Tag Archives: Asia
Platformization is a term in technology that I haven’t heard used much, at least not until I came to Bangkok to speak at a TechSauce event focused on the growing opportunity in Southeast Asia.
I moderated a panel with a group of platform innovators from the region — Go-Jek and Line — with brands that cross many vertical sectors from gaming and chat to ride-hailing and shopping.
These two companies have expanded far beyond their core service. And that makes sense to keep their users coming back for more from their brands no matter the service, said my panelists Ajey Gore, CTO of Go-Jek and Ariya Banomyong.
It’s also a defensive move. If they don’t extend to new areas, someone else. That someone else could very well be the Chinese tech giants who see Southeast Asia as the next opportunity. With a market size of 665 million and a culture that is more similar to China than western markets, China’s largest technology companies are entering the region, snapping up shares in the region’s rid-sharing and payment upstarts such as Go-Jek, Grab, Ola and Paytm.
So it can amount to a strategy of building a moat around your business to ward off rivals. It’s survival of the fittest, explained Go-Jek exec Gore.
This platform is well played by Go-Jek and Line, which can simplify the name of their services with Go and Line, just like Alibaba has done with so many of its offerings such as AliPay, AliCloud, AliHealth and so on.
How do startups fare in an environment where so much of the action is centered on these platform players?
Grace Xia, a venture investor with Jungle Ventures and former Tencent executive, says that startups aren’t cut out. They can become innovation pipelines to these platform companies. That could even lead to an acquisition by the biggies, which certainly is not unheard of in this fast-emerging tech innovative region.
Rebecca A. Fannin is founder/editor of news, events and research group Silicon Dragon. She is an author of three books on innovation and venture trends, and is a public speaker.
BEIJING (Reuters) – Chinese online retailer JD.com Inc has made an investment in Vietnamese e-commerce firm Tiki.vn, expanding its Southeast Asia business amid growing competition in the region from Alibaba Group Holding Ltd and Amazon.com Inc.
JD.com co-led the financing with Vietnamese entertainment and social media firm VNG Corp, which is an existing investor, China’s second-biggest e-commerce firm behind Alibaba said in a statement on Tuesday.
The firm did not disclose the size of the funding but said that JD.com will become one of Tiki’s largest shareholders alongside VNG following the deal.
Vietnamese media had reported in November that the round was worth roughly 1 trillion dong ($ 44.04 million). JD.com declined to give a dollar number for the investment, when contacted by Reuters.
“With JD’s expertise in leveraging social media for e-commerce, Tiki.vn’s partnership with VNG in social network and mobile payments is a natural fit,” Winston Cheng, president of JD.com’s international business, said in the statement.
Vietnam is the latest focal point in JD.com’s strategic push into Southeast Asia, where Alibaba and Amazon have also made significant investments in the past year.
JD.com will tap Tiki.vn’s warehousing and delivery system, as well as its technology and payments capabilities.
Tiki.vn and VNG’s tie-up has similarities to the partnership between JD.com Inc and internet giant Tencent Holdings Ltd, which is an investor in JD.com and Asia’s largest tech firm by market cap.
JD.com leverages data and payments from Tencent’s WeChat, China’s most popular social media app, and will seek to build similar capabilities with VNG and Tiki.vn, Cheng told Reuters.
While Southeast Asia’s e-commerce market is still nascent compared to the China‘s, improvement in internet services and an increase in mobile-based payments have attracted large international e-commerce firms to the region.
Alibaba has invested heavily in payment and e-commerce ventures in Thailand, Singapore, Indonesia and Malaysia. U.S. retailer Amazon also launched its subscription-based Prime service in Singapore last month in a bid to challenge Alibaba-backed online retailer Lazada Group in Southeast Asia.
JD.com launched a local online retail business in Indonesia two years ago, and now claims to be the country’ largest retailer by revenue. It also formed a $ 500 million e-commerce venture with Thai retailer Central Group.
Besides VNG, Tiki.vn’s previous investors include Seedcom, Sumitomo Corp and CyberAgent Ventures.
($ 1 = 22,709.0000 dong)
Reporting by Cate Cadell; Editing by Edwina Gibbs and Muralikumar Anantharaman
SINGAPORE/BANGKOK (Reuters) – When diaper maker DSG International (Thailand) wants to know what its customers are thinking, it often turns to Lazada, an e-commerce firm majority-owned by Alibaba Group Holding (BABA.N).
