Chinese Big Tech makes a huge play for Indonesian market
The Indonesian ecommerce market is huge – so huge that it’s predicted to eclipse online sales in India as soon as 2020. Understandably, the big players in Chinese ecommerce are eager to get a foothold before it explodes. Alibaba, Tencent, and JD.com already back four of the five biggest plays in the country, and this year has seen them spend big bucks to outdo each other position-wise.
In March, Alibaba invested $2 billion in Lazada Group SA – a major Indonesian name in the sector – and it has previously invested as much as $1.1 billion in the country’s largest online retailer, Tokopedia. Meanwhile, internet giant Tencent owns 36% of Sea Ltd., which owns Shopee Indonesia. JD.com gains exposure to the Indonesian market through its own subsidiary.
Ecommerce players are squeezing social media’s share of the online retail market in Indonesia
Indonesia is an attractive market for these internet giants not just because of its enviable demographics, but also because there’s a clear route to dominance of the country’s online retail market. Indonesians have been shopping online for years through social media channels, long before ‘proper’ ecommerce operators arrived. As a result, the audience is there, ready to be disrupted – and Alibaba, Tencent and JD.com are old hands when it comes to disruption. In 2014, half of all online sales were made through social media… you can see today’s breakdown in the chart above.
Set to eclipse Indian online sales in just two years, Indonesia’s ecommerce market is turning out to be a very big pie indeed – luckily, Chinese tech has a huge appetite.
Dominion holds Alibaba, Tencent and JD.com in its Global Trends Ecommerce Fund.
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