Chinese companies will dominate the Southeast Asian technology market
Venturecraft Group founder Isaac Ho and several other investors are watching a road show for a cancer detection startup in Singapore. At this time, a Chinese billionaire stood up and, apart from anything else, wrote the words "speed x market share" in Chinese on the whiteboard. This is a simple formula, which means: do the first, do the best, regardless of the cost. From then on, Isaac Ho knew that the Southeast Asian technology market was about to change.
Alibaba, Tencent and Didi Chuxing carried out “enclosures” at an astonishing speed and scale and became industry giants: Alibaba and Tencent are among the top 10 companies in the world, and Didi Chuxing, which was only five years old, It defeated Uber. Now, as the growth rate of China's domestic market slows down and becomes saturated, these companies are beginning to look to the rest of the world. And the first stop is Southeast Asia: the population here is twice that of the United States, and it is also the region with the largest number of overseas Chinese.
According to estimates by PricewaterhouseCoopers, China's total investment in technology in overseas markets reached 37.8 billion U.S. dollars last year, a year-on-year increase of double. Among them, Alibaba acquired Lazada, a Singaporean e-commerce company, for US$1 billion. Now the company has become Alibaba's forefront of developing the Southeast Asian market. Tencent invested in Sea Ltd, the most valuable startup company in Southeast Asia. There is also news that Tencent is planning to invest in Go-Jek, an Indonesian ride-hailing company. In addition, Didi Chuxing invested in Grab, a taxi-hailing platform in Southeast Asia, and recently announced its internationalization strategy.
Initially, very little investment from Chinese companies went to Southeast Asia's technology industry. However, with the popularity of mobile devices and the rise of the middle class, Chinese technology giants have begun to pay attention to the Southeast Asian technology market.
In fact, the Southeast Asian technology market does need to be further explored. For example, although Grab and Go-Jek compete in the car-hailing application market, and Topedia and Lazada compete in the e-commerce field, there is no absolute leader yet. In contrast, China's search, e-commerce, social media, and taxi application markets have been dominated by Baidu, Alibaba, Tencent, and Didi, respectively.
To this end, Chinese companies have already launched actions. It is reported that Alibaba's domestic rival JD.com will invest hundreds of millions of dollars in Indonesian online market Tokopedia. Go-Jek is also contacting Tencent and plans to raise 1 billion US dollars. In Thailand, Tencent is strengthening its investment in the media industry. App Annie data shows that last year, Tencent's Joox was the most downloaded music app in Thailand, Malaysia and Indonesia. In January of this year, Tencent also formed a joint venture with digital content startup Ookbee.
So far, Alibaba has been the most active in the Southeast Asian market. Not only has it invested in Singaporean e-commerce company Lazada, but it will also build Malaysia's first logistics center outside of China. In addition, Alibaba's Ant Financial is laying the foundation for the financial network. Earlier this year, Ant Financial signed a strategic cooperation agreement with Ascend Money in Thailand to create a "Thailand version" of Alipay. In Indonesia, Ant Financial also reached a similar agreement with the media group Emtek.
Michael Linz, a partner of Golden Gate Ventures, an investment agency, said: “Alibaba was the first to focus on the Southeast Asian market. But now, more and more second-tier Chinese companies are also starting to focus on this market.”