Due to the successful of e-commerce business model in China and market saturation, China’s companies are targeting Southeast Asia’s e-commerce industry
GoTo Group, Indonesia’s biggest tech firm, has recently received sufficient orders from investors for its initial public offering (IPO) on the Indonesia Stock Exchange (IDX) next month and could raise at least USD 1.1 billion within its targeted price band, according to a person familiar with the matter.
Public information shows that GoTo’s biggest investors include SoftBank Group Corp (9984: T), Alibaba Group (BABA: Nasdaq), Tencent (0700: HK) and Singapore sovereign wealth fund GIC.
GoTo was established by merging ride-hailing-to-payments firm Gojek and Indonesia’s biggest online shopping platform Tokopedia. As one of its largest financial backers, Alibaba would be the one of the main beneficiaries of GoTo’s IPO.
Compared with Tencent, which started making investment overseas as early as 2005, Alibaba made its first foreign acquisition in 2010 of a company called VendioServices, a tech supplier for E-commerce firms.
Alibaba has invested in foreign companies extensively since 2013, and the targets include British luxury online shopping platform Farfetch, Southeast Asia’s online shopping platform Lazada, Indonesia’s online shopping platform Tokopedia, Thailand’s delivery firm Flashexpress, India’s e-commerce firm PaytmMall and delivery firm XpressBees.
Specifically, Alibaba injected USD 4 billion into Lazada, increasing its stake from 51% to 83%. In 2021, Alibaba spent USD 750 million to acquire Turkey’s e-commerce firm Trendyol. It has also poured USD 400 million into Vietnam’s online shopping platform The CrownX.
In recent years, Southeast Asia’s online shopping websites industry is getting more competitive, as China’s e-commerce and tech giants have been stepping up their investments and acquisitions.
Examples abound. Alibaba, Tencent and JD (JD: Nasdaq) invested in Lazada, Shopee and JD Central, respectively. Meanwhile, Amazon (AMZN: Nasdaq) is also turning up the heat by entering the online shopping scene in Southeast Asia.