjustments, you know, economies opening up, which means that there's actually more competition towards offline activities. Also some of the price hikes that we've seen in various items, especially on the fuel price. There's actually that, coupled with some of the adjustments with the market, where a lot of the, you know, platforms, if you may, digital platforms also reduced its incentive, that created a little bit more, you know, significantly more moderated growth from a market perspective.
To note, on that as well, we, you know, based on a lot of the data that we have from a competitive intelligence and market share perspective, despite this, moderated growth in Q1, in many aspects of our product and use cases, we're still continuing to preserve our market positioning. Which means that, you know, the market itself is a little bit slower, if you may, to begin with.
Now in addition to that, as mentioned, during the script, scripted call, a lot of this decision is also very conscious decision because in order for us to actually really understand the way that we divide the user perspective and user lens and our ability to actually see the trajectory of each of the users become profitable, we need to change a lot of the way we incentivize and subsidize, and experiment with many different things to actually create an outcome that is positive but is less, much less, need for subsidy and incentive. I think the results have been great.
I think we spoke about the fact that our high quality users and profitable users continue to rise up, continue to actually transact more and continue to become more and more profitable in the system. While the conscious decision is that there are many users in the system that actually stayed because of the over incentivization. I think, you know, with this kind of trajectory, as mentioned, Q2 will continue to be a moderated growth. As mentioned as well, in the second half of the year, with the various experiments and investments that we are doing on the different foundational products, we do see that our ability to start accelerating growth again, can actually be done through this kind of activities.
One of the things that I am really, really obsessed about is really to reduce the cost to serve so that a lot of our use cases can be capturing the segment of affordability. A lot of our investment in the past is to really focus on the best-in-class operation, sometimes it comes with obviously heavier operating costs as well. Now, we've seen that with the experiments and a lot of the market study that we have, it doesn't mean that lower segment users cannot be profitable or high quality. It means that we have to change the way that we organize so that the cost to serve can actually be manageable.
A lot of this actually, for instance, resulted in a lot of investment in the logistics piece because many of our transactions are delivered, either it's food or e-commerce. That's why GoTo Logistics with a lot of the things that we're doing is super important. The other thing that we do is also to think about how we really build our overall app experience. For the affordability segment, certain pieces of the capabilities, including like machine learning models, a lot of the infrastructure and engineering platforms that we use might not be need to be necessary in order to actually capture the affordability segments. Some of these experiments has actually already been done in ODS, as mentioned during the remarks earlier.
You know, we actually experimented with Mode Hemat economical order, in English. The results are actually really, really strong. It actually has already captured about 10% of transportation orders in Q1 of this year. Obviously, this gives us confidence that we're in the right trajectory. So this... You know, I'm talking about it more from a qualitative perspective. Maybe Jacky, if you have any additional points, you know, to add on in terms of more quantitative, feel free to add.
Andre, I think, Pang, thank you for your question. As mentioned on the last earnings call, we stopped providing guidance on the top line. I think directionally, we shared before, first half will be focusing on the profitability and building the foundational products. There will be like moderations and also because of the lapping last year's Omicron tailwind. I think second half we do expect it will be go back to like the growth that we have seen in the past. As I said, we don't provide like quantitative guidance in terms of top line. I hope that answered your question, Pang.
Yeah. To your second question on e-commerce. Order and AOV, AOV actually maintains its consistency. There's no significant fluctuations on a quarter-over-quarter basis. The decision to actually weed out lower quality will continue to actually be done in Pararel, Pang, while we're actually obviously investing in foundational capabilities to actually push for growth again. One of the things that's super key for our e-commerce product is definitely on logistics. At the end of the day, a lot of the costs, especially on cost to subsidize, is really on subsidizing the delivery to actually entice more users to actually transact more online versus offline.
You know, I think delivery cost is actually really, really important. This is Again, there's actually two strategies that comes within this. First is, as mentioned during the conversation around GoTo Logistics, the strength of Tokopedia today is really on hyperlocal. We are, yes, our coverage today is stronger in tier one and tier two cities. That also means that our ability to actually aggregate a lot of the orders and reduce the whole end-to-end supply chain to reduce the overall delivery costs is actually going to be more prevalent for us versus the other competitors who are more focused on tier two and three cities. This is actually the main strategy that is very, very key.
