Competition gets tougher as more companies announce fundraising effort, after Alibaba’s move in buying controlling stake in Lazada
Chatter is still rife in Southeast Asian tech ecosystem about Alibaba Group’s recent move to buy controlling stake at e-commerce platform Lazada – as the deal marks the beginning of an even tougher competition climate.
In Indonesia particularly, last week women-focussed e-commerce platform Orami announced that it is looking to raise new funds to help them acquire new companies, but they are not the only ones who are publicly declaring their fundraising efforts after Lazada’s big announcement.
For companies who are competing directly with Lazada, the new funding can help them to get ahead in competition either through mergers and acquisitions as favoured by Orami, or by strengthening distribution lines in cities outside of Jakarta as planned by Blibli.
But for companies working in the subsector that supports e-commerce platforms — such as courier service — ramping up hiring is more favoured to seize upcoming partnership opportunities.
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As one of the e-commerce platform that will be competing directly with Lazada, Blibli realised that it needs to ramp up efforts to strengthen its distribution chain.
DailySocial reported that it is aiming to raise US$75.7 million with the specific aim of improving distribution chain.
Citing logistics and distribution system as a fundamental element of online marketplaces, CEO Kusumo Martanto stated that the company plans to begin building three new warehouses by end of 2016.
In the longer run, the new funding will be used to build six distribution warehouses and 200 fulfillment centres outside of Jakarta, targeting cities such as Surabaya, Bandung, Medan, Makassar, Semarang, Banjarmasin dan Balikpapan.
GDP Ventures is the leading investor in Blibli, and Martanto has been reported saying that the company’s current investors are committed help it raise new fundings.
On the transportation sector, Go-Jek is also looking to top-up its war chest. The ride-hailing app company has been dabbling in logistic service through its personal courier service Go-Send and truck-based logistics service Go-Box. It also partners with e-commerce platforms such as Tokopedia and even Lazada itself, to handle their logistics services.
Go-Jek CEO Nadiem Makarim spoke to Reuters that the company’s past promo efforts –in form of setting fares for as low as IDR10,000 (US$0.7)— had become “unsustainable in the long run”, causing it to “run out of money.”
He also stated that several investors have already expressed interest to invest in the startup, due to its size and potential.
The company plans to “broaden its reach and add more drivers.”
Recently, Go-Jek sparked controversy among Indonesian Netizens with its recruitment video, in which Makarim called for current uberMOTOR and GrabBike drivers to join the company instead.
Image Credit: Gratisography
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