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Here’s what you should know today.

1. China’s JD.com reportedly in talks to invest in Indonesian marketplace Tokopedia

JD is reportedly in early-stage negotiations to invest hundreds of millions of dollars in one of Indonesia’s largest online marketplaces.

JD’s potential investment may propel Jakarta-based Tokopedia past $1 billion in valuation

A successful deal with Tokopedia will take JD’s competition with Alibaba to Indonesia, an oil-rich country of 260 million that’s experiencing a surge in smartphone usage and middle class affluence.

Unlike Alibaba and fellow Chinese internet giant Tencent, JD has tended to grow its business organically, relying on its own networks of shippers and delivery-people to control quality and service.

Read the rest of the story here.

 

2. Singapore to help SMEs compete in the global marketplace

Finance Minister Heng Swee Keat’s Budget 2017 has placed a strong emphasis on helping businesses stay competitive and grow in an increasingly global marketplace.

The new Go Digital Programme is a government ‘leg up’ for SMEs and an exciting new addition to a series of strategies to strengthen small and medium-sized businesses in Singapore.

More than $80 million will be made available from the government to fund these initiatives.

Read the rest of the story here.

 

3. Recommended Reading: A complete guide to Alibaba’s cross-border payment solution: Alipay ePass program

Alibaba’s Alipay ePass payment program is one such tool and was once expected to be the solution to international luxury brands’ battle with counterfeiting issues and the rampant overseas daigou market.

Alibaba launched its Alipay ePass payment system with U.S. brands on their e-commerce platform, allowing Chinese shoppers to pay for products with Chinese currency through Alipay.

ePass was designed to bring more than just a payment solution. Alibaba’s cross-border payment system also helps brands with logistics and marketing issues.

Merchants that join ePass also have access to Alibaba’s global logistics network.

Read the rest of the story here.

There’s increasing pressure for ecommerce companies to offer customers “value-added services” such as same-day delivery or offline pick-up points thanks to a growing generation expectant of instant gratification – waiting even 3 days for a package isn’t going to cut it.  

Online brands and retailers end up working with a variety logistics companies to deliver orders across urban and rural areas in a quick fashion to appease customers. This is a trend not only in developed economies, but demanded in developing countries such as Thailand and Indonesia as well.

Progression of logistics in Southeast Asia

Southeast Asia is poised to become one of the world’s fastest growing market for ecommerce, estimated to exceed $238 billion by 2020. Known to be ridden with infrastructure challenges such as fickle trade regulations and lack of roads, government initiatives across the region are being put in place to improve logistics.

An example is the Indonesian government’s push to increase accessibility of islands in the country by constructing a road alongside the Malaysian border and building seaports.

“If you look at the roads, airports and railways, things are improving and will continue to. Infrastructure spend in Indonesia is expected to reach $165 billion by 2025 and the spend in public investment expected to increase by 7% per year,” says Charles Brewer, CEO at DHL Ecommerce.

Thailand also has a $50 billion infrastructure budget as the country plans to improve roads, highways and railways in the upcoming years.

But long term changes will take both investment and time before the region’s infrastructure can catch up to “same-day appetite” in developing markets and at a relatively inexpensive cost.

The ‘Light’ Model

In the meantime, online players can rely on the rise of an on-demand, lighter logistics model that tackles issues of long delivery periods and limited distribution in rural locations.

According to real estate consulting firm CBRE, modern logistics services are shifting away from big box warehouses, bulky deliveries and in turn, expanding their networks with existing infrastructure or building small counters across the country to meet the demands of clients.

Examples of this in Bangkok include SKYBOX pickup and dropoff kiosks, located at the city’s public train stations and Zalora Thailand that uses 7-Eleven as return points.

Logistics providers are also introducing collection points at existing locations such as shopping centers or office buildings in second and third tier cities as seen by DHL Ecommerce’s recent nationwide expansion in Thailand. The company’s aim is to decrease the time SMEs take to ship parcels.

According to a DHL survey, 55% of SMEs cite logistics as a time killer.

It’s resource heavy to build new hubs and roads and companies can’t afford the time needed to see infrastructure improvements and capture market share. By turning to a light model, logistics services can provide efficient, speedy services without big investments.

Adapting to (on) demand

Southeast Asia’s increase in delivery expectancies could be attributed to the fact that mobile subscriptions are ahead of the global average with 854 million mobile connections. These mobile first users can easily request for on-demand groceries, t-shirts and hot meals on the go with their phones.

