Time for sellers to move on from Shopee and Lazada?

The Checkout is Tech in Asia’s free newsletter that breaks down the biggest stories and trends in ecommerce. [Read from your browser]( The Checkout 🛒 Welcome to The Checkout! Delivered every Thursday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in ecommerce. If you’re not a subscriber, get access by [registering here](. Hello {NAME} An online marketplace is like a department store. But unlike the department stores where shoppers can browse at will, tech companies dictate the algorithms that control how products are showcased. This, in turn, depends on a variety of factors, including how much merchants pay to get their stuff ranked high in searches, of course. Online shopping has witnessed incredible growth over the past two years. Southeast Asia has added another 70 million digital consumers since the pandemic began, according to the [latest report]( by Facebook and Bain & Company. But getting on the online marketplace is not the most viable option for merchants or brands that want to manage the customer experience themselves and have better control over branding, products and data. In the US, anti-Amazon forces have been picking up. Some ecommerce players such as [shopIN.nyc]( or [Bookshop.org]( have been positioning themselves as pro-local stores and in opposition to Amazon. Other small businesses have turned to third-party ecommerce enablers like Shopify to build their own online independent stores. Amazon has become a retail beast, and while its marketplace can empower retailers, there’s a flip side to that. Among the risks include the possibility that the tech juggernaut, which owns retailers’ data, will launch competing labels. As Southeast Asian marketplaces like Shopee and Lazada continue growing, the region’s third-party sellers will also need to reduce their reliance on these players. This week’s big story explores how anti-Amazon forces in the US can inspire sellers in this part of the world to strike out on their own. -- Huong THE BIG STORY  [Anti-Amazon alliances inspire sellers who shun Southeast Asia's marketplaces]( Image credit: Timmy Loen Is it time for Southeast Asian merchants to grow outside Shopee and Lazada? TRENDING NEWS Check out Tech in Asia’s coverage of Asia’s ecommerce scene [here](. 1️⃣ [Bukalapak posts 35% revenue increase in first half of 2021]( The Jakarta-based ecommerce company has turned in its first report card after its historic public listing last month. For the first half of 2021, it reported a revenue of about US$60 million while narrowing its loss to about US$53.5 million, a drop of around 26% compared to the same period last year. Bukalapak is also [reportedly]( looking to partner with local billionaire Anthoni Salim, owner of Salim Group, a major conglomerate in Indonesia. Why it matters: Bukalapak’s growth momentum was driven significantly by Mitra Bukalapak, which serves the country’s warungs or mom and pop stores. The firm’s ecommerce marketplace grew only 4% while its Mitra business saw a 77% growth. The space to digitalize warungs is full of noteworthy competitors like Tokopedia, GudangAda, Warung Pintar, Ula - all of which have raised mega rounds. But it’s not easy to crack Indonesia’s vast landscape and connect wholesalers, suppliers, distributors and store owners in a capital-efficient manner. Analysts believe that only those who can monetize warungs’ data for financial services can have healthier margins.  2️⃣ [Shopee gets the ball rolling in India?]( Photo credit: Shopee It’s possible that Shopee has been gearing up for India, the billion-dollar market that already has heavyweights like Amazon and Walmart-backed Flipkart. According to a Reuters [report]( Sea has launched a recruitment campaign for merchants to sell on what it called Shopee India. One of the YouTube videos that Sea released reportedly mentioned free shipping and no commission fees for sellers and buyers in India. Why it matters: Sea has been keeping mum about its potential expansion to India, which is normal as the company prefers to lie low and wait for its turn to shine. Is it too late for Shopee to enter India? History might say otherwise. Shopee wasn’t an early bird for Southeast Asia’s ecommerce party, but it’s now leading in most of the markets it’s in. Shopee expanded to Latin America in late 2019, and it has become a powerful force in Brazil, which could be its biggest market by monthly active users, according to our [previous analysis](. Sea Capital is also looking to [invest]( in the region’s startups, a source told Reuters. But India is another matter. Amazon has shelled out billions since 2013 and still has not won it. To make things more complicated, the