If the rumors are true, Chinese titan Alibaba Group may be preparing to invest $500 million in Indonesia's largest online retailer, PT Tokopedia. According to Indonesia Investments, this expansion of Alibaba's holdings in ASEAN – which include last year's acquisition of a $1 billion, 83 percent stake in Singapore e-commerce platform Lazada Group SA – underscores Indonesia's importance as the region's leading market, which some are calling "the next China." In an interview with GetGlobal last year, Stuart Dean, Senior Advisor for ASEAN Advisory Pte Ltd, expressed his confidence, saying:
"Indonesia represents the greatest opportunity in ASEAN, accounting for roughly 40 percent of ASEAN’s population, and is the only big country in the region that is a member of G20. Also, governance has improved under Jokowi, whose ratings are high. Indonesia is also a huge commercial market with a growing middle-class that presents significant infrastructure and consumer opportunities. Companies like GE and P&G and others will be eager to take advantage of these opportunities in Indonesia and elsewhere across the region."
"It takes a great deal of effort to influence the bureaucracies in places like Indonesia, so these projects will take time, but persistence will pay off."
– Stuart Dean, Senior Advisor for ASEAN Advisory
Although Alibaba has remained tight-lipped on the veracity of these rumors, such a deal would effectively push a deal thought to be underway between rivals JD.com and Tokopedia off the table. Bloomberg reported on those rumors earlier this year, noting that Indonesia's eCommerce market is expected to climb from $8 billion this year to $65 billion by 2020.
According to a May press release from Bain and Company, the number of digital consumers in Indonesia jumped an astounding 50 percent last year to 200 million people. Bain further estimates that
"230 million individuals in Southeast Asia are now 'online engaged consumers,’ meaning they have at least researched products or services online. Another 300 million have a smartphone, due in part to a wave of lower-priced phones, which is helping to boost connectivity across the region, as is the focus on mobile – not fixed – broadband. In Indonesia, for example, 48 times the number of users are connected to mobile vs. fixed broadband."
For more insights into Indonesia and the ASEAN market, check out our interview with Stuart Dean and join us on October 25 - 26 in Los Angeles at GetGlobal's 2017 Conference.
(Cover photo: Donald Man/Flickr)