Not only by doing that through our fulfillment and also last mile delivery capabilities that we're continuing to invest, not only we can actually reduce the cost by aggregation, but I think more importantly that the speed and reliability will actually continue to be enhanced because of that as well. That's actually not only, again, saving you costs, but also increasing the service experience. Therefore, there's actually multiple kind of hopefully multiplier effects coming to this as well. In general, it doesn't mean that we're only focused on this last mile, hyperlocal, intracity delivery, we're working with our third-party logistic provider partners as well to continue to actually reduce the overall costs to deliver for even intracity and intra- island. Sorry, intercity and interisland as well.
This actually will be a key to actually unlock the market. The conviction comes because, again and again, if we look at the e-commerce penetration in Indonesia, it is still at the lower level compared to many comparable countries, China, India, and many others. Today it's really about the heavy lifting on what is really key on building that operational capability. One of the key aspects, in addition to many other things, is on the logistics, as mentioned. On the competitive landscape, we have not seen many kind of different changes on. Compared to, like, Q4. As you know, Shopee continues to focus on profitability. You know, there's a social commerce player, which continues to actually invest.
I think that a lot of the, you know, kind of normalization in terms of their take rates and charging mechanics to merchants continues to rise up as well. There's actually a little bit more normalization that we've seen on that. Yeah, we haven't, we haven't seen anything dramatic in the competitive front. Hopefully, I answered a lot of your questions, but I know that you have lots of questions, and hopefully we can actually cover that in greater details, post earnings call.
Thank you, Pang. Our next question comes from the line of Adrian Joezer from Mandiri Sekuritas. Your line is now open. Please unmute your microphone to ask your questions.
Hello. Yes. Thank you, Reggy Susanto, for the opportunity to ask questions. Also thank you Andre Soelistyo and Jacky Lo. Just two questions from me. The first one is actually as regards to, if you can actually provide more colors as regards to the e-commerce take rates, incremental improvement to 3.6%. I think it was mentioned in the call that if you exclude the deprioritization of Mitra Tokopedia, then the GTV for e-commerce should be roughly about flat YoY.
If I calculate, if I assume that Mitra Tokopedia has a take rate of about 1%-2%, that means your e-commerce take rate, if we assume that Mitra Tokopedia remains there, you'd roughly be about 3.5%, which is only increasing by about, I mean, 0.1 percentage point quarter-on-quarter. If you can actually provide us with some color as regards to the GMV mix as we move into Q1 2023. That's the first question.
The second question, I think, I'm interested to know more about the logistic cost per order as of Q1 2023 for the e-commerce, and how has this been trending in terms of the quarterly trend for the past four quarters. Also, related to that, if you can actually provide us any guidance on the CapEx for GoTo Logistics for 2023. Thank you.
Thank, thanks, Adrian. Jacky, do you mind answering the first question on take rates?
Sure, yeah. Hey, Adrian, if you look at the take rate for e-commerce on a blended basis, it was 3.6%, right? Quarter-on-quarter it went up about 40 basis points, and YoY it's about 72 basis points. If you just look at our the commission rate for physical goods, as a percentage of physical goods GTD, it actually went up about 60 bips. Yeah, that was from the C2C as well as B2C commission rate increase in the Q1. Ad sets continue to be roughly about 1% of the overall contribution of the take rate. Yeah, but overall, the increase is coming from the commission side.
Hey, Adrian, can I clarify a second question on what do you mean with logistics cost per order?
Yes. Sorry. I meant, you mentioned about the delivery costs, being an important component to incentivize consumers to shop online rather than offline. Just wondering the average consumers' payment. I mean, maybe for the logistic cost or you call it the last mile cost that we have the customers pay on your platform?
Yeah. We'll get back to you on, like, specific, but just to give you a color. Obviously, there's free delivery or what we call the Bebas Ongkir program. You know, it's being called Bebas BO program in Tokopedia, and I think in other platforms it has similar kind of, you know, different names but similar construct, where consumers are able to actually, depending on different tiers of their loyalty, to get quota on BO programs. There is a cap on minimum transactions and that actually needs to be met to actually get the quota. Then there's also maximum quota in terms of the BO program itself. Despite that it is actually a VO or a free delivery program, Adrian.
In reality, the cost is borne by multiple kind of stakeholders. First is by the third party logistics providers, which provides commission to the transaction. Then the second is actually most recently, we decided to actually charge VO programs to the merchant as well. Merchants who are participating, it is an option by the merchants to actually participate. When they participate, they are subject or they are part of the VO or free delivery program. On every transaction that actually consumes free delivery, there's actually additional, around 3%-4% extra commission, to actually compensate against the spend.
