Indonesian D2C beauty brands go international

In The Checkout this week, we look at the regional strategy of Indonesia’s beauty brands and make sense of Tiket's expansion in Malaysia. [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 Jofie Yordan Journalist Hello {NAME} On weekends, I often accompany my girlfriend to shop for skincare and other beauty products. Even in this ecommerce age, she likes to go directly to stores to see and test the products first. Many beauty retailers offer this experience, including Sociolla. While it’s known first and foremost as an ecommerce firm, it has had an offline strategy as well, opening several stores across cities in Indonesia. Sociolla has since deployed that same tactic in Vietnam, its first overseas market. More than that, though, it has also brought over a couple of Indonesian beauty brands with it. In this week’s Big Story, my colleague Budi dissects how having a retail partner like Sociolla helps these brands cut down on complexities. Plus, even though there are ecommerce platforms that offer cross-border services (including Shopee and Lazada), there is an advantage to Sociolla’s model, which is an offline presence. That said, having a retail partner is not necessarily the only route for international expansion. Considering Indonesia’s scale, there is also an argument for winning the local market first. Meanwhile, for this week’s Hot Take, I examine Blibli subsidiary Tiket.com’s expansion to Malaysia. It’s a reasonable move for the Indonesian online travel agent at first glance, but questions abound. -- Jofie  --------------------------------------------------------------- THE BIG STORY [Indonesian D2C beauty brands build foundation for regional expansion]( Brands have leveraged Sociolla's network to gain exposure in Southeast Asia, and targeting certain beauty niches may have given them an edge.  ---------------------------------------------------------------  THE HOT TAKE Questioning Tiket’s ambitions to enter Malaysia Here’s what happened: - Tiket.com, a subsidiary of Indonesian ecommerce firm Blibli, has expanded into Malaysia. - As in Indonesia, Tiket will also offer online travel agent (OTA) services in the country. - The company established Global Tiket Malaysia on December 7. However, there is no further information on when the service will be launched. Here’s our take: Tiket initially announced its aspirations for [regional expansion]( in 2019, but it’s likely that the pandemic put a wrench in its plans. Now might be the best time to revisit this goal - not only is the travel industry recovering, but a part of Blibli’s roughly [US$510 million]( in IPO proceeds has been [earmarked]( for Tiket (as well as its other subsidiary, supermarket chain Ranch Market). At first glance, the company’s choice of Malaysia as its first overseas market makes sense. According to the [e-Conomy SEA report]( the gross merchandise value of the industry in Malaysia is projected to hit US$8 billion in 2025, up from US$5 billion in 2019. This is slightly smaller than the projection for Indonesia (US$10 billion) and Singapore (US$9 billion). However, questions arise once we look deeper. Tiket’s compatriot, Traveloka, expanded to Malaysia in 2015, along with several other regional markets. Yet, Malaysians still prefer players such as Agoda, Booking.com, and Trivago, according to a [Rakuten Insight survey](. This is also confirmed by third-party estimates, which place Traveloka below Agoda, AirAsia, Booking.com, Trivago, and Trip.com in terms of monthly active users so far this year. Perhaps the struggle for Traveloka has been to differentiate itself from what global players offer. Apart from Malaysia, the company also has a presence in Singapore, Thailand, Vietnam, and the Philippines. It is believed that Traveloka's success in Indonesia is because it offers native payment methods such as bank transfers and e-wallets, in addition to its strong brand in the country. However, this method may not be so successful in Malaysia because [credit card penetration]( is higher than in Indonesia. This means that Traveloka does not have a big differentiator compared to Agoda, Booking.com, etc. For Tiket, a big competitor is AirAsia owner Capital A. The company has launched a [hotel booking service]( in Malaysia, which will certainly be a direct challenge for Tiket considering Malaysia is AirAsia’s home market. For now, though, Tiket has shared scant details about its expansion plans, but it’s likely that it will have to come up with a different playbook than Traveloka if it wants to win these overseas markets. But how much is Blibli willing to invest, especially as a newly public company? Blibli’s IPO prospectus showed that the company only had a runway of less than 1 year as of June 30 this year. See also: [Is Blibli’s IPO a risk worth taking?]( But from another angle, Tiket’s expansion may just be about achieving parity with its rival. In Indonesia, the [Rakuten survey]( revealed that Tiket is in second place among the most popular OTA apps, just below Traveloka. If it cannot take over the top position from Traveloka in Indonesia, then at least it has made similar inroads for a regional expansion, which could boost its parent firm’s reputation among retail investors (at least in the short term). Could it also be about more than just Tiket? Perhaps the company’s entry into Malaysia can serve as a testing ground for Blibli as well as its parent firm Djarum Group. The conglomerate has had a presence in Malaysia before with its video-streaming platform Mola TV. For now, Blibli’s ecommerce unit is unlikely to follow Tiket's steps to expand overseas. As the company laid out, it will focus on strengthening its [omnichannel services]( in Indonesia, aiming to open 300 offline stores across the country by 2024. – Jofie  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ JD.id, the Indonesian joint venture of Chinese ecommerce major JD.com and Provident Capital, has [laid off 30%]( of its staff, or around 200 employees. 2️⃣ AnyMind Group, a Singapore-born ecommerce enabler, has decided to [delay its listing plans]( on the Tokyo Stock Exchange due to “risks and disclosures” in its business activities. 3️⃣ Vipshop, one of China’s largest discount retailers, officially [launched its services]( in Southeast Asia on December 8. 4️⃣ Paris-based Vestiaire Collective, the luxury fashion platform helmed by ex-Lazada CEO Maximilian Bittner, has [secured a US$79.1 million]( credit facility from Crédit Agricole CIB, Societe Generale, HSBC, Bank of America, and Goldman Sachs. 5️⃣ Shein, the Chinese fast fashion retailer, is [exploring moving beyond its conventional business]( of selling its own brand apparel into a marketplace platform that will enable other merchants to sell directly to customers. 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