GoPizza takes on fast-food gaints with speedy expansion

In The Checkout this week, we look at GoPizza’s quick expansion and examine the regulatory challenges that Shopee faces in Indonesia. [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](. IN FOCUS In today's newsletter, we spotlight: - How GoPizza uses AI and robotics as it is [expands rapidly]( across Asia - The monopoly allegations against Shopee in Indonesia - Why Blibli’s shares outshone GoTo, Bukalapak last year --------------------------------------------------------------- Hello {NAME} I like pizza. Although I'm not a connoisseur, this Italian specialty is often my choice when I see it on the menu. However, I can’t just buy pizza anytime I want. That’s because it can be quite expensive in Indonesia - at least that's how I feel. This is exactly what GoPizza, a South Korean startup that offers more affordable pizza and serves it faster than incumbents like Domino's and Pizza Hut, is trying to address. GoPizza has swiftly expanded in Asia since it started out in 2016, setting up more than 200 outlets across Indonesia, Singapore, and other markets in the region. The company is even positioning itself to go up against fast food chains with similar price points like Subway, McDonald’s, and KFC. In this week’s Big Story, my colleague Melissa dissects GoPizza's expansion strategy. She interviewed its CEO and founder, Jay Lim, who talked about how his company uses AI and robotics in kitchen operations. Meanwhile, I discuss the monopoly allegations that Shopee faces in Indonesia in our Hot Take. The ecommerce firm is accused of favoring its own logistics service, Shopee Xpress, over other delivery options. -- Jofie  --------------------------------------------------------------- THE BIG STORY [South Korean startup serves pizza with AI and robotics. But is it a flash in the pan?]( While it has closed its pay-later business in Thailand, the cashback and rewards platform is expanding to Germany.  ---------------------------------------------------------------  THE HOT TAKE Shopee's in-house logistics under fire following monopolistic allegations Here’s what happened: - Shopee is under scrutiny from the Indonesian Competition Commission (KPPU) over [allegations of monopolistic practices](. - The ecommerce firm is accused of automatically directing users to affiliated shipping companies - particularly its in-house logistics service, Shopee Xpress - for deliveries. - If found guilty, Shopee could face a minimum fine of 1 billion rupiah (around US$64,000). Regulators could also dock a maximum of 50% from the company’s net profits or 10% from total sales earned during the evaluation period. Here’s our take: After TikTok Shop's run-in with Indonesian regulators in 2023, it's now Shopee's turn to be in the crosshairs of regulators. The KPPU may find that Shopee's actions are impeding competition because it favors its own logistics service, Shopee Xpress - now known as SPX Express. In contrast, shoppers on Tokopedia can choose their preferred shipping company and view their respective rates. But for free shipping services, Tokopedia also restricts its delivery options to certain courier companies selected by the seller. Shopee’s delivery process is similar to that of TikTok Shop and Lazada, which also has its own logistics unit. The platforms automatically select the delivery services, and consumers are unable to view the name of the courier company when placing an order. But KPPU appears to be investigating only Shopee over this issue - for now, at least. This comes amid the antitrust body's suspicions of a significant increase in the volume of shipments through the company's own logistics arm. In-house logistics has become the next growth area for ecommerce firms. Case in point: Shopee doubled down on expanding SPX Express since its launch in 2020. Operating their own logistics unit allows ecommerce players to keep costs low and gives them a moat for their platforms. They also get better control over the delivery experience and can extend shipping promotions to both sellers and customers. In Sea’s [Q3 2023 earnings call]( group chief corporate officer [Yanjun Wang]( noted that the company made "strong progress" in reducing logistics costs by 17% year on year for its Asian markets during the quarter. "We believe this to be an example of scale economics shared, where we drive down logistics costs with scale and pass the benefit of reduced shipping costs to our sellers and buyers," Wang said. This partiality for certain shipping companies among ecommerce firms appears to have frustrated third-party logistics (3PL) players. [J&T Express]( [Ninja Van]( [Flash Express]( and [AnterAja]( all reported sluggish financial results for their regional businesses in 2022. Without the backing of an ecommerce platform, 3PL players have to compete by offering lower shipping rates to attract consumers. The ecommerce logistics space in Indonesia is crowded with players such as J&T Express, JNE, Ninja Xpress, SiCepat, AnterAja, Tiki, Lion Parcel, Rex, and ID Express.  See also: [What Shopee’s breakup with Ninja Van, QuadX in the Philippines means for 3PL firms]( It is possible that Shopee would be required to make changes to its shipping process, such as opening up options for courier services so that SPX Express is not automatically selected. Shipment volume for SPX Express, however, is likely to decrease after such a move. According to a June 2023 report from Momentum Works, 35% to 40% of Shopee orders were fulfilled by its in-house logistics arm. In addition, the company will have to compete on prices with 3PL companies on its platform and may have to spend more on promotions like free shipping. This is not the first time that Shopee has been put under the KPPU's microscope. In June 2023, the company [decided to comply]( with regulator's order to fix the partnership system of its ShopeeFood drivers after issues regarding suspension and termination were raised.  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [TikTok Shop still in violation of local regulations, Indonesia minister says]( Teten Masduki, the country’s minister of cooperatives and SMEs, said that TikTok Shop is still allowing direct transactions on social media. 2️⃣ [Waresix cuts data, engineering staff]( The Indonesia-based logistics firm announced the layoffs during a town hall held on February 16. 3️⃣ [Singapore’s Qoo10 widens ecommerce reach with $173m Wish buy]( The sale comes after a strategic review sparked by pressure from activist investors of Context Logic, Wish’s parent firm, amid losses and other issues. 4️⃣ [Southeast Asia remains ‘very important’ for Alibaba, says its international CEO]( Despite recent layoffs, there’s still “significant potential” to deepen Lazada's reach in the region, parent firm Alibaba said in its latest earnings call. 5️⃣ [India-based B2B metal supply chain firm raises $15m series A]( Metalbook, which supports customers through their entire metal manufacturing and procurement cycle, said it was profitable. ---------------------------------------------------------------  FYI  1️⃣ [Why Blibli’s shares are outperforming GoTo, Bukalapak stocks]( The ecommerce firm’s shares on the Indonesia Stock Exchange jumped by 2.6% in 2023. While the increase is not significant, Blibli still performed better than its rivals GoTo and Bukalapak. --------------------------------------------------------------- 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 soon! [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 © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894