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Here’s what you need to know today.

1. Alibaba makes its move in Indonesia, partners Emtek on mobile payments

Alibaba’s Ant Financial has locked in a partnership with Indonesian media conglomerate Emtek. Together, they’ll launch a new mobile payments product as well as other financial services.

The payments solution will be offered on Blackberry Messenger (BBM), which is operated by an Emtek subsidiary and has 63 million monthly active users in Indonesia. 

Emtek is turning BBM into much more than just a chat app. It allows people to shop, play games, watch videos, and more.

Read the rest of the story here

2. Amazon gets a wallet license in India

Amazon India has received permission to run a wallet license in India, becoming one of the 84 companies authorised by the Reserve Bank of India to operate payment licenses.

The wallet will probably be linked to Amazon Pay, which Amazon introduced in India last December, although then it was seen as a rebranding of its gift cards business.

A one-click payment option doesn’t work in India without a wallet

Amazon also offers customers faster refunds with Amazon Pay, within 24 hours. Storing money in the wallet will help Amazon ensure that the money is spend on Amazon directly, and also allows it to offer cashbacks on purchases to wallets.

Read the rest of the story here.

 

3. Recommended Reading: Closing shop on China’s online platforms

The online store closures of a number of retail and luxury brand giants indicate that the competition is no less fierce online.

The closure of Lotte’s Tmall store seems to have stemmed from the fact that China is Lotte’s only international market where growth is stymying. Sales fell during the last three months of 2016, year-on-year. ASOS, the UK’s largest online fashion retailer, entered China in 2013 with high expectations but announced its closure in April 2016 due to a running loss of 4 million GBP.

Companies looking to take advantage of China’s market size and sell to Chinese consumers often mistakenly believe that ecommerce offers a shortcut to success because there are fewer licensing requirements to operate through ecommerce, and customs clearance is faster.

However, as high-profile store closures in 2016 demonstrate, ecommerce requires extensive pre-entry knowledge of regulations, a realistic logistics plan, and a local marketing strategy.

Read the rest of the story here.

Here’s what you know.

1. WhatsApp will reportedly launch peer-to-peer payments in India within 6 months

WhatsApp plans to use UPI, a cross-bank payment system backed by the government, to begin enable payments between users within the next six months.

“India is an important country for WhatsApp, and we’re understanding how we can contribute more to the vision of Digital India. We’re exploring how we might work with companies that share this vision and continuing to listen closely to feedback from our users,” WhatsApp said in a statement.

Credit card penetration is low in India, while WhatsApp has already emerged as a platform for facilitating ecommerce despite currently offering no features that expressly support that.

Read the rest of the story here.

 

2. QBO innovation hub will provide resources to enable Philippines startups

QBO is a partnership between tech startup accelerator Ideaspace, J.P. Morgan Chase Foundation, and the Philippines government’s Department of Trade and Industry and Department of Science and Technology, with the aim to help grow the startup ecosystem in the country.

Two of the biggest challenges that Philippines startups face are securing funding and dealing with rigid government regulatory policies.

QBO aims to remove these barriers by being conduit between startups and private and government entities that can provide resources.

Read the rest of the story here.

 

 3. Recommended Reading: will Snapchat’s data play help fend off competition from Facebook and Instagram?

One month after its IPO, the messaging app’s execs are doggedly focused on broadening Snapchat’s appeal to brands—notably direct response-minded companies.

Snapchat needs to mine data about millennials more effectively to beat Facebook and Instagram.

Millennial marketers will be able to zero in on Snapchat users who are most likely to download their brand’s app, targeting slivers or swaths of the platform’s 160 million users who have shown interest in either the brand or the functionality it’s offering.

Read the rest of the story here.

Here’s what you should know today.

1. Lalamove partners with point accumulation app ChomChob 

on-demand delivery startup Lalamove has partnered up with ChomCHOB, a point accumulation app that converts a customer’s credit and debit card points into reward points. The app allows users to purchase a range of products and services from over 1000 merchants.

ChomCHOB points can be redeemed through Lalamove motorbike on-demand services from now until the end of April.

Read the rest of the story here.

 

2. Alibaba makes investment in AR for cars startup

Alibaba led an $18 million series B round for WayRay, a Switzerland-based startup specializing in augmented reality products for cars, such as its AR navigation system that overlays directions onto the car’s windshield.

Each car has a windshield and inside windows. These surfaces could be used as augmented reality displays and content could be placed anywhere in the car.

WayRay will also partner with Banma Technologies, a joint venture by Alibaba and SAIC, one of China’s largest automakers. The startup is building an AR interface for one of Banma’s 2018 models, capable of displaying driving assistant notifications and navigation information.

Read the rest of the story here.

 

3. Recommended Reading: India’s ecommerce groups take on Amazon and Alibaba

Since launching its Indian operation in 2013, Amazon has enjoyed rapid market share gains at the expense of local leaders Flipkart and Snapdeal, with each of the three burning through tens of millions of dollars a month as competition intensified.

These deep pockets could prove crucial in the long and expensive war for the Indian digital consumer. “It’s not about who’s got the biggest business right now. It’s about who’s willing to invest the most money in making this happen,” says Kashyap Deorah, technology entrepreneur during an interview with the Financial Times.

Read the rest of the story here.

Here’s what you should know before the weekend starts.

1. Alibaba raises stake in India’s crowded ecommerce market

Alibaba is leading a $200 million funding round in India’s Paytm to give it a controlling stake of 60% percent in the mobile shopping and payments app.

