Chinese tech rivals Alibaba Group Holding and Tencent Holdings are poised to ride a fundamental acceleration in Southeast Asia’s e-wallet market through a sprawling web of proxies, according to DealStreetAsia’s latest report, Chinese tech giants’ e-wallet proxy war in SE Asia.
Data compiled by DealStreetAsia shows that although the tech giants operate directly only in a few countries in Southeast Asia, they currently back at least 11 e-wallets in six key markets: Indonesia, Malaysia, Myanmar, Thailand, the Philippines and Vietnam.
Those indirectly operated e-wallets reach a combined 150 million registered users and are often leading brands in their respective markets.
Those proxies give Alibaba and Tencent valuable exposure to Southeast Asia’s digital payments market, which Google, Temasek and Bain & Co have predicted will multiply more than five times in gross transaction value between 2019 and 2025 to $114 billion.
In the wake of the COVID-19 pandemic, those estimates have probably become too conservative. Take Grab, for example. The super app, which operates the GrabPay wallet across all six countries covered in this report, told DealStreetAsia that it saw a 30 per cent jump in first-time cashless users for GrabFood.
While Alibaba appears to have an edge in Malaysia and Myanmar, Tencent seems to be ahead in Vietnam based on the user base of wallets that they back in those markets. Both camps seem evenly matched in the Philippines and Thailand.
In Indonesia, the Chinese titans may be the least of each other’s concerns. There, homegrown super app Gojek rules the day with its dominant GoPay e-wallet. The e-wallet may have gotten stronger over the past week with fresh investments from WhatsApp owner Facebook and e-payment giant PayPal.
While Tencent is an investor in Gojek, it holds only a minority stake and appears to have little influence over Gojek’s e-wallet strategy. Gojek’s closer ties with Facebook, in particular, nudges GoPay closer to Facebook’s WhatsApp messaging platform than Tencent’s WeChat ecosystem. While Gojek and GoPay are undoubtedly affiliated with Tencent, for this report Gojek is deemed as not “backed” by Tencent.
Access the Chinese tech giants’ e-wallet proxy war in SE Asia report to find out the state of market in each country where Alibaba and Tencent have backed e-wallets, as well as the regulatory and market trends that will shape the battle in the months ahead.
The report is only available to premium subscribers. Not a subscriber? Pick up a subscription today to access our exclusive content, data and reports.