Tech in Asia’s Post

The inability to channel funds into businesses shows it’s lagging in technology and innovation. Being innovative, however, is no guarantee of profitability, as GoTo has discovered. In 2015, it introduced GoSend, pairing its ride-hailing drivers with Tokopedia’s e-commerce customers who wanted their orders shipped instantly. Due to its prolonged losses and unclear path towards profitability, GoTo has recently taken downsizing measures. It has cut employee headcount by more than 1,000 and stripped off business units to prioritize profitability over its previous aspiration for high growth. The challenges faced by these two early Indonesian unicorns underline problems in the country’s tech start-up landscape. Scores of Indonesian tech companies failed in the early stages due to a heavy reliance on providing copycat services, a lack of technological innovation, and offering services for which there is a lack of demand.

TikTok picking up 75% in Indonesian e-commerce major Tokopedia, is easily the biggest deal in SEA's startup ecosystem over the past 12 months. The man behind the deal - GoTo CEO Patrick Walujo - spoke publicly about it for the first time at DealStreetAsia's Indonesia summit. Patrick, who is also the founder of Northstar Group, the country's largest domestic private equity firm, which has been an early backer of GoTo Group, has been the opening keynote for the past three editions of our Jakarta summit, and every time it has turned out to be among the best sessions at the event. I've always enjoyed interviewing him on stage, and here are some notable quotes from the session. The audience and I were amazed by Patrick's candidness during the fireside chat.  Adding some of the quotes from the session here:   "Every single big group in Indonesia was talking to them (TikTok), and everybody wanted to become their partner. There’s a lot of criticism to the deal. But people do not understand it, what I was facing at the time was a choice between survival and death. It was going to be a slow death." "Together, we will become the number one e-commerce player in this market. This is the promise that I made to the Tokopedia people for the first time. We are delivering that promise to our employees. Tokopedia will become a profitable business." "I have been on the board of [Indonesian ride-hailing giant] Gojek for a long time. Northstar and I, personally, were the first investors in Gojek. I was also involved in merging [Gojek] with Tokopedia and taking GoTo [the combined entity] public. But when I came to GoTo, I realised that the board members only knew the surface. It took me some time to learn about the fundamentals." The detailed story on this summit session is here: https://lnkd.in/gDME47aK While he had hinted at it during the session, a few days later, GoTo Group announced it had achieved positive adjusted EBITDA for the fourth quarter of 2023 while surpassing the upper limit of its full-year adjusted EBITDA guidance range. This was the Indonesian ride-hailing and food delivery company's first first-ever profit on an adjusted basis. If you are a DealStreetAsia subscriber, you can see the video of the firside chat with Patrick Walujo titled ‘Driving GoTo towards profitability and lessons for Indonesia’s tech ecosystem’ here: https://lnkd.in/g6xPx8QW

ByteDance has acquired a 75% stake in Tokopedia for $1.5 Billion. This photo and tagline from 6 years back fits even now. (meaning: we Tokopedia have just started) GoTo Group holds the remaining ~25% of the entity. Through its operations this year TikTok Shop demonstrated the power of influence and social discovery They truly democratized commerce for small merchants and unlocked a new channel of growth This investment makes them the top e-commerce in Indonesia (~40% market share), ahead of Shopee At Mezink, we truly believe in the power of social to unlock growth and this move revalidates it Our infra works with TikTok and this unlocks another set of use cases we would be able to drive for brands Should be a win for the ecosystem 🚀 #ecommerce #indonesia #tiktokshop #tokopedia #startups

I probably shouldn't say this. But as a product person, I suck at prioritisation. I’m always dabbling in a thousand things. Coming up with new ideas, experimenting, or worse… Daydreaming about future potential problems. 😈 What would we do if we had to suddenly onboard 1000 customers? 😈 Should we put our money in a treasury next time? These are all ‘good’ problems. Problems that sorta say ‘you’ve made it’. It's nice to think about them but it has little bearing on our current situation and is extremely distracting. To combat this, my co-founder (Ming Jiang Gui) and I have been constantly reminding ourselves: 𝙀𝙖𝙧𝙣 𝙩𝙝𝙚 𝙧𝙞𝙜𝙝𝙩. Whenever we think of a new idea/problem, we pause and ask: have we earned the right? If yes, carry on. If not, we refocus. And it doesn’t just stop there. Sometimes, this leads to more questions. What’s missing? What do we need to do to earn the right? Asking this simple question not only helps us prioritise better but also clarifies what else is needed. Right now, we are working to earn a new right. One that allows us to scream 𝗪𝗲 𝗵𝗮𝘃𝗲 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝗿𝗲𝗹𝗶𝗮𝗯𝗹𝗲 𝗮𝗻𝗱 𝘁𝗶𝗺𝗲𝗹𝘆 𝗱𝗮𝘁𝗮 𝗶𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗦𝗵𝗼𝗽𝗲𝗲 𝗮𝗻𝗱 𝗟𝗮𝘇𝗮𝗱𝗮. We've started onboarding brands onto our beta program 🎉 So if you are an ecommerce brand that sells on Shopee and Lazada and wants to centralise your sales and marketing data — reach out! #ecommerce #earntheright #startups #kabana

