Cosmetics and healthcare manufacturer from China, Longrich Bioscience, is eyeing the ecommerce market in Indonesia as reported by Bisnis.com. The company feels optimistic about its venture in the country as it sets a monthly target of $300,000 sales per month by 2017 and $1 million of sales per month in the next five years.

Longrich International President, Charlie Chin said that the company is confident with its target as the economy in Indonesia is getting stronger and people’s purchasing power in the country will continue to increase.

The company is not alone in their opinion, back in June, Chinese investors have also expressed their confidence in Indonesia’s future business outlook.

Longrich eyes markets beyond Java

Longrich has been operating in Indonesia since 2013 and has seen a positive growth in the last 1.5 years. General Manager of Longrich Indonesia, Thamrin Slamet claimed that the sales growth has reached 120%.

In addition to producing its own line of products, the manufacturer also serves other brands such as GlaxoSmithKline (GSK) who owns the toothpaste brand Sensodyne.

Indonesian big cities like Jakarta and Surabaya are the main markets for Longrich’s variety of products but the company will not only focus on Java, Indonesia’s most populous island. It has a business center in Medan, North Sumatera. It also serves the people in Palembang and big cities in eastern Indonesia.

Globally, Longrich is present in 15 countries and recorded $167 million in revenue globally in 2015.

A version of this appeared in Bisnis.com on August 14. Read the full article in Bahasa here.

4PX Express has grown into China’s biggest cross border ecommerce platform, reports Singapore Straits Times.

The logistics platform helps merchants such as AliExpress, TaoBao, eBay and Newegg to get their goods delivered to customers across the world.

In terms of scale, 4PX is twice the size of the #2 and #3 players in China combined.

As China’s ecommerce boom spreads to other parts of the world, outbound volumes have spiked over the last two years, with 4PX founder Kevin Li predicting that the market will grow at least 80% each year for the next few years.

Approximately 40% of shipments handled by 4PX are bound for shoppers in the United States, Russia and followed by Brazil. Shoppers in the UK, Germany, Spain and France count for another 40-45% of overseas shipments.

As Li puts bluntly, “the world economy is not good, but foreigners like online shopping.”

4PX turns an annual profit of approximately $101.1 million (50 million yuan) and employs 3,500 people across 50 centers in China and 17 overseas.

As the items sold by Chinese sellers grow in value, the company plans to expand its network of overseas warehouses, where sellers’ inventory is sorted, packed, consolidated and shipped out. It also aims to be the biggest Chinese employer in the Czech Republic, with a promise to add 600 jobs over five years as it serves Western Europe with a warehouse there.

4PX’s big name investors 

The company closed its latest investment round last month, with Alibaba’s logistics arm Cainiao injecting an undisclosed sum into the firm for a 15% stake.

SingPost is an early investor, with roughly 30% share in the company. The partnership goes back to 2008, when 4PX first identified opportunities in cross border ecommerce. During that time, online sales were booming, but the parcel service industry lagged behind.

The sellers were new, they didn’t know how to sell and choose a logistics company. DHL and FedEx did professional fulfillment but were focused on the business-to-business segment. – Kevin Li, Founder of 4PX Express

From that, 4PX started to build a complete product line for parcel services, and SingPost became its first postal partner outside of China. Small parcels from China would be routed to Singapore and sent out to various countries across the world from there.

Li expects his company’s margins to fall as the ecommerce sector matures, but this shouldn’t be a cause for concern. “We are an integrator of different firms’ solutions. We exist because of our technology”.

A version of this appeared in The Straits Times on August 14. Read the full version here.

JD.com, Alibaba’s ecommerce rival in China, is targeting profitability after reporting its Q2 2016 earnings, reports Tech Crunch. The earnings were on target with expectations, but saw revenue growth continue to flatten.

JD.com was made a Fortune 500 company in June, and is posting rising revenues. According to Tech Crunch, JD.com’s growth rate is slowing in line with recent media headlines that suggests China’s economy is slowing down.

 The company’s rate of growth is slowing in line with reports in the media that Chinese consumers are spending less as the economy slows, but more consumers are moving online.

This is impacting companies across the board and placing a larger emphasis on overseas growth. JD.com is currently courting global brands with intentions to reach Chinese consumers through its online platform.

JD.com announced net revenue of $9.8 bn for the three-month period, down to 42% y-o-y from 47.3% last quarter.

The company is predicting that the next quarter will continue to see slowing growth.

JD.com, which has over 100,000 merchants on its platform, and a 79% order rate from mobile, has stated that it was making a push to become profitable. It posted a net loss of $19.9 million for Q2, which is a big improvement from the $76.8 million loss in the previous year.

