Alibaba tipped to make major investment into Indonesia’s Tokopedia
BrandingFinancial ResultsMarketing 28/07/2017 Fri 19:31 in Indonesia by Vivienne Tay
Alibaba Group Holding is tipped to make a big investment into PT Tokopedia, one of Indonesia’s largest online marketplaces. This was according to a report by Bloomberg, which said that Alibaba is current looking to lead a funding round of nearly US$500 million.
If successful, the company will join the ranks of Sequioia Capital and SoftBank Group who are current investors. Marketing has reached out to Alibaba and Tokopedia for comment.
The move follows Alibaba Cloud’s plans to establish an international cloud data centre in Jakarta, which were announced in June this year. It currently anticipates opening the two new centres during the current fiscal year, ending on 31 March 2018. It also responds to Indonesia’s “1,000 Start-ups Movement” initiative launched last year.
It also follows Alibaba’s recent investments into Southeast Asia. In June, it invested an additional US$1 billion in Southeast Asian e-commerce company Lazada Group, increasing its stake in the company from 51% to approximately 83%. This was following its acquisition of Rocket Internet’s 9.1% stake in Lazada for US$137million in 2016, making it the controlling shareholder of the Southeast Asian online retailer.
Meanwhile in Malaysia, Alibaba was tipped to be setting up a regional distribution hub in Malaysia. This is according to sources close to Reuters. The distribution hub which would be located KLIA Aeropolis is expected to generate more than US$1.58 billion worth of domestic and foreign investments.
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Amazon steps deeper into Asia by introducing Prime Now delivery in Singapore
(Bloomberg)—Amazon.com Inc. is kicking off in Singapore with its most aggressive service yet, offering the Prime Now two-hour delivery service on everything from chilled Tiger beer to Samsung mobile phones.
Customers in Singapore can shop using the Prime Now app and get tens of thousands of items delivered to their door with free delivery on orders of more than S$40 ($29), according to Henry Low, director of Amazon Prime Now, Asia Pacific. Amazon is No. 1 in the Internet Retailer 2017 Top 500 and No. 4 in the Internet Retailer 2016 Asia 500.
Bloomberg News | Jun 29, 2017
Amazon’s entry into Southeast Asia could spark fierce competition with Alibaba Group Holding Ltd., which has acquired control of Lazada Group SA and is said to be considering an investment in Indonesia’s PT Tokopedia. The region of 620 million people is home to an e-commerce market forecast to reach $88 billion by 2025, according to a report by Google and Temasek Holdings Pte.
“Southeast Asia is a burgeoning marketplace for us with more than 600 million consumers, growing wealth and digitization,” Low said in an interview. “I’m super optimistic with opportunities that we have. This is day one.”
Bloomberg News | Jul 25, 2017
The U.S. e-commerce giant has been stepping up its overseas expansion. Having largely ceded China to Alibaba, the Seattle-based firm is waging a war of attrition with Flipkart Online Services Pvt in India (No. 76 in the Asia 500), where it has pledged to spend $5 billion in the next few years. In March, Amazon agreed to buy Dubai-based online retailer Souq.com.
Amazon will always evaluate deal opportunities, Low said, declining to comment on its road map for regional expansion.
“Together, Amazon and Alibaba are set to create an unprecedented disruptive force,” said Raghav Kapoor, an analyst at Smartkarma.
In Singapore, Amazon and its rivals are betting on the growth of online retail. E-commerce accounted for just 0.9% of the city-state’s retail market in 2003 before rising to 4.8% last year, according to data compiled by Euromonitor.
Amazon’s Prime Now service will be available for trial for free for a limited time in Singapore, before the company rolls out its Prime membership program, Low said. It’s the first time the service has been offered on debut in a new market. In other cities, it’s a prerequisite to be a Prime member to get the two-hour delivery service.
The company will also offer a one-hour expedited delivery service for S$9.99 per shipment.
Amazon’s Prime Now in Singapore will operate out of an urban fulfillment center, a facility of about 100,000 square feet, the company’s largest Prime Now only fulfillment center in the world, Low said. He added that the company plans to hire hundreds of people in Singapore as it expands services.
Alibaba Is Said in Talks for Stake in Indonesia's Tokopedia
Alibaba Group Holding Ltd. is in talks to make a major investment in Indonesia’s PT Tokopedia, people familiar with the matter said, potentially scoring a second deal to accelerate its expansion into Southeast Asia’s largest economy.
The Chinese company is in negotiations to lead a funding round in Indonesia’s largest online marketplace of up to $500 million, one of the people said, asking not to be identified because the deal is private. Alibaba, which already controls Lazada Group SA, would be joining existing backers SoftBank Group Corp. and Sequoia Capital if the financing goes through.
An alliance with Alibaba would likely preclude a deal with JD.com Inc., which was also in talks to invest hundreds of millions of dollars in Tokopedia, a person familiar with the matter told Bloomberg in May. Representatives for Alibaba and JD declined to comment. Tokopedia wasn’t immediately available for comment.
China’s largest tech firms such as Tencent Holdings Ltd. are accelerating their investments into Southeast Asia, the first step in concerted efforts to expand beyond their increasingly saturated home shores. Alibaba has been the most aggressive of its peers, setting up not just e-commerce operations but also digital payments networks in anticipation of Amazon.com Inc.’s eventual debut.
Alibaba shares were little changed in U.S. trading.
Read more: China’s Road to World Tech Domination Begins in Southeast Asia
Alibaba said in June it invested another $1 billion to raise its stake in Singapore-based Lazada to 83 percent, securing control of a fast-growing startup at the vanguard of its Southeast Asian expansion. Indonesia alone as an e-commerce market is expected to climb to $65 billion by 2020 from just $8 billion now, according to a report by Macquarie Research.
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Tokopedia was co-founded by William Tanuwijaya, the son of a factory worker, in 2009. The business model is similar to that of Alibaba’s Taobao emporium, matching customers with merchants instead of selling products from its own shelves. It raised a then-record $100 million funding round from SoftBank and Sequoia Capital in 2014, heralding Indonesia’s coming-of-age as a bona fide destination for technology investment.
Read more: Factory Worker’s Son on Path to Build $1 Billion Web Startup
— With assistance by Lulu Yilun Chen, and David Ramli
