The digital arena in Southeast Asia is feeling the heat, and not just from its tropical climate. While the internet economy is still growing, the pace has slackened considerably. Recent research from Google, Temasek Holdings, and Bain & Co suggests the internet economy will grow only 11% this year to hit $218 billion, the slowest rate since 2017. That’s – a little concerning.

Over 70% of online spending is thanks to the top 30% high-value users

But that’s not the entire story. What’s truly interesting is the unequal distribution of this digital spending. Over 70% of all online spending comes from the top 30% high-value users, who are primarily concentrated in big cities. In simpler terms, if you’re an internet company targeting the Southeast Asian market, you’re likely fishing in a small, albeit wealthy, pond.

In a region that’s home to more than 650 million people, why is the digital economy so skewed towards the urban elite? One reason could be rising inflation and interest rates, making consumers more cautious with their wallets. But that doesn’t entirely explain the digital divide. The investment climate also mirrors this caution. Private funding for companies in Southeast Asia has nosedived to a six-year low. Investors who hopped on the Southeast Asia bandwagon five to seven years ago are now seeing only a 4% return on average, a far cry from the 50% in China and 40% in the U.S.

So, where does that leave internet giants like Grab, Sea, and GoTo? Facing intense competition in urban markets while still struggling to tap into the vast yet untapped rural consumer base. With e-commerce estimated to reach just $186 billion by 2025, these companies may have to rewrite their growth strategies.

The digital landscape in Southeast Asia is more than just numbers and percentages; it’s a tale of a growing divide, a challenge to innovators, and a test for investors. And for now, it’s the big cities taking home the lion’s share of the digital pie.

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(Via)

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Besides Etsy sellers affected by the sudden shut down of Silicon Valley Bank(SVB), many more American companies and businesses have revealed recently that they were affected by the collapse of SVB. Amongst those banking with SVB, the most notable are Vox Media, Roblox, Roku and Circle.

Vox Media

Let’s start with the most famous one in tech circles, Vox Media. Vox Media is the parent company of The Verge – the popular online technology news outlet based in the United States, Vox – the viral American news and opinion website, and Polygon – the entertainment news website that covers news from the video game industry, as well as movies, comics, television and books.

The New York Times reported that Vox Media had a substantial amount of its operational cash in Silicon Valley Bank. The Vox Media personnel who was familiar with New York Times also told that Vox Media’s credit cards, which Silicon Valley Bank issued, had stopped working on Friday.

The personnel also claimed the company does not expect any disruption to its business yet, including payroll to its employees. Penske Media, Vox Media’s largest shareholder, said in a statement that it was ready if the company required additional capital but added that it didn’t foresee any issues for the time being.

Roblox

Roblox, the 21st century viral online game platform and game creation system, has also been affected by Silicon Valley Bank’s shutdown by regulators. According to Forbes, Roblox Corporation held 5% of its $3 billion in cash (150 million USD) at the bank. However, according to a filing, the video game company said SVB’s collapse will “have no impact” on its day-to-day operations.

Unity

Unity Technologies, the American video-game technology maker widely known for its video game engine, Unity, disclosed to authorities in the country today that the company held less than 5% of its cash and cash equivalents at Silicon Valley Bank and expects “minimal impact” from the bank’s collapse.

However, Unity Technologies has swiftly informed its video game publishers using Unity via email to swiftly update their payout institution from SVB to other banks before March 20, 2023 to avoid delays in payments.

Roku

Roku is an American corporation that offers Roku TV, its hardware digital media players, and a service of releasing streaming media content on its TV players.

Roku showed much concern in its SEC filing. The company reports that 487 million USD of its cash was within SVB, which is 26% of the company’s assets. What is more worrying is that Roku’s deposits with Silicon Valley Bank are largely uninsured. At this time, Roku does not know to what extent the company will be able to recover its cash on deposit at SVB.

