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Here’s what you should know today:

1. Baidu partners with PayPal for mobile wallet service

PayPal is expanding its presence on mobile by pairing up with Baidu, allowing the Chinese company’s 100 million users to make payment to PayPal’s 17 million merchants.

The news is the latest in a series of partnership from PayPal after integrating with Apple and Samsung Pay, as well with banks Citi and Chase.

For Baidu, the partnership offers a way to increase the odd in their favor on the competition in China’s mobile wallet landscape that currently dominated by Alibaba’s Alipay and Tencent’s WeChatPay.

Read the full story here

2. Whatsapp hits 1 billion daily users, Whatsapp Status has more users than Snapchat

Chat messengers app Whatsapp records 1 billion daily users as revealed during the Q2 2017 Facebook Earning calls. The company only has 350 million daily users when it was acquired by Facebook in 2014.

Facebook has also successfully rolling out Snapchat’s Stories format to a much wider audience than the original inventor.

Instagram Story and Whatsapp Status are each used by 250 million people every day, meanwhile Snapchat only has 166 million daily users on its app. Facebook itself records 2 billion monthly users.

Read the full story here.

3. Snapdeal to sell its digital payment platform FreeCharge to Axis Bank

After accepting the buyout from Flipkart for $950 million, Snapdeal is also selling its digital payment platforms FreeCharge to Axis Bank for $60 million.

Axis Bank will have access to FreeCharge’s base of over 50 million mobile wallet users, its staff of about 150 – 200 and its resources and proprietary tech.

FreeCharge was first acquired by Snapdeal in 2015. The deal was reportedly worth about $400 million.

Read the full story here.

Mobile payment apps, widely known as mobile wallets, hold digital information about credit and debit cards for making payments, store coupons and loyalty programs.

And they’re projected to become a $300 billion industry by 2022 in the US. Market research firm Park Associates estimates that proximity payment transactions, which require users to tap their phone at a point-of-sale station, generated more than $30 billion in the US last year alone.

The following are a few examples of companies properly utilizing their own mobile payments apps:

One player that stands out is global coffee chain Starbucks.

Currently 2X as many consumers use Starbuck’s mobile app as Apple Pay, according to Park Associates.

Other brands such as New York based Fresh & Co, a grab and go cafe chain, have been using mobile wallets since 2014 and currently has 30,000 customers paying for their sandwiches via the company’s own mobile app.

US drugstore chain CVS also operates a successful mobile payments app by incorporating its ExtraCare rewards program. Users don’t have to produce a rewards card to earn points at the cash register, they’re transferred directly to the app.

Users can also manage multiple prescriptions and medication refills on the app.

But not all mobile wallets are providing a good return. Walmart’s mobile payment app, Walmart Pay, can serve as a cautionary tale for retailers looking to launch digital wallets. The app is reportedly underperforming, due to the absence of a loyalty rewards scheme for users.

Overall, there is a quick and widespread adoption of mobile payments in the US and has largely attributed to the rise of ecommerce – currently 11% of retail sales in the country.

Looking east, brands and retailers in Southeast Asia can also leverage mobile wallets, especially as the adoption of the smartphone among the population grows. A problem arises when considering approximately 74% of Thai shoppers prefer to pay for online shopping via cash or bank transfers and is also the case in Indonesia and the Philippines. This is because only 27% of the entire region has a bank account let alone a credit card to pair with a mobile wallet, but there are a few ways around this.  

Businesses can allow consumers to top-up their mobile wallets at the store counter using cash like Starbucks already offers as an option. Points collected in the app could also be used like a digital currency to purchase goods. All would nurture the adoption of digital payments in the developing region – a large obstacle in the growth of online retail.

Ecommerce giant Amazon is tackling the unbanked population in the US through its Amazon Cash initiative that allows users to top-up their Amazon cards with cash at selected brick and mortar stores, such as drug store CVS, across the country.

The appeal of mobile payment apps for consumers

Building a mobile payments app may be expensive, at least $20,000, but it will introduce customers to the built-in loyalty programs, which will incentivize them to return to collect more points through purchases in a positive feedback loop.

In some cases, it has been found that loyalty programs can work in tandem with increasing brand awareness i.e. if a consumer shares a product with 20 friends, they get 20% off their next purchase.

“Across the board, consumer satisfaction is about 80%for mobile wallets,” says Chris Tweedt, mobile-payments analyst at Parks Associates.

Marketing tactics like this would work in Southeast Asia as consumers are both mobile and social media driven.

In the US, merchants also see a 7-9% larger basket size when customers pay with a mobile wallet and businesses see an additional 9% spike in average sales when customers show up to redeem loyalty incentives. The added convenience makes on the whim-shopping much easier.