I think net cost to us continue to dramatically reduce while the payment that consumer made from a quantum perspective does decrease because of the different quotas that is actually either reduced or increased depending on the spending or the limit in terms of the spend. To actually quantify that into like exact Rupiah, I need to get back to you.
Thank you, Adrian. Our question comes from the line of Ari Jahja from Macquarie. Your line is now open. Please unmute your microphone to ask your questions.
Thanks, Reggy, for taking my question. Thanks, Andre and Jacky, for the updates. My first question is in regards to take rates for the ODS and Fintech. Looks like the take rates were weaker on a quarter-on-quarter basis. Just wondering if there's any opportunity to improve these further. Understand that for the e-commerce there are clear drivers on the higher take rates, but just wanna get better understanding on the ODS and Fintech for this year. That's my first question. Thank you.
Hey, Ari, when you say the take rate for ODS was weaker, I think you are comparing last quarter's announced numbers, right? If you recall, we actually moved the B2C delivery units to GoTo Logistics. That has roughly about like 2.5% impact on the take rate on-demand service. If you do an apples-to-apples comparison, like by excluding this B2C like delivery unit from the on-demand service rate, quarter-on-quarter, actually the take rate improved, I think by about 110 basis points. YoY is over 320 basis points. We are still continuously improving the take rate.
Specifically, I think for both food and transport, we have very strong quarter-on-quarter improvement in the take rate. As we shared during the prepared remarks, some of the initiatives like the tier platform fee, we are doing like dynamic pricing during peak hours for food delivery. All this helps to continue to drive the take rate for both transport and food.
I think, Ari, I think, you know, we also need to acknowledge that for on-demand services, as mentioned many, many quarters ago, the take rate kind of monetization have started, you know, since two, three years ago. It does have, you know, obviously gone to a level where it's comparable to the global standard group peers as well. As Jacky mentioned, it doesn't mean that the improvement is not, is not there, but definitely will be smaller in terms of pecentage compared to the e-commerce nor the Fintech part of the equation.
Now to your question on GPF, as mentioned, I think for payments, because we cover both consumer and merchant payments, the take rate is much more regulated by the central bank, so that the capability like the e-commerce on the on-demand segment to actually continue to increase is not very much as clear as it, you know. A lot of the take rate increase actually comes from two areas. Number one is, as mentioned, the more that we actually convert and size up our loan book, of, you know, converting the payments from just normal payments to Consumer Lending Act products such as PayLater Akhir Bulan or PayLater Cicil, the improvement on take rate will start to actually be meaningful.
As mentioned, I think this Q1, there's quite meaningful growth, albeit it's still coming from a smaller base. I think, starting from second half, we'll see more and more kind of a significant contribution that actually start blending up the take rate of GPF in a more meaningful manner coming from the Fintech base. The second is actually on value-added services as well because the opportunity to actually leverage on this to actually provide merchant value-added services such as targeted promotion, targeted advertising is also existent for payments business. This is actually something that we're also working on at the same time.
I think the most meaningful kind of a deviation will start to come in, because of the size of growth, that were loan book, for Fintech.
Thank you, Ari. Our next question comes from the line of Varun Ahuja from Credit Suisse. Your line is now open. Please unmute your microphone to ask your questions.
Yeah. Good evening, management, and thanks for the opportunity. I've got two questions. First on Fintech side, if I remember, you mentioned around IDR 831 billion or Indonesian Rupiah was the loan, which is around $6 million. Is this largely loan book?
What is the plan to grow this? Because the loan book size obviously looks a little bit relatively lower compared to peer set. Do you have plans to go big on merchant lending also? It's gonna be still a consumer loan that you're looking at it. If you can elaborate what color, how do you plan grow to it, and whether the current 56 million is through your own balance sheet or you're still partnering with anything, more details will be helpful. Number two, to look at your fintech GTV, both on a quarter-on-quarter basis, despite the decline in both on-demand e-commerce, it has grown strongly, showing that your payment processing or your offline side of GTV is doing relatively better.
What's the plan to monetize that better in terms of giving color? How are you looking at that part of the business to contribute to the fintech side? That's number two. Yeah, I think that's about it.
Thanks. Thanks, Varun, on your first question, the loan book of IDR 830 billion is only consumer. We have actually a merchant lending product both in food and also Tokopedia, that actually is quite sizable. This year, I think, you know, while merchant lending is actually a key value proposition that we offer to our merchants, but I think for, from priority perspective, we're focusing a lot in, like, really expanding our consumer loan product. Then, you know, to give you a perspective, there are three main products in consumer lending. First is end of month payment, or what we call Pay Later. The second one is installment or Pay Later retail.