Circle

American Cryptocurrency firm Circle, the owner of stablecoin USDC, had a massive 3.3 billion USD invested with Silicon Valley Bank, the company revealed in a tweet. That’s around 8 per cent of the company’s total $40 billion, which is held elsewhere.

Circle, stated in a statement, “Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by the state and Federal regulators.”

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(Source, Source 2, Via 1, Via 2)

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Etsy, the American e-commerce platform famous for DIY handmade or vintage items and craft supplies, is reportedly struggling to pay its sellers on time after the collapse of Silicon Valley Bank(SVB) yesterday.

Sellers on the Etsy platforms reported on Reddit and Twitter today that payments that were due to be credited to their bank accounts yesterday have not been credited by Etsy. In turn, Etsy has sent out an immediate email informing affected sellers, there is a delay in issuing payments to its sellers of the platforms, and the company is currently working with its other payment partners to resolve the matter as soon as possible. 

No concrete day or date was mentioned for how long the delay would last, so it is assumed that Etsy sellers’ funds they earned from selling their products on the website have been withheld by Etsy indefinitely. Thus, this is the first major effect of the SVB bank collapse that has impacted the general American consumer market.

Upon receiving the email, sellers were expressing their concern and anger on social media. Some sellers also went out to report the Etsy payment delays to news outlets such as NBC News, claiming that the Etsy delays will have a “catastrophic effect” on their business. 

NBC quotes American small business owner, Owen McKinney, who runs Kentucky Country Home laser engraving business, that he relies on Etsy’s deposits to pay for items like shipping costs and materials. Because of the Etsy delay, he had already reached out to one of his suppliers to delay an order for materials that he needed for next week.

As per official info online until 31 December 2022, Etsy had over 100 million items in its marketplace and the online marketplace for handmade and vintage goods connected 7.5 million sellers with 95.1 million buyers. In the fiscal year of 2022, Etsy garnered revenue of US$2.6 billion and registered a net loss of US$694 million, as a blitz scaled tech startup. 

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• OnePlus Ace 2V is available for Pre-Order on Giztop

(Source 1, Source 2, Via)

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On Monday, January 23 2023, Amazon announced that it is bringing its air cargo operations to India. This will build towards expanding the company’s logistics division in the country, while also looking to cut costs in other divisions in light of an economic recession looming over the not-so-distant future.

The company will employ two Boeing 737-800 aircraft flown by Quikjet Cargo Airlines to ship packages between Hyderabad, Bengaluru, Delhi and Mumbai – some of the biggest cities in the country. Sarah Rhoads, Vice President of Amazon Global Air, stated that Amazon Air would allow the company to provide faster deliveries to customers in India. Being the biggest e-commerce platform in the country currently, Amazon clearly wants to focus on customer-centric decisions. 

The reason for the expansion can be attributed to Amazon CEO, Andy Jassy, who conducted a comprehensive review of the company’s expenses due to a deteriorating economic outlook and declining retail sales. However, Jassy has previously indicated that the company will continue to invest in long-term opportunities such as stores, advertising, and cloud computing. The company also recently tested its new Prime Lite Membership in India, which acts as a budget-friendly alternative to the more expensive Amazon Prime subscription.

Amazon Air, which debuted in 2016, outsources operations to various airlines, and it enables Amazon to have more control over the speed and cost of deliveries. This service has been expanded to provide one-day, and same-day deliveries in more areas within the U.S.

India is the third market and the first operation in Asia for Amazon Air. Amazon has been working to increase its presence in India for years, which is predicted to become one of the fastest-growing e-commerce markets in the world owing to the population of the country. Speeding up deliveries throughout the country will ensure the loyalty of a huge customer base, that’s for sure.

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Flipkart, India’s homegrown online marketplace and the biggest competitor of Amazon in the country, could be slapped with a massive fine. The Enforcement Directorate Agency, India’s finance-crime agency, has asked Walmart-owned Flipkart and its founders to explain why it shouldn’t face a penalty of $1.35 billion.

