Carousell faces newcomers as SEA’s recommerce heats up

In The Checkout this week, we look at the niche players rivaling Carousell in recommerce and examine how healthcare can be a safety net for Amazon. [Read from your browser]( The Checkout 🛒 --------------------------------------------------------------- Welcome to The Checkout! Delivered every Thursday, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If you’re not a subscriber, get access by [registering here](. Written by Putra Muskita Journalist Hello {NAME} I have to admit I’m not the biggest recommerce consumer. While living in Singapore, I probably only used Carousell twice: once to buy a used Apple TV and another time to sell off some furniture when I was moving apartments. My wife, though, is the polar opposite - at least when it comes to clothes. She and her friends, who work in fashion, enjoy frequenting thrift stores. I never understood the appeal until she once bought a top from Italian brand Missoni for 10,000 rupiah (US$0.67 - not a typo). A new top of the same quality would have cost a few hundred dollars at the very least. She’s far from the only one who's enchanted with the concept. And for many consumers, participating in recommerce means killing two birds with one stone: saving the environment and your purse. As my colleague, Huong, writes in this week’s Big Story, this has led to a rise of niche recommerce companies across Southeast Asia that specialize in everything from clothes and sneakers to electronic devices. These companies take the fight to online classifieds platforms like Carousell, which has just shifted to recommerce lately for its next phase of growth. But all of them face the same challenge: becoming profitable. Meanwhile, in today’s Hot Take, I write about why Amazon is making its biggest expansion into healthcare. Amid slowing ecommerce growth globally, what are the implications for Asian ecommerce players? – Putra THE BIG STORIES  1️⃣ [Niche recommerce takes the fight to Carousell in SEA]( Carousell’s latest acquisition suggests that recommerce is gathering steam in the region. But other startups are determined to get in on the action.  2️⃣ [Pomelo nearly doubles revenue in H1 2022 driven by offline retail]( The Thailand-headquartered ecommerce firm is “reviewing multiple options internally,” with an IPO as one of the possible routes.  THE HOT TAKE Can healthcare rescue Amazon’s ecommerce empire? Here’s what happened: - Amazon recently announced it would [acquire]( One Medical, a consumer healthcare company, for US$3.9 billion. - One Medical, which went public in 2020, is an online-to-offline primary care provider that offers on-demand virtual care, in-person appointment bookings, and lab tests. - This new addition could eventually be integrated with Amazon’s existing healthcare strategies - such as providing an offline component to telemedicine offerings. Here’s our take: Healthcare is not a new realm for Amazon. Soon after acquiring a startup called PillPack, the ecommerce giant in 2020 launched Amazon Pharmacy, which lets shoppers buy prescription medicine online. There’s also telehealth service Amazon Care, which started as a service for Amazon employees before [expanding]( to serve consumers across the US earlier this year. One Medical is perhaps the biggest sign of Amazon’s commitment to healthcare, at least going by how much money the tech titan shelled out for the deal. But there are bigger concerns on the horizon. Global ecommerce growth is [slowing](. Indeed, the giant’s stock price has fallen to pre-pandemic levels, and it’s not unreasonable for other companies to brace for impact too. This leads us to two important questions: Can healthcare be a buffer for Amazon and will Asia’s ecommerce companies follow suit? Amazon’s rival in India has done just that. In March this year, Flipkart pumped nearly [US$700 million]( into its ventures in the sector and launched a [separate app]( for healthcare services. But in other Asian countries, ecommerce players have not been able to innovate healthcare beyond enabling consumers to buy drugs online. For one thing, the industry is heavily regulated - for very good reasons. In China, the healthtech units of major players like Alibaba, Tencent, and Ping An saw [stock prices tumble]( when state media called for greater oversight on online sales of prescription medicine. But in countries without universal government-backed health insurance, the sector is a very fragmented space, where longtime offline players from the private sector hold much power and/or market share. In Indonesia, where government-backed insurance is a relatively new concept, an online-to-offline approach like One Medical is yet to be seen - mainly because the blue-ocean opportunity is limited by and large to the online space. Local startups Halodoc and Alodokter have to partner with offline players like hospitals, clinics, and pharmacies to support most of their services. Spending is also low: In Southeast Asia’s three biggest markets of Indonesia, the Philippines, and Vietnam, healthcare spending ranges between [2.9% to 5.25% of gross domestic product]( far below what the US spends at 16.77% of GDP. See also: [The key actors in Southeast Asia’s soaring healthcare space]( There is one likely advantage for Halodoc: an entry point to the GoTo ecosystem, as Gojek is an investor in the startup. While Halodoc does work with Gojek for its medicine deliveries, so far, it hasn’t had any noticeable synergies with Tokopedia, which operates its own [healthcare section](. But back to Amazon: Will its strategy work? That remains to be seen. One thing to watch is whether Amazon can smoothly integrate One Medical with the rest of its ecosystem. Could consumers, for instance, take blood tests in locations run by fellow Amazon subsidiary Whole Foods? Or would they even want to? Pharmacies-slash-convenience stores like CVS and Walgreens have been present for decades, but the idea of combining your grocery trips with medical tests might not appeal to everyone. As Bloomberg [noted]( One Medical - which is still unprofitable - has 8,500 business clients and 767,000 patients. That’s a decent number, but compared to its new parent, a drop in the ocean. – Putra  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ Carousell and its investor Heliconia Capital [are jointly investing]( US$25 million into Indonesian recommerce firm Laku6 as part of an acquisition. 2️⃣ Shein has [shed US$30 billion in value]( since April as shareholders consider cashing out ahead of the company’s IPO. 3️⃣ Alibaba is [applying]( for a primary listing on the Hong Kong Stock Exchange while keeping its US listing. 4️⃣ Shopify will cut [10% of staff]( after its share price slipped on a lower-than-expected profit. 5️⃣ Zilingo has [laid off]( its entire team in the Philippines. 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. 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