Alibaba in talks to pick up stake in Indonesia’s ecommerce major PT Tokopedia

Photo: Bloomberg

China’s e-commerce giant Alibaba Group Holding Ltd is in talks to make a significant investment in one of Indonesia’s largest online retailers, PT Tokopedia, according to three people aware of the development.

The Chinese firm is learnt to be in discussions with Tokopedia to lead a funding round that could be worth up to $500 million, the people cited above said. Existing investors SoftBank Group Corp and Sequoia Capital are also going to participate in the latest round.

Alibaba appears to have edged out its largest rival JD.com that was also in discussions to invest hundreds of millions of dollars in the Indonesian firm. JD.com is likely to have withdrawn from these discussions, said one of the sources.

When contacted by DEALSTREETASIA, Tokopedia declined to comment.

“We don’t comment on market rumours,” said an Alibaba spokesperson. JD.com, too, declined to offer comment.

Alibaba’s proposed funding in Tokopedia is believed to be one of its largest investments after its infusion of over $2 billion (in total) in Southeast Asia’s largest e-commerce firm, Lazada Group SA. In June, the Chinese firm hiked its stake in the retailer, which operates in Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam, to 83 per cent by pumping in an additional $1 billion.

Founded in 2009 during an internet boom in Southeast Asia, Tokopedia is an online marketplace for individuals and small and midsize business owners in Indonesia. At a press conference held recently, its top executives appeared to inadvertently confirm the firm’s ongoing fundraising discussions.

Japan’s SoftBank Group Corp is a common link between Alibaba and Tokopedia – it is an investor in both firms. In fact, the Japanese firm was among early Tokopedia investors, leading a $100-million round in the e-commerce firm in 2014 along with Sequoia Capital, a JD.com backer. The funding marked SoftBank and Sequoia’s first investments in Indonesia and was believed to be the largest round raised by a startup in the Southeast Asian country at that time.

Last year, Tokopedia raised another $150 million in an undisclosed round from several venture capital firms, including cross-border investment firm Amasia. That funding round, which valued the company at well over a billion dollars, brought the total amount raised by Tokopedia to around $250 million.

Outside of China and India, Indonesia is the hottest e-commerce market in Asia; it is expected to grow from $8 billion in 2016 to $65 billion by 2020. In addition to its presence in the country through Lazada, Alibaba has formed a joint venture with media firm Emtek to crack Indonesia’s biggest pain point – digital payments. Together, the two companies plan to offer mobile payments solutions and other related services.

With more than 600 million consumers, a growing middle class and rising mobile internet usage, Southeast Asia has emerged as a new e-commerce and consumer internet battleground for China’s corporate giants. In a bid to gain a significant head start over their rivals from the US and outperform each other, these companies have been leading mega funding rounds and forging new partnerships.

One of the reasons behind the growing consolidation in Southeast Asia’s e-commerce market is believed to be the anticipated entry of US e-commerce giant Amazon. The firm, which was reportedly going to make its foray earlier this year, seems to have delayed its plans for now.

Meanwhile, the Chinese firms are forging ahead with their market domination plans. On Monday, Singapore-headquartered ride-hailing firm Grab said it is raising $2.5 billion from investors including China’s Didi Chuxing and Softbank Group in the largest single financing in the region. Its competitor in Indonesia, Go-Jek, is reportedly in talks to raise up to $1 billion, with China’s Tencent Holdings learnt to have invested $100-150 million in the latest round.

The day also saw Malaysia’s second largest bank CIMB announce an equity joint venture with Alipay, the online payment arm of Alibaba’s Ant Financial Services Group, to provide mobile wallet and related financial services in the country.

Also Read:

Tokopedia confirms it is fund raising, does not reveal if talks are on with China’s JD.com

China’s JD.com said in talks to invest in Indonesia’s Tokopedia

It’s JD versus Alibaba-backed Lazada in Indonesia’s e-commerce battlefield

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.