The agency is alleging violation of foreign investment laws, claims a report from Reuters which is citing three people and an agency official as its source. The unnamed official of the agency says that the case concerns an investigation into allegations that Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was prohibited under law.

The development comes at a time when Flipkart is already facing regulatory issues, tougher restrictions, and antitrust investigations in India. On top of that, complaints from smaller sellers are also growing.

The notice to the company was issued last month by the agency’s office in Chennai. Along with Flipkart, its founders Sachin Bansal and Binny Bansal as well as investor Tiger Global have received the so-called “show causes” notice. It asks to explain why they should not face a fine of ₹100 billion (approximately $1.35 billion) for the lapses. They reportedly have 90 days to respond to the notice.

Commenting on this development, A Flipkart spokesperson said to Reuters that the company “is in compliance with Indian laws and regulations,” adding that the company “will cooperate with the authorities as they look at this issue pertaining to the period 2009-2015 as per their notice.”

The Enforcement Directorate in India has been investigating e-commerce giants Flipkart and Amazon for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

Flipkart, founded in 2007 by Sachin Bansal and Binny Bansal, was acquired by retail giant Walmart in 2018 for $16 billion. At the time, Sachin Bansal sold his stake to Walmart while Binny Bansal retained a small stake. The company raised a $3.6 billion funding round in July, valuing the Indian e-commerce giant at $37.6 billion.

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India has proposed banning flash sales on e-commerce platforms and preventing affiliates of the e-commerce entity from being listed as sellers, in a bid to tighten rules that could severely hurt the prospects of Amazon and Walmart’s Flipkart in the country.

The proposed rules from the Ministry of Consumer Affairs come amid complaints by brick-and-mortar retailers that foreign e-commerce players are bypassing Indian laws by using complex business structures. They are raising their voice against the alleged unfair practices by Amazon and Flipkart to expand their operations in India.

The rules say that e-commerce companies should not hold flash sales in India. For those who are unaware, flash sales are hugely popular during the festive season but have faced anger among offline sellers who say they cannot compete with the deep discounts online.

It also adds that e-commerce firms must also ensure that none of their “related parties and associated enterprises” are listed as sellers on their shopping websites, and no related entity should sell goods to an online seller operating on the same platform.

Similar to the recent IT rules, India is also proposing the e-commerce firms appoint a Chief Compliance Officer, a nodal contact person for 24×7 coordination with the law enforcement agencies, and officers to ensure compliance to their orders as well as a resident grievance officer for redressing of the grievances of the consumers on the e-commerce platform.

With the new rules, Amazon, Flipkart, and other similar e-commerce platforms may be prohibited from running their private label brands as it asks firms to ensure that none of their related and associated parties are listed on their platforms as sellers for selling to customers directly.

Currently, India does not allow e-commerce firms to hold inventory or sell items directly to consumers. To bypass this, the companies are operating through joint ventures with local companies that operate as inventory-holding firms.

In response, Amazon has said that it is reviewing the proposed policies while Flipkart hasn’t commented on the matter. The proposal, which is applicable to both Indian and foreign players, is open for public consultation until July 6.

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Alibaba Group Holdings Ltd, the tech giant in China, has been slapped with a record 18 billion yuan, approximately $2.75 billion, after a probe related to anti-monopoly found that the company abused its dominant market position for years.

The State Administration for Market Regulation in China said that it had determined that Alibaba, which is listed in New York and Hong Kong, had been “abusing market dominance” since 2015 by preventing its merchants from using other online e-commerce platforms.

This practice violates China’s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator added. Apart from the highest-ever antitrust penalty globally, the company has been asked to make “thorough rectifications” to strengthen internal compliance and protect consumer rights.

The fine imposed on the Chinese tech giant accounts for about 4 percent of Alibaba’s domestic revenues in 2019, reports Reuters. It comes amid a crackdown on technology conglomerates and indicates China’s antitrust enforcement on internet platforms has entered a new era.

