Tracking Southeast Asia’s thriving ecommerce logistics

In The Checkout this week, we look at the key logistics players in Southeast Asia and analyze the tie-up between WhatsApp and India’s JioMart. [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 Budi Sutrisno Journalist Hello {NAME} Right after college, I worked for a large textile manufacturer in a city near Jakarta. What impressed me was that the company didn’t outsource its logistics warehousing services. Handling logistics can be painful (financially and mentally), especially if you’re a smaller player trying to capture a slice of Southeast Asia’s booming ecommerce sector. Factoring in rising gas prices, even regional players like Lazada and Shopee, which have their own logistics arms, are struggling to keep logistics costs down. According to Tech in Asia data, as of August, the total deal value for SEA’s ecommerce logistics and enablers this year stands at around US$494 million, which significantly lags the US$7.8 billion deal value in the space for the whole of 2021. The funding winter might explain the slowdown but logistics is, despite all odds, still one of those must-watch backbone sectors. In this week’s Big Stories, my colleague, Jofie, explains the various business models of ecommerce logistics and enablers in Southeast Asia and the differences between them. He also dives deeper into Ninja Van, specifically. In 2021, the Singapore-based company almost doubled its revenue while cutting its losses. What drove Ninja Van’s standout performance? Meanwhile, for the Hot Take, I examine the implications of integrating WhatsApp and JioMart in India. – Budi  --------------------------------------------------------------- THE BIG STORIES 1️⃣ [The key ecommerce logistics players and enablers in SEA (update)]( Southeast Asia's ecommerce logistics and enablers have raised funding recently amid tech winter and rising gas prices. 2️⃣ [Ninja Van nearly doubles revenue in FYE 2021, while reducing losses]( The Southeast Asian logistics unicorn’s revenue growth outpaced its cost of services, resulting in a healthier gross profit margin.  ---------------------------------------------------------------  THE HOT TAKE  Why the WhatsApp-JioMart tie-up in India is a big deal Here’s what happened: - Consumers in India now can buy their groceries from JioMart via WhatsApp. - This is part of Meta’s [latest collaboration]( with JioMart, which is owned by Reliance Industries. - This is the first end-to-end shopping experience on WhatsApp, according to Meta. Here’s our take: Setting aside all the talk lately about its metaverse ambitions, Meta appears to still care enough about the real world - at least grocery shopping, in this case. Even Mark Zuckerberg put up [a personal post]( about the new feature. It’s about time the social media giant realized that WhatsApp could be a significant revenue generator going forward. Today, the app makes money mostly through [WhatsApp Business and WhatsApp Pay](. It ended its subscription model in 2016 and terminated a plan for in-app advertising in 2020. Analysts are suggesting Meta’s latest move might mirror that of China’s WeChat. Shopping on WeChat is huge: The company saw [transactions worth about US$391 billion in sales]( in 2021 alone through its 3.5 million mini programs, which are third-party services on its platform. During the pandemic, Chinese citizens, unsurprisingly, [relied on WeChat]( for groceries. Meta is smart to pick India as the first arena for this new initiative. WhatsApp has about over 400 million users in India, making it the app’s largest market in the world. More importantly, Reliance Industries, the parent conglomerate of JioMart, [plans]( to spend US$25 billion to roll out 5G across India - a move that could drive more users toward WhatsApp. Grocery retail is also [a lucrative segment in India](. The size of the Indian online grocery retail sector is expected to grow to between US$10 billion and US$12 billion by 2025, according to estimates from [McKinsey & Company](. Indian players like Zepto and Swiggy’s Instamart are [racing to capture]( the country’s US$300 million quick-commerce industry, which is expected to hit US$5 billion by 2025. These online grocers operate a hyperfast delivery model through a network of dark stores. If the collaboration between WhatsApp and JioMart works out in India, there’s no reason why Meta can’t replicate it in Southeast Asia, where the messaging app has over 120 million users. The region’s online grocery market is [expected to grow]( at a compound annual growth rate of 24% to reach US$11.9 billion by 2025. Nevertheless, Southeast Asia doesn’t have a clear winner in e-groceries yet. Shopee, Lazada, and Grab are still [fighting for dominance]( in one of the fastest-rising ecommerce categories in the region. The concern is that Meta doesn’t have a good track record in social commerce. The US giant has opted to [shut down]( the live shopping feature on Facebook as well as [its Instagram affiliate program]( starting from October 1 due to poor adoption rates. See also: [Indonesia’s social commerce startups double down on rural FMCG space]( The West’s lukewarm response to social commerce is worth noting. Even TikTok [has recently retreated]( from its expansion plan in Europe and the US after a poor performance in the UK. Still, with WhatsApp, Meta is still on a hopeful path. The company recently [invested in Singapore’s Take App]( the startup that enables merchants to sell via WhatsApp. For once, Meta may have finally realized the importance of testing first in Asia. – Budi  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ Shopee [has withdrawn]( a number of job offers for positions at its headquarters in Singapore, Pandaily reported. 2️⃣ China-based ecommerce enabler Jet Commerce [has raised]( US$60 million in a series B round led by Jinqiu Capital, Hidden Capital, and Zhejiang SilkRoad Fund. 3️⃣ Pinduoduo [posted a revenue]( of US$4.6 billion for the June quarter - an increase of 36% from the same quarter in 2021. 4️⃣ Tokopedia [has launched]( a subscription plan for unlimited free shipping, priority services, and faster order processing, among other benefits. 5️⃣ Traveloka [will soon close Traveloka Mart]( its e-grocery service, after only six months of operations.  --------------------------------------------------------------- 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. See you next week! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( 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 © 2022 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894