A new model is shaking up ecommerce

Southeast Asia often looks to China for inspiration, but copying this new business model might not be so simple. [Open this email in your browser]( A new model is shaking up ecommerce --------------------------------------------------------------- Hello {NAME} When I was a kid, my two younger brothers would copy everything I did - from the clothes I wore and the way I spoke to the character classes I would choose in video games. China and Southeast Asia’s tech scenes have a similar relationship. Because of the comparable economic growth trajectories in both markets, business models that find success in the more mature China tend to also work out in Southeast Asia. However, as my brothers eventually found out, you can’t copy everything. Chinese ecommerce major Pinduoduo’s customer-to-manufacturer business model, for instance, may not be the most feasible approach for younger Southeast Asian startups to replicate. You can scroll down for more or jump right into the [full article](. In the meantime, here are your quick bytes for the day:  1️⃣ Google is taking on LinkedIn in India LinkedIn’s presence isn’t very strong in emerging markets like India, and it seems Google has taken notice. The search giant announced it was [expanding its jobs app]( Kormo Jobs, in the country to make it easier for millions of unemployed citizens to find entry-level jobs. The move could hurt LinkedIn, whose 24 million monthly active users in the country pale in comparison to Google’s reach of over 400 million Indian users. But whatever happens, India’s unemployed could very much use another app to help them find a job.  2️⃣ Taiwan says “no” to Chinese streaming giants Chinese streaming platforms iQiyi and Tencent’s WeTV are in hot water in Taiwan. The island is [planning to ban the operations of the two companies]( because they formed alliances with local broadcasters and distributors. These moves violate the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area, which limits the categories of goods and services Chinese firms can invest in on the island. The formal order will be announced on September 3 and will prohibit Taiwanese individuals and organizations from working with mainland Chinese video-streaming companies.  3️⃣ Huawei finds solace in Africa Huawei has been operating in Africa for more than two decades and has become instrumental to the continent’s growth ambitions. So it’s no surprise that amid boycotts from the US and several parts of Europe and Asia, the Chinese mobile technology company has managed to [garner unwavering support from the continent](. Some leaders within the region have even stood up in defense of the Chinese mobile technology company, calling it a victim of the US-China trade war.  4️⃣ SoftBank swoops in to rescue Oyo’s Japan business SoftBank has [dispatched two executives to help budget hotel chain Oyo]( right its virus-stricken business in Japan. Oyo is one of the largest startups in the venture capital firm’s portfolio and among the hardest hit by the pandemic. In June, the budget hotel chain slashed its regional presence in Japan by closing offices in provincial centers and is also looking to downsize its Tokyo headquarters.  5️⃣ Who’s taking over Hong Kong to become Asia’s next financial capital? Due to the recently imposed security law in Hong Kong, international financial institutions like Deutsche Bank are [moving their Asia headquarters elsewhere]( sparking a race among a number of Asian cities to become the next financial capital of the region. The legislative changes in Hong Kong aren’t only scaring away banks - tech companies whose business models rely on free speech and data security (including short-video app TikTok and Korean internet giant Naver) have also begun heading for the exits.  6️⃣ Korean startups challenge Apple and Google An alliance of startups in Korea are [petitioning]( for the Korea Communications Commission to investigate whether Apple and Google are violating laws related to in-app purchases. Since 2011, Apple has been forcing developers to use its in-app purchase system, through which the tech giant takes around 30% commission from purchases by users. Meanwhile, Google might apply an in-app purchase module and commission to every application on its platform.  --------------------------------------------------------------- Will we see a Southeast Asian version of Pinduoduo? The recent rise of social commerce served as a catalyst for an evolution in the Chinese ecommerce scene, spawning upstarts, such as Tencent-backed Pinduoduo, who’ve become serious threats to leading ecommerce giants Alibaba and JD.com. Several other startups have attempted to replicate Pinduoduo’s success, with even Southeast Asian players trying their luck. But the business model’s viability in the region [comes with a few caveats](. - A new concoction: Pinduoduo leveraged a social commerce model known as group buying, which encourages consumers to form teams when making purchases to obtain bigger discounts. But that’s not all the company is about - it also popularized a customer-to-manufacturer (C2M) business model, which cuts out intermediaries and connects manufacturers directly with consumers. In 2018, C2M companies in China made an estimated US$2.5 billion in sales - a number that is expected to grow to US$6 billion by 2022. - Enter Southeast Asia: The C2M model might be uniquely suited to China, which is widely considered as the world’s factory. But the country’s rising minimum wage has led more orders for labor-intensive products to look for locations with a cheaper workforce, including Indonesia and Vietnam. On the consumer side, there’s also an apparent increase in ecommerce demand across Southeast Asia. - Not so simple: Despite social commerce’s growth prospects in the region, the C2M model might not be the best approach for younger startups to pursue. Applying Pinduoduo’s model in Southeast Asia has two main issues: the high cost of logistics in the region and the low penetration levels of digital payments and mobile ecommerce. There are so many more points to consider, though. Learn more from this deep dive: [Explaining Pinduoduo, and whether the model can work in Southeast Asia]( Spread the word: [Facebook]( | [Twitter]( | [Linkedin](  --------------------------------------------------------------- Making things better down where it’s wetter Indonesia-based Aruna, a startup developing tech for the country’s marine and fisheries sector, said it has [raised US$5.5 million in new funding]( from East Ventures, AC Ventures, and SMDV. - Enabling fisherfolk: Founded in 2016, the startup’s ecommerce platform helps local fishermen and women export their products to more markets, potentially boosting their income. These include countries in Southeast Asia, East Asia, North America, and the Middle East. - Fishing in lucrative waters: Indonesia’s fish trading sector produces nearly US$6 billion in revenues a year, with US$4 billion coming from exporting. By 2022, Aruna aims to reach 5% of Indonesia’s export market, or about US$200 million. Currently, the company holds a 0.01% share of the country’s export market size, which represents roughly US$400,000. - Lots of fish in the sea: The company plans to use the new funds to scale its fisherfolk community ecosystem by expanding to more coastal areas. It also aims to scale its operations into new domestic and export business-to-business markets. Despite the ongoing pandemic affecting many industries globally, Aruna claims to have achieved 86x growth in revenue year on year during the first half of 2020.  --------------------------------------------------------------- If you have a startup, then you’re gonna wanna read this As a founder, you know you need to grab the attention of your customers and investors. But locating these people — especially the right ones — could be pretty challenging. So instead, let us bring them to you. By exhibiting in this year’s [Tech in Asia Conference]( you will be exposing your startup to over thousands of conference attendees. Want some numbers? We had more than 400 investors and over 3,000 decision-makers in last year’s event. So grab your opportunity: [Sign up today]( to get your pass at a limited-time offer of US$129 (original price is US$159).  --------------------------------------------------------------- Misc Happening - [Tech in Asia Virtual Conference]( from October 19 to 22. In our biggest annual event, we gather founders, decision-makers, and venture capitalists in one place so that you can get all the information and make the connections you need. Hiring - [Account Manager]( at IDN Media (Jakarta, Indonesia) - [Consumer Research]( at Ruangguru (Jakarta, Indonesia) - [Product Manager]( at SIRCLO (Tangerang, Indonesia)  --------------------------------------------------------------- Whether you’re rocking the day in pajamas or gym wear, share this email with your friends! And if you have any comments about our newsletter, hit us up [here](. Tech in Asia’s newsletters are handcrafted daily with love ❤️ - and sometimes powered by good coffee ☕. Today’s edition is written by Nathaniel Fetalvero, with contributions from Nicole Jao and Miguel Cordon. It’s edited by Jaclyn Teng. To ensure that you don’t miss out on the biggest tech news and analysis, add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Copyright © 2020 Tech in Asia, All rights reserved. Don't want to receive these emails anymore? [Unsubscribe](.