The funding is for Paytm’s ecommerce business, which the startup decided to split from its payments unit last year. It puts Alibaba closer to a formal entry into India’s burgeoning ecommerce market to combat market leaders Flipkart and Amazon. A clear indicator that Alibaba is intending to compete for market share.

Trouble for India’s incumbents? Alibaba’s investment in Paytm can pose trouble for local players Flipkart and Snapdeal. Both have been struggling to raise funds, with Flipkart’s valuation cut several times, and Snapdeal recently announced a 100% pay cut for its founders.

Read the rest of the story here.
 

2. Goldman Sachs: online shopping in China to double by 2020

Already the world’s largest, China’s online retailing market will grow to $1.7 trillion by 2020 compared with $750 billion last year. Perhaps more important to continuing growth is Goldman’s expectation that 200 million new Chinese shoppers will come online by 2020.

The biggest opportunity is the expansion of online sales of FMCG items such as groceries, personal care and healthcare, packaged foods and other everyday items typically found in supermarkets.

Tmall is also expected to control 70% of China’s online B2C market by 2020

Read the rest of the story here.

 

3. Insights: Target to overhaul stores and digital operations

Another reaction to the Amazon effect?

Target unveiled a series of initiatives designed to reverse the big box retailer’s same-store sales declines, including an investment of more than $2 billion of capital in 2017 and more than $7 billion over the next three years. The company will use about $1 billion of operating profits this year to improve brick-and-mortar and digital operations.

Insights from Retail Dive

“Target just took longer to feel the ‘Amazon digital effect’ than Best Buy, due to the categories and customer base they play within. Amazon initially went after books (successfully destroying physical book retailers), and then went onto CE and office supplies, and now are expanding into food and apparel,” said Matt Sargent, Senior Vice President of Retail at Frank N. Magid Associates, Inc.

The retailer should return to their legacy ability to differentiate with exclusive, affordable ‘fresh’ product offerings coupled with clean & easy shopper experiences.

Read the rest of the story here.

 

The Flipkart deal to acquire Jabong was completed in only three days, reports Tech In Asia.

The race was on because Jabong was in the late stages of talks with Flipkart arch-rival Snapdeal.

Flipkart moved quickly to steal Jabong from Snapdeal, who desperately wanted to gain market share in the fashion ecommerce segment.

“Generally, a deal of this size takes three to six months from due diligence to closure. Wrapping it up in 72 hours was a challenge,” comments Vinay Joy, Associate partner at Khaitan & Co.

In the case of Flipkart and Jabong, Vinay and his team understood the risks and proceeded with documentation on all levels. It’s possible that the Jabong team was already in the process to provide the due diligence documents to other parties interested in buying it.

An agreement can be worked upon and signed within three days but a legal and financial due diligence of a company already mixed in controversies is not possible within that time frame.

Jabong murky history

Jabong’s prime backer was Rocket Internet. The stake was later sold to Global Fashion Group, in which the latter owns a stake, along with lead investor Kinnevik AB. Rocket Internet was unhappy with the fact that GoJavas, a logistics company incubated inside Jabong and now a separate company valued more than Jabong, has no shareholding in it.  This eventually led to an audit at Jabong.

We have a high bar when it comes to governance, regulations and compliance. Unless a company can clear that bar, we have issues. – Kunal Bahl, CEO of Snapdeal.

Out of all the mergers this year, the acquisition of Jabong is probably the most controversial, and far from being smooth. Flipkart’s lawyer will be conducting post-due diligence even after the deal is inked.

A version of this appeared in Tech In Asia on July 28. Read the full version here.

Amazon has launched its prime membership program in India, reports Tech in Asia.

This is considered a well calculated move following a series of steps to solve the delivery conundrum in what is a very disorganized market. There is a 60 day trial period for Amazon Prime, twice of the one month trial period offered in other countries. The introductory annual subscription fee is set at $7.40.

Membership benefits include fast and free delivery in 100 cities, and early access to deals. Amazon has also announced Prime Video, giving members access to movies and TV shows, will be coming soon to India.

Amazon Prime’s delivery holds the key to winning the ecommerce battle against local rivals Flipkart and Snapdeal.

Amazon Prime’s guaranteed one day delivery will become an every day experience instead of an occasional indulgence, and with no minimum purchases. Prime will provide unlimited convenience.

For sellers, Fulfillment by Amazon is now an even more powerful opportunity to rapidly grow their business.

Steps taken to preparing for Prime

It invested heavily in warehouses across India as Amazon recognizes the difficulties of a centralized system which it uses in other countries. The localization of warehouses has not only helped in reducing the cost and time for deliveries, it has also encouraged sellers to use the ‘Fulfillment by Amazon” option. There’s even a facility for picking up goods from the vendor.

Amazon Prime came in once the infrastructure could provide support.

When Amazon came to India three years ago, it had to restrict itself to a marketplace model, rather than an inventory-based ecommerce. The reason for this is because India has restrictions on foreign direct investment (FDI) in B2C ecommerce. By acting as a marketplace, Amazon ostensibly just connects third party sellers with buyers, with fulfillment services as an additional offering.

The government’s FDI restrictions were meant to protect the millions of small shopkeepers in India. However, Amazon is partnering with the local shops to ease its delivery hassles. This is especially a game-changer in tier-2 and tier-3 towns and rural India.

Amazon Prime’s entry into India shares a similar timeline with local competitor Flipkart’s acquisition of Rocket Internet’s Jabong.

A version of this appeared in Tech In Asia on July 27. Read the full version here.