Why China Tech Giants Are Expanding to Southeast Asia

China tech giants have become powerful force in global industry. Alibaba, Tencent, Baidu, and JD are 4 big tech companies coming from China. They are able to grow so quickly, thanks to China technology & internet super fast development, and the most important thing, they are able to become PROFITABLE. They can monetize their user very well, so even when about 10 years ago, people didn’t even heard Alibaba name, now they are so familiar with it, as well as its Founder name, Jack Ma.

china tech giants

This is some facts about these China tech giants :

  • Tencent currently is Asia most valuable company with valuation around $300 billion, also rank 10th as World most valuable companies list, the only one company outside USA companies that become top 10
  • Alibaba hold title as largest global IPO ever when it went public in 2014, bringing the total IPO to $25 billion
  • Baidu is the No. 1 search engine in China, controlling 80 percent of China’s market share
  • JD.com is the first Chinese internet firm on the Fortune 500 List (Year 2016), 366th spot on Fortune’s list, thanks to its $29 billion revenue last year.

After successfully capturing market in their home country, now they are looking for THE NEXT GROWTH PLACE. Two place that become options are INDIA and SOUTHEAST ASIA.

In India, the competition is very tight, china tech giants should ‘frenemies’ local home player like Flipkart, Snapdeal, Ola, Paytm, as well as US tech giants like Amazon and Uber.

Meanwhile in Southeast Asia, the competition is relatively ‘easier’. Southeast Asia is home for 600 million people. Local player like Grab, Gojek, Tokopedia, Bukalapak, hasn’t capture market share yet. Economic growth in the Asean 5 – Indonesia, Malaysia, the Philippines, Thailand and Vietnam – will exceed 5 per cent for the next decade.

With population around 260 million out of Southeast Asia’s 600 million people, Indonesia become the biggest market. Also the middle class society in Indonesia is growing rapidly become one of main reason it’s and will become hottest market for business.

You can see JD come to Indonesia with their own brand JD.ID, Alibaba invest in Lazada with 83% stake after $2 billions investment, Tencent funds around $100-150 millions for Gojek, Indonesia ride-hailing company.

gojek

Particularly in e-commerce sector, over the next 5-6 years, Southeast Asia B2C will go through further consolidation to end up in a one or two player game. Today, Lazada (majority stake owned by Alibaba) has a headstart with an alleged 20% market share. This just proves that Southeast Asia, particularly Indonesia, is ‘sexy’ market for them.

You can learn more through :

https://www.bloomberg.com/news/articles/2017-07-05/jd-lazada-square-off-in-indonesia-asia-s-next-e-commerce-prize

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