Alibaba came under intense scrutiny in its home country after the company’s billionaire founder Jack Ma’s stinging public criticism of the country’s regulatory system in October last year. A month later, authorities scuttled a planned $37 billion IPO by Ant Group, Alibaba’s internet finance arm, which was set to be the world’s biggest ever.

In December last year, the State Administration for Market Regulation (SAMR) announced its antitrust probe into the company. After this record fine, Ant Group still needs to agree to a regulatory-driven revamp that could significantly cut its valuations and rein in some of its freewheeling businesses.

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Amazon, the world’s leading online retailer, has announced the acquisition of Selz, which makes tools to help businesses launch their own online stores. With this, the retail giant has now entered the territory of Shopify.

A blog post published by Selz to announce this new deal reveals that Amazon had bought the e-commerce platform last month, on 15th January. However, the deal wasn’t publicly announced by Amazon at the time.

Confirming the acquisition, Martin Rushe, Founder and CEO of Selz, said: “We have signed an agreement to be acquired by Amazon and are looking forward to working with them as we continue to build easy-to-use tools for entrepreneurs.”

While Amazon has also confirmed the deal, the company has not revealed terms or financial information related to this acquisition. Selz founder said that “nothing is changing” for the customers as a result of the Amazon acquisition.

It remains to be seen how Amazon is planning to utilize Selz. The company’s tools could give the U.S. e-commerce giant a competitive edge against the likes of Shopify and BigCommerce, among others.

Selz was founded in 2013 and is based in Sydney, Australia. The company provides small- and medium-sized businesses a platform to launch their own online stores and add online payment options to existing websites, among other tools.

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HMD Global, the Finnish company that is making and selling smartphones under the Nokia brand, has now launched its own online store in the United States, enabling the brand to sell its devices directly to the customers.

The launch of Nokia’s online stores comes just in time for the holiday season. The company is also offering delivery before Christmas, i.e. 25th December for some models, if the order is placed by 19th December.

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Ignoring the holiday season shipping, the company has promised to offer two-day free shipping to everyone, without charging the customer anything for shipping. It’s noteworthy that the eCommerce stores of Nokia don’t sell all the smartphone models and clicking on some models will redirect users to another store.

Currently, the company is selling Nokia 8.3 5G, Nokia 3.4, and Nokia 225 4G smartphones and Nokia Power EarBuds directly on its website. For all the other products, customers will be redirected to Amazon, BestBuy, etc.

It should be interesting to see how this works in the market where most of the users are dependent on their network carriers for the new smartphone. While there are devices getting sold directly to customers, but that is from established brands. Nokia certainly is an established brand but has it reached that status where customers directly purchase its smartphones in the U.S., which we will get to know soon.

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OnePlus, the Chinese smartphone maker, has managed to carve its name in the high-end smartphone segment in a very little time, thanks to the company’s “never settle” philosophy for the “flagship killer” smartphones.

Given that OnePlus is a relatively new company compared to others, the availability of its smartphones has been through limited platforms. However, that’s about to change in the company’s home country.

OnePlus has today announced that the company has partnered with Suning Tesco and its smartphones will now be available for purchase through its e-commerce platform Suning.com. Its devices will also be available through more online retailers soon.

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The development comes as a part of the company’s plan to expand to multiple channels. Pete Lau, CEO of OnePlus Technology said that “expanding multiple channels is one of our priorities this year.”

Marking the debut of OnePlus smartphones on Suning.com, the company is offering coupons worth 333 yuan, 666 yuan, and 888 yuan. The company is also set to have live broadcast at 18:00 hours during which viewers can get more benefits.

Besides this, the company is also set to launch its new logo or branding today. From the leaks, it seems that the logo is very similar to the previous one, but the company has made some subtle changes in typography and color scheme. More details about this, including the design philosophy will be revealed later today.

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Jeff Bezos, founder and CEO of Amazon has arrived in India, dressed in an Indian attire. He took to Twitter to reveal that he paid his regards at a memorial dedicated to Mahatma Gandhi and also shared a video of the same.

