Vietnam’s property slump hits PropertyGuru’s revenue

In The Checkout this week, we analyze the latest financial results from PropertyGuru and look at the rising momentum of EV sales on Tokopedia. [Read from your browser]( The Checkout 🛒 --------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, 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} There’s plenty of research saying that buying a house will be [difficult for millennials and Gen Z](. Current property prices are said to be unaffordable for younger generations. In addition, the availability of affordable properties is unable to meet market demand. Do these findings resonate with your experience? In Vietnam, the property market is in a slump as real estate developers are facing financing pressure due banks tightening their credit policies. This decline has also affected the financial performance of PropertyGuru, the Southeast Asian real estate listings portal. In its latest results for the first quarter of 2023, the company's revenue growth in Vietnam decreased by 34% year on year. PropertyGuru attributed this slowdown to the Vietnamese government's efforts to cool the real estate market, and said that addressing these measures will be the company’s main challenge in the immediate future. In this week's Big Story, my colleague Simon dissects PropertyGuru's Q1 2023 financials and how the market conditions in which it operates affect its business. Meanwhile, in the Hot Take, I examine the increase in electric vehicle (EV) sales on Indonesian ecommerce firm Tokopedia’s platform, in line with the rising adoption of EVs in the country. -- Jofie  --------------------------------------------------------------- THE BIG STORY [PropertyGuru looks past slowing revenue growth in Q1, talks up AI and M&A]( The proptech company’s revenue in the first quarter of 2023 was 16% higher than a year ago, but its adjusted EBITDA plunged by 60%.  ---------------------------------------------------------------  THE HOT TAKE Tokopedia sees momentum in EVs as sales grow Here’s what happened: - Electric car sales on Tokopedia [more than doubled]( while e-motorcycle sales were up almost 3x in the first quarter of 2023 compared to the same period last year. - Electronic control units and EV battery chargers were among the best-selling products in the EV category during the period. - The biggest increase in EV purchases on Tokopedia occurred in several regions outside Jakarta, including Sumatra, Bali, and Kalimantan. Here’s our take: The soaring sales of EVs is a breath of fresh air for Tokopedia. Among the top-three ecommerce platforms in the country, only Tokopedia sells new vehicles, both cars and motorcycles. The firm has collaborated with established auto companies such as Hyundai, Tesla, BMW, Suzuki, Vespa, and Viar to open official stores on the Tokopedia platform. These partnerships are important to build consumer trust in purchasing vehicles on the ecommerce site. Although Tokopedia didn’t disclose its overall vehicle sales, the growth in EV transactions could be a positive signal for the company. The transaction value for vehicles is certainly much larger compared to other categories. This can help the company attract high-quality consumers who aren’t solely price-oriented and are willing to make high-value purchases on Tokopedia. The EV industry itself is enjoying a favorable momentum, especially in Indonesia. The government is supporting EV adoption through policies such as an up to 10% value-added tax incentive for electric car purchases and a 7 million rupiah (US$470) subsidy for buying an e-motorbike. The government also plans to exempt EV owners from paying motor vehicle taxes starting in January 2025. It’s targeting [2 million EV units]( on the roads in the country by that year. As for infrastructure, there were [439 charging stations]( scattered across the country as of December 15, 2022. Although there’s potential, the challenge for Tokopedia in penetrating this market further is to attract more consumers. Many still prefer to shop offline because they want to touch and directly inspect the vehicles before making a purchase. Companies such as Carro and Carsome, which focus on selling used cars, have adopted the strategy of combining online and offline channels. In addition to their online platforms, they also have offline sites for consumers to inspect and test-drive vehicles. Moreover, Indonesian automotive giants such as Astra and Indomobil have also provided online purchasing channels. Their brands may be more recognizable among local buyers. Opening offline channels doesn’t seem feasible for Tokopedia at the moment, given the company’s current focus on achieving profitability. It has implemented efficiency strategies, such as cutting its workforce and deprioritizing the Mitra Tokopedia B2B offering, as well as running more targeted promotions and discounts. The company has also increased monetization on its platform by [raising service fees]( for merchants and consumers. Will Tokopedia be betting more on the automotive category? It seems unlikely for now. Focusing on segments that have proven to generate more revenue - such as [fashion, beauty, mom and baby, food and drinks, and household products]( - would make more sense. To leverage the momentum in EVs, Tokopedia could consider increasing the supply of products such as electronic control units and battery chargers, which are performing well. Additionally, it can expand partnerships with other auto companies. In doing so, the company can still achieve growth from the category while keeping costs at a minimum. With its rival, Shopee, having reached profitability, it's now Tokopedia's turn to prove that its business is also capable of turning a profit. -- Jofie  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [Indonesian social commerce firm banks $39m to expand in lower-tier cities]( Evermos will use the new capital to strengthen its reseller network by boosting market penetration in Java and expanding to Sumatra. 2️⃣ [Amazon aims to digitalize 10 million small businesses in India by 2025]( To date, the company has digitalized over 4 million small businesses and facilitated over US$5 billion in exports. 3️⃣ [ID cosmetics brand targets Malaysia after 4x revenue growth in 2022]( Rosé All Day Cosmetics is set to enter Malaysia, its first international market, in the second half of 2023. 4️⃣ [Alibaba’s Idle Fish launches new social features to boost secondhand trading]( The new features are designed to make it more fun and engaging for users to buy and sell secondhand goods. ---------------------------------------------------------------  FYI  1️⃣ [Why TikTok, Shopee, and Lazada are following in Temu’s footsteps]( Temu’s rapid rise has forced its more established competitors to take notice of the company’s “all-inclusive” version of the consignment model. 2️⃣ [Mapping SEA’s auto startups: Competition drives push into financing, EVs gain ground]( Automotive ecommerce players have expanded their services into financing as electric vehicles gain momentum in Southeast Asia. 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 on June 22nd! [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 © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894