Amazon wants in on Indonesian ecommerce too
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Amazon wants in on Indonesian ecommerce too

Just days after we reported on Chinese tech titans race to colonise the Indonesian ecommerce scene, news has broken that Amazon wants a piece of the pie too – and it’s planning to invest as much as $1 billion to get it. Amazon vice president Werner Vogels is alleged to have proposed the investment plan to Indonesian president Joko Widodo last Friday, according to local reports. It covers ten years of spending and the establishment of the company’s cloud computing segment, Amazon Web Services, in the country.

Amazon’s share price has risen by 64% year to date

graph 2509 amazon

SOURCE: Yahoo Finance

Indonesia has a vibrant start-up scene, and cloud computing is widely regarded as being a central component of its health. That means the market for Amazon Web Services in the country is potentially a high growth one. According to market research firm Statista, spending on cloud computing rose from $160 million in 2012 to $1.8 billion this year.

But Amazon is not the first mover in this market. As noted last week, Alibaba, often regarded as the Chinese Alibaba, has pumped serious cash into Indonesia, and it recently became the first major cloud service provider to open a data centre in the country.

Amazon is used to stiff competition – and it’s becoming an expert in Asian ecommerce too. This would mark its second major South-east Asian expansion after it moved into Singapore last year. Today, its Prime Now fast delivery service in Indonesia is its largest fulfilment centre worldwide, occupying around 100,000 square feet. Given the success Amazon has had in the west, Chinese tech better pay attention to this major new player!

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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