Alibaba and Tencent race to capture Southeast Asian ride-hailing market
Sep 17, 2018 (China Knowledge) - Southeast Asia, has been highlighted as the world’s fastest growing internet region, with the internet economy estimated to grow to USD 200 billion by 2025, as seen in Google-Temasek e-Conomy SEA report.
E-commerce and ride hailing application are leading the way in growth sector, with over 40% compound annual growth rate (CAGR). The top two ride-hailing applications in SEA are Go-Jek and Grab.
Having developed a huge following and capturing the market in China, the country’s two biggest tech giants, Alibaba Group Holding Ltd. <BABA:NYSE> and Tencent Holdings Ltd. <700:HK> are looking to tap into the SEA market, through securing major equity stakes in the local businesses.
Go-Jek, Indonesia’s first unicorn business, started as a ride-hailing application, allowing consumers to book ojek, a motorcycle taxi. The company has since expanded to offer other services, including courier, food delivery, housekeeping and even spa treatment. Go-Jek has also developed their own e-wallet, Go-Pay, to enhance convenience for Go-Jek users. Its biggest rival in SEA, is Grab, which also offers similar services.
During its fundraising round earlier this year, Go-Jek managed to raise more than USD 1.5 billion from backing of well-known investors including Tencent and Temasek Holdings
With plans to develop and expand its mobile payment services, potential partnership with its investor Tencent, can help push forward the speed for implementation and strengthening of the system.
WeChat Pay, a payment service intergrade into the popular chat application, is currently available in over 40 countries in 13 currencies. According to Grace Yin, director of WeChat Pay’s international operations, more than 800 million users have linked their bank accounts or credit cards to WeChat Pay.
News of Alibaba making an investment in Grab surfaced earlier in April. Besides Grab, Alibaba have various investments and partnerships with other businesses all over SEA. Lazada, based in Singapore, is an e-commerce company with an Amazon model in SEA. Alibaba has acquired 83% stake in Lazada, since 2017, with two rounds of investment made.
Copyright © 2018 www.chinaknowledge.com
Send feedback or comments to: email@example.com
For more news, financial weekly reports, business guides to China and other premium information, subscribe to China Knowledge today: www.chinaknowledge.com
To access our page on Bloomberg, type CKFI