This weekly newsletter chronicles top digital themes and trends playing out in SE Asia, especially Indonesia. We will decode policy and regulatory changes affecting digital economy sectors, crunch earnings data of top players, track developments related to gig economy workers and attempt to piece together ecosystem buildouts in some of the fastest-growing, venture-backed plays. You can access the previous editions of the Vantage Point weekly posts here.
Executive Summary
- Capital injections into Lazada come at an opportune time
- TikTok’s trouble in Indonesia was an accident waiting to happen
- Grab acquiring Trans-cab brings synergies and profits
- Indonesia’s private healthcare assets on PE radar
- Indonesian retailer Erajaya lifestyle to soon list on IDX
Capital injections into Lazada come at an opportune time
SE Asia’s number two e-commerce player Lazada has received an additional injection of capital of $845.44 million from its Chinese parent Alibaba.
This latest capital injection will be the third this year, bringing the total amount raised in 2023 to $1.9 billion, according to ACRA filings. This follows a total capital injection from Alibaba in FY2022 of $1.6 billion.
Lazada, which continues to rank as number two in SE Asia for e-commerce after Shopee, falls in third place after Shopee and Tokopedia in the region’s largest market Indonesia, with social commerce market disruptor, TikTok, snapping at its heels.
Shopee ranked number one in SE Asia in FY2022 with GMV of $47.9 billion, accounting for 48% of the region’s GMV, while Lazada came second with $20.1 billion and Tokopedia at $18.4 billion for Indonesia only, according to a recent report from Momentum Works.
According to the report, Indonesia accounts for more than 50% of the region’s GMV. TikTok has been most active in Indonesia generating around $2.5 billion out of the $4.4 billion generated in SE Asia. This is still a relatively small number compared to the major players but it is targeting a GMV of $15 billion in 2023, which would pose a more meaningful competition.
Despite the major capital injection last year, Lazada actually saw a marginal decline in GMV in 2022 due to reduced average order value (AOV), which is now estimated at $8-10. At the same time, the platform saw its losses reduce by 25% YoY in FY2022.