The last one is what we call GoPay Pinjam, which is a cash loan product that we actually experiment within the Gojek app, but it will actually expand into the multi-apps as well for our users to actually utilize. Yes, it looks a little, you know, a little bit smaller compared to maybe some of the peers that you are benchmarking. Nothing that, you know, we just started our GoPay Later retail product in Tokopedia back in October of last year. This is despite that it's just been a few months of expanding the product itself.
Obviously as we progress, and now we have a lot more confidence in looking at the user conversion, also the cohorts of the loan repayment, you know, we have much more confidence to actually put this across the board. Now I think I'd like to answer your second question, but it's also linked to the first one. I think the opportunity for consumer lending doesn't stop just in the Gojek and Tokopedia app.
While because of the penetration of the lending product in Tokopedia and Gojek is still relatively small, compared to our payment volume or payment penetration itself, and it allows us to actually have large gift volumes. The opportunity for our lending is also on our offline and also online, what we call open loop merchants. As you know, we have both Midtrans. Midtrans does cover payment processing for online merchants, such as IKEA.com, you know, UNIQLO and many others and many, you know, e-commerce platforms and, you know, digital platforms as well. We also have an offline capability to acquire payments for offline merchants. The products that we are building for consumer lending will eventually be for payments in this offline and online merchants as well.
Which means that you think about it as a, you know, it's like a credit card product. You can use your credit card product all across merchants who are accepted it, not just in a captive, closed loop platform. This is actually a very important key and one of the key differentiator because we are a payment platform that is actually quite holistic and not just focused to become the wallet for closed loop. Our open loop for offline and online, third party, merchants accept is also very high and actually an opportunity for us to expand this even further in a second way.
Thank you, Varun. Next question comes from the line of Ranjan Sharma from JP Morgan. Your line is now open. Please unmute your microphone to ask your questions.
Good evening. Thank you for the presentation. Two questions from my side. Firstly, I mean, if I adjust for the Tokopedia GMV we talked about, the GMV is still down like 70% versus Q4. I know there's going to be some seasonality, but it's still like GMV is declining. If you can share more color around the nature of GMV, which is which GoTo is shedding. Secondly, if let's say the GMV remains under pressure in the next few quarters, and not just the second quarter, will it be possible for GoTo to increase e-commerce take rates? Thank you.
Jacky, can you actually, maybe answer the question on the numbers first, and then maybe I can give additional color on seasonality.
Yeah, sure. I think for e-commerce, we, you talk about GTV was down about 3.6%, right? If you exclude the impact from Midtrans Tokopedia, it was mostly flat, the year on year, quarter on quarter. Year on year, sorry. That was like attributable to like lapping last year's Omicron obviously, and also our decisions to like focus on the high quality users. All this actually resulted in the negative GTV growth. I think if you strip out Midtrans Tokopedia, I think mostly it will be flat. We expect like there will be continuous moderation in Q2 because of the continuous lapping from last year's COVID wave.
Also our focus on profitability in the first half. I think heading to the second half, we do expect there will be gradually recovering in terms of top-line growth for e-commerce.
I think just generally, additional data point as mentioned, I think Q1 definitely from a seasonality perspective is weaker because Q4 is a festive combined with a lot of different holidays and towards the end of the year. Obviously, the impact on Hari Raya or Idul Fitri happens in April. This is actually more going to be seen in Q2 instead of Q1. In addition to that, I think we also have to acknowledge that, you know, a lot of the changes we've made in terms of de-incentivization and stuff did have a shock in the system.
You know, obviously, as discussed, there are users who are low quality in our opinion, that actually got weed out the system. That actually resulted in some of the kind of a pressure that you mentioned, Ranjan. Again, this is actually a conscious decision in a sense that, you know, without this we didn't recalibrate our the way that we actually optimize. In the past, because of the high competitiveness in the commerce platform, a lot of platforms tend to actually double, triple stack their subsidy offering. A user can actually get free delivery plus cashback, plus, you know, something else, which is definitely is actually really, really heavy.