With a brand’s own payments wallet, they can dictate what payment types to accept, such as Alipay or Samsung Pay, but they need to be widespread and so far the region doesn’t have a dominant player yet, which becomes the greatest barrier to its adoption.

It’s also important to keep in mind that retailers using third party wallets such as Apple Pay or Alipay have to pay processing fees for each purchase, typically 2-3% for credit cards and less than 1% for debit cards according to Amittabh Malhotra, CMO of digital commerce platform OmnyPay.

Taking the next steps

Businesses in developing markets can start small as more payments players come onto the scene by opening a point program first to build engagement if a mobile wallet seems out of reach.

The long-awaited entry of China’s dominant payments platform Alipay in Southeast Asia through deals with Thailand’s TrueMoney and Indonesia’s Emtek, owner of Blackberry, should encourage the mobile wallet ecosystem as brands can then integrate more digital payment options into their platforms.

Another players to look out for is the Thai government’s online payment platform PromptPay that has signed millions so far and could be huge if advertised properly to the cautious Thai people.

Starbucks in Thailand is moving quickly in the game. The coffee chain already has a Starbucks Thailand app that allows users to scan and pay through collected loyalty rewards and locate the nearest branch. A mobile wallet is about convenience – it’s not only about payment – and only a few businesses are getting it right.

The $300 Billion Trend Your Company Needs to Get in on Now was originally published by Inc. Read the original article here.

Here’s what you should know today.

 

1. PayPal partners with Android Pay for in-store payments push

PayPal has entered a partnership with Google’s Android Pay to further expand PayPal’s presence in offline stores.

The partnership will allow US customers to use PayPal as a payment method within Android Pay wherever Android Pay is accepted, be it in-store, in-app, or online.

The deal is hoped to extend the company’s reach amid a crowded mobile wallet landscape. PayPal processed $102 billion in mobile payment volume and two billion mobile transactions in the last year.

PayPal has made a series of a deal over the last year aimed at giving its mobile wallet more exposure. Most recently with Discover that gave PayPal access to their tokenization services. Similar partnerships have been made with Visa and Mastercard.

Read the rest of the story here.

2. Deliveree Thailand expects to break even this year

Bangkok-based on-demand delivery service app, Deliveree, is expecting to break even this year, as stated by Country Director Chanisa Rueangkirianya.

“Our Bangkok operation is on the right track to break even by year-end, helped by our cost efficiency and business development strategies,”

The growth is fueled by the growing ecommerce retail market and greater demand for fast delivery services. The company also wrapping up its series A funding this year.

Deliveree also has a presence in Jakarta and Manila. The app has been downloaded more than 200,000 times, while the company boasts 9,000 drivers in its transport network.

Read the rest of the story here.

3. Ant Financial announces merger with Lazada’s HelloPay Group

Alibaba’s financial affiliate, Ant Financial announced today that it merged with HelloPay Group, Lazada’s online payment platform.

The deal came one year after Alibaba purchased $1 billion of a controlling stake in Lazada, currently the largest online marketplace in Southeast Asia.

Following the merger, HelloPay will be rebranded as Ant Financial’s online and mobile payment solution, Alipay. All of HelloPay’s features and services, however, will remain unchanged.

Read the rest of the story here.

Thailand’s startup media outlet Techsauce published two detailed reports this month; Investor Guide Q1 2017: Thailand Tech Startup Report and its annual Southeast Asia’s Top 75 Fintech Startups Report. What were the key takeaways to know about Thailand’s startup ecosystem and Southeast Asia’s tech investment landscape? We take a look at both reports:

How did Thailand startups do in terms of funding?

An introduction to Thailand

Total funding figure in Thailand is getting bigger – no less than $85.2 million as seen in the chart below. The exact number can’t be pinpointed as there were several undisclosed Series B investments.

Notable funding mentions: 

  • E-book platform Ookbee raised $19 million from Chinese giant Tencent to create a digital content ecosystem in Thailand
  • Fintech startup Omise raised $17.5 million led by Japanese firm SBI Investment
  • Ecommerce marketplace Orami (now Moxy) raised $15 million from Facebook’s Eduardo Saverin B Capital
  • 3 food tech deals were made in 2016. At the beginning of 2017, B2B food supplier platform Freshket has raised an undisclosed six digit funding round
  • Corporate Venture Capital was a trend in 2016 that saw numerous corporations shift focus to technology and innovation as both direct investors and limited partners. This trend is expected to continue well into 2017 with the emergence of property tech in Thailand, pioneered by real estate giant Sansiri

In the graph below, you can see that the number of funded startups has shot from 3 to 75 in only four years. The number of active angel investors and the number of VCs have also grown in tandem.

