Behind Indonesia’s 15-minute grocery deliveries

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](. Written by Nikita Puri Ecommerce Journalist Hello {NAME} For a brief few days, my evenings involved puzzle-solving at Indonesia’s minimarket chains - Alfamart and Indomaret - trying to guess from the packaging what the food inside tasted like. After all, half of the fun of being a tourist in a foreign country lies in the joy of discovering what treasures the local supermarket aisles hold. And to have those treasures delivered in 10 to 15 minutes? That’s a separate ball game altogether, as my colleague Jofie details in the Big Story for this week. As a customer making the best of India’s supercharged [quick commerce scene]( it’s interesting to see how its Indonesian counterpart is aggregating the best parts of multiple models in the grocery delivery space. Finding that sweet spot between sustainability and growth is the goal for those in the grocery delivery space. But sometimes, it doesn’t matter if your strategies and execution are on point, or if you’ve got the right number of downloads, active customers, or sellers on your platform. In some cases, something behind the stage just isn’t right. Thumbs up to those who’ve guessed we’re talking about Shopee India. More on this in today’s Hot Take. -- Nikita  THE BIG STORY  [The rise of quick commerce in Indonesia]( Image credit: Timmy Loen Fifteen-minute instant grocery deliveries are taking off in Indonesia, where new players have emerged. But achieving success means performing a delicate balancing act. THE HOT TAKE  Making sense of Shopee’s hasty exit from India Here’s what happened: - Shopee is winding down operations in India. - Shopee’s active users in the country hit nearly 12 million in March, up from about 1 million in October last year. - The exit comes at a time when the company is looking to reduce its burn rate and shut newer markets that are not “slam dunk” wins. Here’s our take: It’s been a month of hard calls for Sea - after Shopee [closed shop in France]( in early March, its Indian unit ceased operations on Tuesday, about six months after it entered the country. Shopee India had [a quiet start](. It launched with the promise of free shipping and no commission fees for sellers - a fee that ranges from 12% to 18% in Brazil, where it launched in 2019. Months into India, Shopee had onboarded [20,000 sellers and 300 employees](. The platform had a clear plan of action - to reach India’s “underserved buyers and sellers,” as Sea Group CEO [Forrest Li said]( during an earnings call around the time Shopee launched in the country. Further proof of how Shopee’s attention was on India’s lower-tier cities: Prices on the platform started as low as [9 rupees]( (US$0.12) for non-branded products. Not surprisingly, Shopee became the second most downloaded shopping app in India soon after its launch. Visual – top 5 shopping apps in India by downloads The platform ticked all the right boxes but the odds were stacked against it from the very beginning. For starters, the Confederation of All India Traders (CAIT), a traders’ association, has been calling for a ban on Shopee [since December 2021](. A spokesperson for the traders’ association told Tech in Asia then that Shopee had masked its Chinese roots to operate in India following [new FDI rules in the country]( that address cases from countries India shares a border with. India and China not only share a border, but it's also been the site of clashes recently. But Shopee, or its parent Sea Group, is Singaporean and not Chinese, as the platform has clarified several times to no avail. In fact, the [Indian government banned Garena’s Free Fire]( in February following a crackdown on apps with links to China. Sea co-founder Gang Ye had also flown to India to [discuss the ban]( on Free Fire. Diplomatic intervention was tried, too, with [Singapore’s government reaching out]( to its Indian counterpart following the ban. But there’s been no olive branch from the latter, at least not in the public eye. Sea has maintained that Shopee’s exit is owing to “global market uncertainties.” Given the uncertainty, there was always a fear that the Free Fire ban could [extend to Shopee](. CAIT puts the onus for all this on Sea’s connection to Tencent, [saying it gives]( the latter significant control and access to Indian data. But the government’s attitude may have little to do with Tencent’s 18.7% stake in Sea. The Chinese tech giant also backs Byju’s and Udaan, for instance. Paytm is supported by Alibaba, while Zomato has Ant Financial. [Examples abound](. But none of these companies have had to go up against a vociferous CAIT-like association, which has been batting against Shopee from the start. CAIT has also been vocal about discounting tactics at Amazon India and Walmart-owned Flipkart, and it had filed a case with the Competition Commission of India against Shopee for the same reasons. The allegations were dismissed because the company wasn’t [a dominant player in the Indian market](. Sea’s stock had [rocked after Free Fire was banned]( in India with the firm shedding US$16 billion in market value. Sea had actually leveraged Free Fire to promote Shopee’s platform in Brazil, offering players rewards in exchange for using the platform. Analysts at CGS-CIMB [estimate at least US$60 million]( in savings per quarter for Sea after the India exit. Shopee has [reportedly]( burnt nearly US$200 million in less than five months to match pricing among stiff competition. It comes as no surprise that Sea would cut its losses and focus on markets where there’s no sword of uncertainty hanging over it. As Angus Mackintosh of CrossASEAN Research [put it]( “India has probably proved to be more trouble than it’s worth given policy unpredictability.” On the upside, the market supports Shopee’s move to withdraw from India: After news of the exit, Sea’s stocks surged as much as [9.7% on Tuesday](. – Nikita  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of Asia’s ecommerce scene [here](. Image credit: Timmy Leon  1️⃣ JD Logistics plans to [raise up to US$1.1 billion](. The logistics arm of JD.com is looking to raise the amount through a US$700 million share placement with its parent firm and a US$400 million primary capital raise. 2️⃣ BeepBeep, a Singapore-based quick commerce firm, has [raised US$6 million]( in a pre-seed funding round led by Genesia Ventures earlier this year. Founded by ex-Delivery Hero and Lalamove executives, it currently operates in Singapore, Malaysia, and Vietnam, and has plans to expand to other countries in Southeast Asia. 3️⃣ GrowSari, a B2B ecommerce platform based in the Philippines, [has raised an additional US$32.5 million]( as part of its series C fundraise following the US$45 million it secured in January. 4️⃣ Citymall, an India-based social commerce startup, [has raised US$75 million]( in a series C round led by Norwest Venture Partners. The platform caters to consumers in Tier 2, Tier 3, and Tier 4 towns and provides income opportunities to a network of microentrepreneurs. FYI  Photo credit: Terje Sollie  [Is ecommerce and social media the next big frontier for luxury fashion?]( Alibaba Tmall's Luxury Pavilion and JD.com are racing to cater to shoppers with deep pockets - both have onboarded over 200 luxury brands. Meanwhile, Amazon has less than 50 - it doesn’t have the best branding for luxury products, and it may not have the luxury to take this segment lightly. 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 your “edit profile” page and choosing that option in our preference center. 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! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. 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