Next day delivery account for 95% of existing logistics services in Thailand, while the remaining 5% is filled by on-demand delivery services. There’s still a vast opportunity for logistics players to service ecommerce companies that require speed and efficiency.

In Indonesia, there are PopBox lockers designed to make last mile more convenient for shoppers and merchants. According to William Tanuwijaya, CEO of B2C marketplace Tokopedia, “courier businesses will grow as they are needed to deliver products sold on marketplaces. The promise of fast delivery is also appealing to locals.”

In order to fully serve Southeast Asia’s growing customer demand for faster deliveries, logistics companies need to offer localized, out of the box solutions such as pick-up points in parcel shops, partnerships with convenience stores, lockers or risk being left behind.

 

Amazon was initially poised to make its much anticipated foray into Southeast Asia in Q1 this year. Now, it seems like the ecommerce giant hat delayed its entry to ‘later this year’, according to reports.

The long awaited launch has been relatively under the radar, although sources revealed that Amazon was planning to introduce its Prime and Fresh services to Southeast Asians. The region’s current most popular marketplace Lazada has in turn doubled down in the region to prepare for Amazon’s arrival, having acquired online grocery service Redmart in November last year.

But it seems that the US ecommerce giant is prioritizing other projects for now. Here are some of its most recent activity, including an acquisition and other market entry:

Source: Amazon Australia Twitter Account (Not yet verified)

Amazon poised to enter Australia

ABC Australia reported on 22nd March that Amazon is planning a launch down under and promising cheaper prices, faster delivery times and its online groceries delivery service. The company has reportedly hired more than a hundred people to cover roles in IT and logistics.

“They are the animal that went right across America devouring all before it, sending everyone broke,” said Gerry Harvey, founder of Australian online retailer, Harvey Norman.

There isn’t a confirmed launch date yet for Amazon AU.

Amazon acquires Souq.com to tackle the Middle East

Amazon has confirmed its acquisition of Dubai online retailer, Souq.com. The online retailer has similar offerings as Amazon, selling electronics, fashion and household items to six Middle Eastern countries. It was launched in 2005 as an online auction site, and pivoted to become an online marketplace in 2011.

Saudi Arabia and the UAE are attractive to Amazon being among the top countries worldwide for mobile penetration.

Souq has gained a large following, with an average 27 million visits spanning over six months based on SimilarWeb traffic.

Source: SimilarWeb

India’s ongoing battle

With Alibaba’s injection of $200 million into Paytm and biggest rival Flipkart’s recent $1 billion fundraising to solidify claims on India, Amazon will need to focus on the country to capture India’s projected $220 billion online GMV opportunity.

Bank of America Merrill Lynch report stated that India could become Amazon’s second largest market (after the US) after its investment of $5 billion into operations there.

“While revenues are relatively small to Amazon’s global scale, Amazon India could generate $81 billion in GMV and $2.2 billion in operating profit by 2025,” – Economic Times India  

There’s a lot of buzz brewing in India – Flipkart restructuring, Walmart investment, etc. – it’s no wonder Amazon is focusing on the activity.

But let’s not forget about Southeast Asia

Delayed or not, Amazon’s postponed launch date should be encouraging for local online and offline players alike, as it gives them more time to gear up to fight the giant.

Amazon is quietly laying down the groundwork for its Southeast Asian launch to meet the clear demand for its services here.

Google Trends over 12 months show that people are searching for Amazon, in relations to Singapore.

Google Trends search for Amazon.com, Inc. in Singapore

And it isn’t only retail businesses that are sweating because of Amazon’s global stretch. Advertising giants such as Google, especially as over 55% of Indonesians start their product search on a popular marketplace such as Lazada ID or Tokopedia.  

“The long-tail capacity, common for marketplaces, makes it feasible for Amazon to not just be an online retailer and a marketplace but also the search engine where it all starts.” Early Moves

Players, are you ready?

Here’s what you should know.

1. Walmart’s Jet.com to buy fashion retailer ModCloth for less than $75m

The deal, which had already been rumored, is almost finalized and will fetch a price tag between $50 million and $75 million.

Walmart has been snapping up smaller online retailers in recent months

The acquisition comes after a series of struggles for ModCloth, including several rounds of layoffs. The company saw little growth in 2014, and reduced its engineering team to just over half a dozen.

Walmart explained that it’s increasingly interested in the apparel category, given it’s now one of the largest for online retail.

Read the rest of the story here.

 

2. fast fashion brand Zara to launch ecommerce in Thailand

It seems that Zara is doubling down on ecommerce in Asia, having launched its online website in Singapore and Malaysia earlier this month. Thailand and Vietnam’s stores will launch within the next few weeks, with India following later this year.