Data from the report also shows that ecommerce still remains the top category for investors and increased steadily on a year-to-year basis. The second category is logistics with funding raised by aCommerce, Giztix and more.

 

Only two months into 2017, and already eight startups have already raised funding this year.

The diversity of Thai startups attracting investors show that there is more room for verticals such as education tech (edtech) and travel tech.

The report also predicts that by Q2 2017, there should be more funding given to a variety of startups in different sectors and investment opportunities in Thailand’s ecommerce landscape.

Southeast Asia’s top fintech trends

  • While core technologies such as blockchain and AI have gotten a lot of publicity, startups that can realistically develop it or utilize it are still limited but extremely attractive to investors
  • Each country in this report is making moves to launch regulatory fintech sandboxes to test out financial technology framework – Indonesia, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.
  • Many fintech firms in the region have mandates to work with banks and regulators, which means expanding beyond their domestic market may be a challenge
  • The entry of Alibaba’s financial arm, Ant Financial, into the region has caused startups that offer similar services to quickly adapt or risk getting squeezed out

Fintech players by country

The image above shows that Singapore is well ahead of other countries in terms of number of fintech companies with 31 players, followed by Thailand with 14 players. More doesn’t necessarily mean better, it will be time until one emerges.

With each country taking initiative to become less cash dependent, for example, Thailand government’s PromptPay initiative, this will be a continued trend into Q2 of 2017.

Insurance technology is still a minority but with Thailand’s Asia Insurance introducing online insurance packages and companies such as AXA and FWD offering online insurance in Singapore, the space is growing.

Financial technology in Southeast Asia is still growing and must in a region where only 27% of the population has a bank account. That leaves around 438 million people unbanked and endless opportunities for fintech firms to bridge the gap that traditional financial institutions are struggling to fill.

2017 is already shaping up to be another year of startup growth in Thailand but investors will be more strategic with their money. As fintech matures, it can only nurture the growth of online transactions.

The original reports from Techsauce can be found here and here.

Here are today’s top ecommerce headlines.

1. iCommerce expands to Indonesia with pre-series A funding

Singapore-based ecommerce enabling startup iCommerce Asia announced today it has raised US$1.4 million in a pre-series A round. Nine-month-old iCommerce provides a full range of services relevant to ecommerce. It handles operations like warehouse and order management, cross-border customs clearance, and reverse logistics, as well as tech services like web and mobile development.

Its unique proposition is enabling smaller ecommerce and retail businesses in the region to export goods into Indonesia, giving them access to its promising customer base.

Read the rest of the story here

 

2. CIMB launches mobile wallet app for cashless payments

CIMB Bank Bhd has launched a lifestyle mobile application, CIMB Pay that provides combine secure cashless payments with deals and offers.

With Masterpass, shoppers will be able to use their CIMB Mastercard debit or credit card along with the shipping information saved on the mobile app to complete online transactions. Customers can make payments by simply tapping their phone on any contactless terminal based on Near Field Communication technology. The app also has an in-built notification system that alerts customers on nearby contactless terminals and flash deals.

Read the rest of the story here

 

3. Hong Kong’s Easyship raises pre-series A to expand to Singapore

Hong Kong-based logistics startup Easyship has raised an undisclosed amount of pre-series A funding from 500 Durians. The startup will be expanding into Southeast Asia via Singapore, following the validation of its business model and building of traction in the Hong Kong market.

The expansion to Singapore provides strategic access to Southeast Asia and leverages off the city-state’s logistics infrastructure and networks.

Read the rest of the story here

Interested to learn more about Asia’s logistics landscape? Check out our series on Alibaba’s Cainiao Network here: part I, part II, part III, part IV.

 

Want a distraction from the latest Presidential debate? Read the latest ecommerce headlines here.

 

1. Thailand’s PayAll targets 2017 overseas expansion

Actor ‘Film Rattapoom’s mobile wallet and e-payments are looking at expansion in Cambodia and Laos in a move to infiltrate Southeast Asia. Read the rest of the story here.

 

2. Singapore’s Apps Authority wants to help young ecommerce companies gain a competitive edge

To help this pain-point, Singapore-based Apps Authority has launched a cloud-based e-commerce software to offer traditional retailers the tools they need to draw customers and make their products known online. Read the rest of the story here.

 

3. Hiip uses algorithms to match brands with the right social media influencers

Vietnam based app uses social data and algorithms to match brands and advertisers with the right influencers. Recent funding will be used to expand into other markets. Read the rest of the story here.