Ecommerce Guide

Alibaba To Invest In Indonesian Ecommerce Platform PT Tokopedia

Alibaba, the Chinese ecommerce giant is reportedly in talks to make a significant investment in PT Tokopedia, one of the largest online retailers in Indonesia.

Tokopedia was founded in 2009 by William Tanuwijaya and Leontinus Alpha Edison and is an online marketplace for small to medium sized businesses as well as individuals. The company received initial seed funding from PT Indonusa Dwitama in 2009 for IDR 2.5 billion followed by capital injections from East Ventures (2010), CyberAgent Ventures (2011), NetPrice (2012), and SoftBank Ventures Korea (2013). Then, in 2014, Tokopedia managed to become the first ever technology company in Southeast Asia to receive a US$100 million investment from Softbank Internet and Media and Sequoia Capital. The company is one of the region’s biggest success stories, with the company now having more than 7.5 million transactions per month with a monthly growth rate that is between 10 and 20%

The Chinese ecommerce giant is apparently in discussions with the company to lead a funding round that could be worth up to $500 million, with current investors in Tokopedia Softbank Internet and Media and Sequoia Capital also expected to participate. The revelations that Alibaba is in talks with Tokopedia seem to suggest that Alibaba have edged out their largest rival, JD.com who were also thought to be in discussions with the Indonesian firm.

Southeast Asia, The Next Ecommerce Frontier

The proposed funding by Alibaba in Tokopedia is believed to be one of its largest ever investments, after its investment of over $2 billion in Lazada Group SA, the largest ecommerce company in the Southeast Asia region that operates in Indonesia, Thailand, Singapore, the Philippines and Vietnam. Speaking in July after the announcement of the investment, Daniel Zhang, the CEO of the Alibaba Group said in a prepared statement.

“The e-commerce markets in the region are still relatively untapped, and we see a very positive upward trajectory ahead of us. We will continue to put our resources to work in Southeast Asia through Lazada to capture these growth opportunities.”

As one would expect, Alibaba’s investment in Southeast Asian ecommerce looks to be a savvy one. Earlier this year, Mark Woo, head of e­-commerce, travel and financial services at Google declared that Southeast Asia is ripe for growth and will be the next major ecommerce boom market.

“China is at the peak at the moment, with the majority of sales happening through the mobile web and mobile applications. India is hugely dominated by a couple of large players — Flipkart and Amazon. Japan and Australia are hugely mature markets, probably more mature than the UK and the US in terms of ecommerce penetration and e­commerce savviness by consumers. This really leaves us with Southeast Asia as the next frontier.”

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Scott Bretton

Scott Bretton

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