“From (their) data, we know mothers sometimes browse at night, so we can offer flash sales when we know customers are browsing,” says Ambrose Chan, the Thai company’s CEO.
Southeast Asia is the world’s fastest-growing internet market, home to 600 million consumers from Vietnam to Indonesia via Singapore, many of them tech- and social media-savvy. They are rapidly spending more time and money online. A Nielsen study in 2015 estimated Southeast Asia’s middle-class will hit 400 million by 2020, doubling from 2012.
Gross merchandise value of ecommerce in Southeast Asia will balloon to $ 65.5 billion by 2021, from $ 14.3 billion last year, predicts consultancy Frost & Sullivan.
Research firm Euromonitor forecasts internet retailing in Indonesia, for example, will more than double to $ 6.2 billion by 2021, and Thailand will increase 85 percent to $ 2.8 billion.
(For a graphic on Southeast Asia internet sales click reut.rs/2l3qULe)
Consumer goods firms, such as Unilever (UNc.AS) and Japanese cosmetics firm Shiseido (4911.T), say the e-commerce boom allows them to push deeper into markets that can otherwise be difficult to understand and tough to penetrate due to poor retail networks and infrastructure.
“Data from Lazada has been used to position certain products where consumer preferences are different. For example, Thai customers like to buy diapers in special cartons, while Malaysians prefer multiple packs,” says Chan.
To reach more customers and get a better handle on their online behavior, consumer goods companies are forging partnerships with e-commerce firms like Lazada and fashion website Zalora.
A customer who clicked on a 50 milliliter product may instead buy a smaller 30 ml product, said Pranay Mehra, vice president, digital and e-commerce at Shiseido Asia Pacific, noting that data and online selling experience can help firms bundle offers, decide on packaging and distribution, and influence where to set up a physical presence.
“This data is very powerful and very insightful, if used properly,” Mehra added.
Unilever, whose products range from Hellmann’s mayonnaise to Dove soap, said it is seeing more demand from rural consumers in developing markets like Indonesia and Vietnam.
“With all our e-commerce partners, we’re using data to help us find innovative solutions to unlock key barriers of high cost delivery and poor credit card penetration in remote areas,” said Anusha Babbar, e-commerce director at Unilever Southeast Asia and Australasia.
The conglomerate, which works with the likes of Singapore online grocer RedMart, Indonesia’s Blibli and Vietnam’s Tiki, said it introduced its St Ives skincare brand on Lazada after seeing a trend towards natural products and shopper search data.
DATA AND LOGISTICS
“Traditional retailers will struggle to see customer behavior,” said Lazada Thailand’s CEO, Alessandro Piscini. “We can tell if a customer is pregnant from their search behavior.”
Lazada, he said, plans to use data science to help its merchants customize offers for specific customer groups based on age, gender and other preferences.
Zalora, which sells clothing and accessories online in markets including Singapore, Malaysia and Indonesia, said it was working on ad-hoc projects with some brands to help them understand their customers based on data.
Lazada and Zalora are among the few e-commerce platforms that operate in multiple Southeast Asian countries. But the region is becoming a new battleground as Amazon (AMZN.O) and JD.com (JD.O) make beachheads in Singapore and Thailand.
Lazada Thailand will focus on partnering with fast-moving consumer goods companies to maintain its lead, Piscini said, and is expanding its logistics footprint across a region that has poor roads, clogged cities and thousands of often remote islands.
To be sure, online still contributes a tiny portion to consumer goods companies’ sales, but some local firms are going beyond partnerships and investing in their own e-commerce capabilities.
Thailand’s top consumer goods manufacturer Saha Group (SPI.BK) (SPC.BK) has seen online sales of some of its brands rise tenfold since it began a partnership with Lazada in June, but online still represents just 1-2 percent of total sales.
Saha is using e-commerce data to customize offerings.
“We now make real-time offerings to customers. Before, promotions would be seasonal,” Chairman Boonsithi Chokwatana told Reuters.
The company, whose products include instant noodles, toothpaste and laundry detergent, is investing 2 billion baht ($ 60 million) in logistics to support its e-commerce ambitions, including a 21-storey warehouse and a big data team, he said.
Reporting by Aradhana Aravindan in SINGAPORE and Chayut Setboonsarng in BANGKOJK; Editing by Ian Geoghegan