Zara’s  business model allows it to get clothes to stores much faster than its rivals, who prioritize low-production costs and outsource manufacturing to China, and can react more quickly to shifting consumer tastes without holding excess inventory.

Read the rest of the story here.

 

3. Recommended Reading: The 2017 Indonesian startup popular sector forecast

DailySocial conducted a survey with a number of investors about which sectors are going to be hot, and what their focus in 2017 will be. Along with predictions, ecommerce influencers also share their two cents:

“From year to year, ecommerce services and online transactions will become part of Indonesians’ day-to-day activities,” says William Tanuwijaya, CEO of Tokopedia.

Read the rest of the story here.

 

Here’s what you should know today.

1. 11street Thailand shares growth strategy

Thailand’s ecommerce market is expected to expand to $2 billion (86 billion baht) this year and to continue to grow, eventually reaching $6 billion (213 billion baht) in 2022, accounting for approximately 5% of retail business in Thailand.

11street has been getting 14 million visits within 42 days, but ecommerce is still only at 1% penetration rate, which highlights the high growth potential. This year, the marketplace is spending over $28 million (one billion baht) on marketing alone.

Read the rest of the story here.

 

2. Chinese ecommerce website Vipshop is a company no one talks about

Vip.com has managed to turn the  business of flash discount sales into a high-class luxurious experience, adding in brand cachet and solid delivery.

While JD.com and Alibaba are both pushing into fashion retailing, Vipshop’s early-mover advantage in flash sales has helped it build some critical mass, not only among shoppers but among brands looking to clear inventory while lacking the offline outlets commonly available in Western markets.

The result has been an average 71% sales growth over the past 10 quarters and continuous profitability for the past four years. But why aren’t people talking about it?

Read the rest of the story here.

3. Jay Z is planning a VC fund

Rapper Jay Z is building the fund with long-time partner and Roc Nation co-founder Jay Brown. They plan to focus on seed investments in young startups. With help from Sherpa Capital, founded by Uber’s early advisors, Jay-Z will have all control with his own brand.  If Jay Z’s upcoming fund can leverage his branding expertise and promotional influence, it has a chance to do very well.

Read the rest of the story here.

 

4. Unilever Indonesia launches on Tokopedia

Following a launch in personal care and baby products on Shopee’s mobile marketplace, Unilever has announced its most recent launch on marketplace Tokopedia, citing ecommerce solutions provider aCommerce as its fulfillment partner.

Unilever has taken a marketplace approach across Southeast Asia, not having yet committing to a direct-to-consumer approach. Most recently, the company made headlines when Kraft-Heinz dropped acquisition attempts.

Read the rest of the story here.

Here’s what you should know for today.

1. Indogen Capital is Indonesia’s newest venture fund

The fund has already signed three deals. Two are with Indonesian startups Ahlijasa and HijUp. The third is with Insight Medica from Singapore.

The fund only at companies that are beyond the seed stage, and typically invest between US$150,000 to 500,000. Indogen capital has five founders, one is Leontinus Alpha Edison, who co-founded Tokopedia.

Read the rest of the story here.

 

2. CapBridge Investment Trust (CIT) launches in Singapore

The fund will manage sub-trust funds, the first of which is the Pre-IPO Fund targeting $100 million. It’ll allow institutional investors such as banks, insurance companies, and mutual funds to invest in venture capital-backed startups.

The fund will invest only in startups that already have lead investors and meet criteria such as a revenue track record and minimum financing previously raised.

Read the rest of the story here.

 

3. 11street claims early success following Thailand launch

Korea’s ecommerce marketplace 11street says it has served more than 150,000 Thai shoppers with transactions worth more than over $5 million (200 million baht) since its soft launch in Thailand in mid December.

11street Thailand currently has more than 9,000 Thai and international sellers.

Read the rest of the story here.

 

4. Community Chatter: What are Jeff Bezos’s biggest mistakes as the CEO of Amazon

Is one big mistake that Amazon is making right now about the fact that they’re not giving access to data, customer relationships and logins? Auren Hoffman, SafeGraph CEO has pointed this out on his Quora account. 

Hoffman says: Amazon has done everything to hold the data for its own use only. It is super protective of the data. It is the only company I know of that masks and regularly changes its email receipts so companies like Google have a hard time reading them.

It has worked for Amazon so far, but time will tell whether they will be one day blindsided by a more open data system.

Read the post here.