[Published in August 2023] 💻 2022 brought challenges for Indonesia's SaaS industry, with funding dropping 38.1% and startups like TokoTalk facing closures. 📉 Despite the funding gloom, local SMEs, a key audience for SaaS, grew to 65 million. 🚀 SaaS offerings like POS systems dominated funding rounds at nearly US$400 million since 2015. 🔄 Diversification and acquisitions, seen with companies like Sirclo and Mekari, added complexity to the evolving SaaS landscape.

[Published in December 2023] 📈 TikTok Shop is back in action in Indonesia with a mega deal! The US$1.5 billion investment in Tokopedia surprised analysts but signals a strategic move for both parties. 💼 GoTo’s merger with TikTok offers a powerful backend for scaling business fast, while Tokopedia avoids costly subsidy wars for market dominance. 🇮🇩 Regulatory concerns are addressed as the partnership emphasizes promoting Indonesian goods and creating local jobs, but scrutiny remains high. 💥 With a projected 40% market share, TikTok and Tokopedia could overshadow Shopee in Indonesia's ecommerce space. Watch out for the competitive headwinds ahead.

🛍️ TikTok Shop Revival TikTok strikes a mega deal with Tokopedia to revive its Shop in Indonesia, overcoming a two-month ban. 🇮🇩 💰 TikTok to invest $1.5B, acquire 75% stake in Tokopedia, retaining its shopping arm. Analysts impressed by the cost-effective takeover. 🔄 Strategic Merger: Tokopedia, with 35% of Indonesia's GMV, opts for a merger to avoid costly subsidy wars. TikTok gains access to a robust backend for rapid scaling. 🚀 By offloading Tokopedia, GoTo Group can concentrate on on-demand and financial services, potentially de-risking its ecommerce business. 🌐 Analysts anticipate a wave of M&A activity in Southeast Asia. Combined forces set to capture 40% of Indonesia's ecommerce, challenging Shopee.

From the results of online crawling or digital searches, Compas estimates that the sales value of beauty products on Shopee, Tokopedia and Blibli throughout 2023 will reach IDR 28.2 trillion. Source : https://lnkd.in/gWSAbZ-b #BWC #Blackwolvescapital #Startup #funding #financing #finance #business #workingcapital #investing #capital #newbusiness #startupfunding #businessowner #owner

TokoTikTok: Indonesian ecommerce platform Tokopedia has closed its merger deal with TikTok. The merger could change the landscape of the digital economy in Indonesia – not only by changing the market share of e-commerce but also by opening the possibility of new kinds of collaboration between e-commerce and social media companies in the future. 🇮🇩 With a population exceeding 280 million, Indonesia presents an immense market opportunity for e-commerce players. A significant segment of this population is young and tech-savvy, increasingly inclined towards online shopping – a perfect recipe for e-commerce growth. 🤔 This merger seems to be a clever pivot for TikTok, circumventing the social media e-commerce ban while gaining a substantial stake in the market through Tokopedia. If successful, this could be a playbook for ByteDance's future global strategy and a case study in navigating regulatory environments. #DigitalEconomy #TechInnovation #MarketDynamics #IndonesiaEcommerce #GoToByteDancePartnership #FutureOfCommerce #Ecommerce #TokoTikTok https://lnkd.in/ePFigNT3

"Gojek's Vietnam exit signals rise of domestic rivals, opens opportunities for Grab. " - Excerpts Grab's prospects in Vietnam appear grim, facing an uphill battle against Vinfast's vertical integration strategy in the ride sharing / transportation sector. Vinfast, equipped with its own platform, electric vehicles, and a structured driver compensation model, seems poised to outmaneuver Grab. As Grab struggles to achieve financial sustainability, and akin to the declining traditional taxi industry, its market share in Vietnam is expected to dwindle. Moreover, Vinfast is anticipated to replicate this successful ride-sharing model in the Indonesian market once its electric vehicle production facility is established there.