GMV, the total amount of sales on its platform grew 47% to reach $24.1 bn in Q2 2016.

JD Q2 Earnings, JD.com Q2 Report 2016

Source: JD.com

Although up from $19 billion in the previous quarter, the rate of growth is slowing. GMV in Q1 was up 55% annually, compared to the reported 47% growth for this quarter.

“With our reputation for high-quality online shopping and same-day delivery already cemented with Chinese consumers, we are taking steps to further extend that advantage through efforts like our new strategic alliance with Walmart and Chinese online supermarket Yihaodian,” said Richard Liu, JD.com CEO.

JD.com’s move to acquire Yihaodian (Walmart’s Chinese ecommerce business) in June will boost the company’s grocery and delivery business.

A version of this appeared in Tech Crunch on Aug 10. Read the full version here or find the official JD report here.

Hypermarket operator Sun Art Retail Group Ltd said on Thursday it plans to invest $150.6 million (1 billion RMB) in ecommerce development over the next two years, reports Reuters

The joint venture between Taiwanese conglomerate Ruentex Group and French retailer Groupe Auchan SA said net profit was $211.11 million (1.43 billion yuan) in January to June, down from 1.47 billion yuan profit in the first half of 2015.

Sun Art’s first-quarter profit was 1.03 billion yuan.

“The competitive environment of retail industry is driven by the rapid growth in ecommerce while retail market consolidation is still challenging,” it said in a filing to the Hong Kong bourse.

In February, it said it would scale back on new store openings in the mainland this year as it grapples with a challenging retail environment, while it expects a greater contribution to sales from ecommerce.

Executive director Peter Huang, speaking at an earnings briefing, also said he expects the company’s ecommerce business to break even in 2020-2021.

A version of this appeared in Reuters on August 10. Read the full version here.

Alibaba saw record growth in Q2 2016 as the company’s Chinese retail marketplaces surged and revenue from its users on mobile overtook that of desktops for the first time.

The ecommerce giant reported revenue of $4.8 billion (RMB 32.2 billion), which is a 59% increase year-on-year — the highest growth since Alibaba went public in September 2014 in the largest US IPO in history.

While revenue growth was undoubtedly the highlight for Alibaba executives, the company’s net income dropped 76% year-on-year to $1.1 billion. Alibaba did note that non-GAAP net income increased 28% over the same period, while operating profit rose 71%.

Alibaba broke out increased financial data — including revenue and profit/loss — for business units like such as digital media, cloud computing, food delivery and more for the first time in response to recent FCC investigation of its accounting of affiliates like logistics firm Cainao, and Youku, Tudou.

Highlights of Alibaba Q2 results

The company’s China marketplaces pulled in total sales of $3.5 billion (RMB 23.4 billion), 49% higher than the same time last year.

75% of revenue came from mobile devices — $2.6 billion (RMB 17.5 billion) — up 119% year-over-year.

Alibaba-financial-summary-results-2016
From the official press release,

China retail marketplaces had 434 million annual active buyers in the 12 months ended June 30, 2016, compared to 423 million in the 12 months ended March 31, 2016.

Alibaba’s affiliates are burning cash — per the chart below — but Alibaba is betting that they will supplement its core business in the future.

alibaba revenue q2 2016

“We’re starting to serve local consumers in Southeast Asia, a market with over 500 million potential consumers,”Alibaba Vice President Joe Tsai said. “That’s going to be a very important potential market for us.”


A version of this appeared in TechCrunch on Aug 11. Read the full article here or the full press release here.

Iconic camera brand Leica is the latest in a series of high end brands to venture into China’s online landscape, reports Alizila.

Leica announced that it had opened a store on Tmall.com, the online marketplace Alibaba Group Holding Ltd. operates. The marketplace caters to larger brands, and charges listing fees as well as gives brand owners their own storefronts.

The Leica store on Tmall offers a variety of 50 products, including some exclusives not available generally in China. Leica also plans to introduce special edition products for Tmall’s consumers, according to a statement from Leica China.

Leica will manage the Tmall store itself. Leica’s cameras are currently also selling on JD.com , Alibaba’s biggest Chinese competitor. 

Brands such as Leica are catering to the growing number of middle class Chinese consumers who covet foreign goods. There are currently 523 million Chinese consumers with middle class income, according to McKinsey & Co.

JD.com is also working with a growing number of overseas brands, including Japanese brands such as Tiger and Nishikawa Sangyo, selling through their own brand stores on JD.com. The Alibaba competitor has 170 million active users, the marketplace claims 209 warehouses in China.

By offering premium global brands such as Leica a place on the online marketplace, they are able to test out the local Chinese market without heavily investing in curating their own website and last mile functions.

A version of this appeared in Alizila on August  9. Read the full version here.