In the previous few years, China‘two technologies giants Alibaba and Tencent have spent billions of dollars to secure major stakes in leading technology startups in Southeast Asia.
Investments by two Chinese giants have spurred growth and expansion, but have also forced changes in leadership and strategy. Essentially, Alibaba and Tencent are creating competitive tech ecosystems that mirror their competition in China and require local startups to decide on sides.
And for all its diversity – ethnic, cultural, religious and linguistic – Southeast Asia shares a very important feature with China: an emerging, tech-savvy middle class.
Ali Baba“E-commerce”.
So far, Alibaba has invested more boldly in Southeast Asia than Tencent. Alibaba made the primary major Chinese investment within the region’s technology sector in April 2016, when it paid $1 billion for a 51% stake in Lacingthe biggest e-commerce platform in Southeast Asia.
Alibaba has also made big bets Tokopedia, Indonesia’s largest e-commerce company. Tokopedia’s founders viewed Lazada as their most important rival and were expected to hitch forces with Tencent.
But in August 2017, thanks partly to the aggressive intervention of Softbank’s Masayoshi Son, an early supporter of Alibaba, Alibaba thwarted Tokopedia’s take care of Tencent, stepping in and leading a $1.1 billion financing round.
Plays Tencent games
Tencent, for its part, holds a 40% stake SEA, a Singapore-based gaming app that listed on the New York Stock Exchange in October 2017 and raised over $1 billion. Like Tencent, SEA derives most of its revenue from games and online services.
Transport: Grab vs Go-Jek
Tencent’s next big investment within the region is Go-Jekan Indonesian startup that began as an on-demand motorcycle service after which expanded into four-wheeled vehicle transportation.
Alibaba is reportedly in talks to speculate in Grab, a Singaporean ride-hailing company that may be a foe of Go-Jek.
Grab, co-founded by Harvard Business School colleagues Anthony Tan and Hooi Ling Tan, operates in eight Southeast Asian markets and dominates passenger transportation within the region, handling greater than $6 million in day by day orders.
Grab scored one other victory in March when San Francisco-based Uber announced plans to exit Southeast Asia and sell its entire operations within the region to Grab for $1.6 billion and a 27.5 percent equity stake.
Immediately afterwards, Go-Jek announced plans to speculate $500 million in expansion into these three markets and one other one where Grab operates, namely Vietnam.
In early June, Go-Jek investors including Tencent and Warburg Pincus offered the corporate an extra $1 billion in financing to compete with Grab, based on Bloomberg.
Source : Fortune