It's actually not gonna be able to actually create a positive unit economics product. A lot of these changes have been made and the market is also equally as rational. Therefore, what we've seen in this, in this Q1 is also a bit of a shock in the system. There are a lot of the adjustments being made obviously by the multiple platforms as well. As mentioned, we are quite confident in being able to actually really focus on growing again because now the levers is much clearer. The control on the critical cost is very important. It is very complex in execution, yes.
As company needs to grow up that they couldn't rely on like this, you know, kind of ethereal kind of metrics anymore that this is actually the time to differentiate who can actually do it and who cannot. That actually determine who are able to actually get the capture growth going forward. To your question about because of the pressure and potential growth and so forth, is it possible to increase the take rates? Yes, because of the reasons. Number one, you know, despite that, you know, maybe transactional GTV is a little bit moderated, but I think the value of C2C e-commerce platform is also becoming a discovery base.
A lot of merchants actually spend ads dollar to capture a lot of the intent to engage. That's, that's how ads product became quite successful in our part of the equation. The volume of the visits and also the throughput, the first funnel continues to be strong. The session become more and more high quality and then better engaging in terms of conversion rate as well. That's why from an ads revenue, it continues to actually generate higher and higher growth as well in our system. That this continue to be our investment. One of the key values to increase in terms of take rate is on ads.
Having said that, I also still believe that Indonesia compared to many peers in different countries or from a C2C marketplace take rate, it still remains to be on the lower side, in terms of take rate. Yes, there is an opportunity. As, as mentioned, every year we see a lot of it, that opportunity and review, whether we can actually do another one. You know, this is, this obviously will be done on a yearly and year basis. Something that we will continue to actually explore and evaluate.
Thank you, Ranjan. Our last question comes from the line of Reena Bhasin from Deutsche Bank. Your line is now open. Please unmute your microphone to ask your questions.
Yes. Hi. Thank you for the call. Can you hear me?
Yes, we can. We can hear you, Reena.
Thank you. Just a couple of quick questions. One is, Jacky mentioned that, you know, GMV growth should start to look better as we move beyond the second quarter. Is there any kind of basis to that? You know, are you just talking in seasonal terms or are you talking year-on-year please? My second question is about your corporate cost. You know, just from the standpoint of you having most of your operations in a single country, they just seem to be very high. You know, if you could comment why such a large cost base seems justified. The third question is on the spin-off of your segment into logistics as a separate one. I'm sorry, you've talked about it in Q4 and this quarter.
It's not clear to me what the rationale is. Aren't all companies in your space having the same kind of supply chain? You know, what really is driving you to kind of make segment disclosures separately?
Jacky, can you probably take the first question?
Yeah, I'll take the first two questions and, yeah, Andre, you can have the last one. Rina, I think when we talk about the GMV or GDV recovery in the second half, it's more on a QoQ sequential in that sense. But, I mean, like I said, we don't provide like a full year top line guidance right now or by quarter. But when I guess that comment is more on a sequential quarter-to-quarter improvement. And then on your comment on corporate costs, if you look at the actual cash corporate cost is about IDR 310 billion. Of our total cash OpEx, that's 14%.
From our perspective, it's actually given we are a public company as well. Obviously we continue to be very disciplined to identify like additional savings opportunities. Like we have been consolidating all these different supporting functions, you know. Also we are leveraging like the IT side to be more efficient. Hopefully that's gonna give us some additional upside, the cost optimization. Overall, like cash OpEx at the corporate level is only about 14% of the total. Yeah.
Yeah. I wanna add on. I think whenever we speak about seems to be very high. Ideally, you know, if you can provide what do you compare that against? I think a lot of the color is important to understand our peers who for the corporate costs, as Jack mentioned, [audio distorted] . By the way, that's not just people, because there's actually multiple other costs, including our professional fees, our payments to auditors, et cetera, et cetera. I think rental, like office and stuff that is inc in that as well. It's actually fully baked in, not just on personnel. I think 14% is like 70% of corporate costs in some of our peers.
Again, you know, it's let's be very, very precise in like the comparison so that we're not trying to debate on something that is much more objective, if you may. But happy to actually pin maybe this earnings call on some of your observation here. On the last question on GTL spin. Well, the spin-off decision is clear, but the reason why it becomes a reporting is 'cause of the auditor. Well, I mean, it's, it is by compliance that a certain segment that is above a certain percentage needs to be reported as a separate segment. Because the size of the assets and the revenue that we have to disclose the earnings, as a, you know, its own separate segment.
Thank you, Rina. With that, we have reached the end of the question and answer session, and we conclude our conference call for today. Thank you for participating. You may all.