country is mulling [a ban on flash sales]( – a move that could have a profound effect on its online retail market. This suggests that Shopee should expect a strict regulatory environment in India. But Shopee has a track record of being the underdog. It is still a money burner for Sea, but it’s not the time to be worried. For now, the formula seems to be working: offer generous subsidies for consumers and merchants and then add financial services when its footing is more secure. Along with Shopee’s remarkable rise, Sea Group CEO and co-founder Forrest Li was just named Singapore’s richest person, with an estimated net worth of US$19.8 billion, according to [Bloomberg](. That’s plenty of good news.  3️⃣  [70 million more online shoppers for Southeast Asia since the pandemic: report]( Photo credit: Lazada Southeast Asia has gained about 70 million more online consumers since the pandemic, which is equivalent to the entire population of the UK, according to the [latest report]( by Facebook and Bain & Company. The report also forecasts that ecommerce sales will double to US$254 billion in the next five years. Why it matters: Southeast Asia will outpace China to become the fastest-growing digital economy in the Asia Pacific, according to Praneeth Yendamuri, a partner at Bain & Company and one of the report’s authors. Average spending in terms of gross merchandise value per digital consumer has shot up from US$135 in 2019 to potentially reach US$381 by the end of 2021. However, the report notes that unlike consumers in more mature markets, most shoppers in Southeast Asia still don’t know what they want or where to buy. They also show greater interest in trying new stores, which means brands need to take advantage of this paradigm shift to build loyalty instead of focusing only on discounts. 4️⃣ [Another $200m for Malaysia-based used-car platform Carsome]( Photo courtesy: Carsome The company has raised US$170 million in its latest round, bringing its valuation to US$1.3 billion. With the round, which also comes with new credit facilities of US$30 million, Carsome claims that it’s now Malaysia’s largest tech unicorn. Why it matters: The funds will help Carsome bolster its expansion efforts in the business-to-consumer segment, with more B2C retail centers slated to open this year across Malaysia, Indonesia, and Thailand. We previously mentioned that used vehicles might be the next ecommerce battleground, as illustrated in this Financial Times [article]( consumers are turning to online sites for better prices and due to disruption of the chip shortage to the global automotive supply chain. Carsome also needs to accelerate its expansion as Carro is also breathing down its neck. Check out this Tech in Asia report for further insights on Carsome and Carro’s rivalry.  5️⃣  [China to tighten rules on fake products on ecommerce sites]( It seems that China’s crackdown on all things tech has no end in sight. Earlier this week, South China Morning Post reported that draft amendments released by the country’s top market regulator propose more stringent measures for sites that sell fake products, including the potential revocation of their online business licences.  Why it matters: In 2018, China [passed an ecommerce law]( that subjected giants like Alibaba and Pinduoduo to heavy fines if they don’t take steps to remove merchants that infringe on intellectual property rights. The onslaught against China’s ecommerce, gaming, and ride-hailing sectors has given investors a hint at the government’s priorities. This Financial Times article suggests that investors are moving away from ecommerce (or consumer tech in general) to fund Chinese companies focused on microchips, software, and biotech. It might be time for the likes of Alibaba or Tencent - once the pride of China’s tech power - to find new growth momentum in regions such as Southeast Asia. STARTUP WATCH 1️⃣  [Ralali]( - Indonesian business-to-business marketplace Founded in 2013, the startup is aiming to raise US$50 million by the end of this year, according to [DealStreetAsia](. Ralali operates a marketplace similar to Alibaba that connects buyers, suppliers, and wholesalers across categories. 2️⃣  [1Bridge]( - India-based rural commerce startup Launched in 2016, 1Bridge is an ecommerce platform that delivers products and digital services to the doorsteps in villages. It [has secured]( US$2.5 million in fresh financing led by C4D Partners. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you next week! P.S. 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. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2021 Tech in Asia, All rights reserved. 51 Bras Basah Rd, #05-5061, Singapore 189554