He is on a three-day visit to India where he will be attending a company event in New Delhi and also likely to meet senior government officials. As Jeff Bezos comes to India, thousands of small traders across 300 cities have planned protests, claiming that the company is distorting local retail market.

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Ashok Kumar Gupta, India’s antitrust chief, has said that big e-commerce companies in India should not offer deep discounts which can potentially hurt and small-scale brick and mortar retailers in India.

Hundreds and thousands of small brick-and-mortar retailers, led by the Confederation of All India Traders (CAIT), have planned a countrywide protest against the company. CAIT has also accused Amazon and Flipkart of violating India’s foreign investment rules but the companies have denied the allegations.

During the event, Jeff Bezos said that the company will use its global footprint to export $10 billion worth of ‘Make In India’ goods by 2025. He also stated that Amazon is going to invest $1 billion in digitising the small and medium businesses in India. Amazon has committed $5.5 billion in India investments and sees the country as a key growth market.

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It’s already known that Amazon is planning to launch its own food delivery service in India, however, nothing has materialised so far. But if the new report is to be believed, then the eCommerce giant is all set to launch the service around Diwali.

The report claims that Amazon’s food delivery business will be operational in India around Diwali and the company is expected to invest around $500 million to get the business started to take on the likes of Zomato and Swiggy. While it has not been confirmed with which cities the company will start this new business, we expect it to be limited to select cities initially, most probably with Bangalore.

To undercut competition, the company will reportedly charge lower commission rates to the restaurants. The report cites a restaurant chain owner who claims that they were charged only one-fourth of what other players in field charge. Currently, Swiggy and Zomato — the dominating players in the market charge around 20 percent from restaurants.

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Further, the report adds that Amazon will be adopting Swiggy’s strategy of deploying cloud kitchens that only offer food delivery service and no dine-in facility. Amazon will also start an aggressive hiring process for new delivery agents in order to reduce delivery times. To lure customers, the company is expected to offer reduced pricing and cashback schemes linked with the Amazon Pay wallet.

India’s food delivery market is booming right now and is forecast to be worth $17 billion by 2023. Swiggy, which has raised around $1.3 billion in funding so far, is perhaps the largest player in this segment in India, with a valuation of around $3.3 billion. On the other hand, Zomato has raised around $750 million having valuation of $2 billion.

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(Via)

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Yao Yanzhong, Vice President of JD Group and President of JD Communications Division as well as Ni Jiayue, Director of Honor Domestic Sales and Service Department held a meeting and have signed an agreement for 5G smartphones.

As per the agreement, Honor’s first 5G smartphone, which is coming to the market later this year, will be sold through JD.com in China. With this agreement, both the companies have reached a deep cooperation for 5G services and JD.com will provide users with a full-service one-stop solution for Honor 5G products and will also support its development.

As for the marketing collaboration, both the companies will strengthen online and offline omni-channel cooperation and aims to reach the target consumer groups. They plan to continuously introduce more accurate marketing that directly touches people’s hearts.

Further, it adds that for the cooperation related to the smartphone business, both the companies — Honor and JD.com will create new product activities through the in-depth exploration of user needs, and help Honor reach a new height of business growth.

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Honor and JD.com have set up many records in the Chinese eCommerce market and with this new agreement, both the companies are expect to showcase solid outcome in terms of sales and market share, especially with JD’s 11.11 Global Good Things sales festival coming next month.

While nothing has been revealed about this upcoming Honor 5G smartphone, reports are making rounds since past few weeks that the company is gearing up to launch the Honor V30 and V30 Pro smartphones which will be powered by the company’s own Kirin 990 octa-core flagship chipset that has built-in 5G modem. It is being speculated that the devices should be get launched later this month and should go on sale by 11.11 Singles’s Day sale in China next month.

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(Via)

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China’s smartphone shipments have been declining this year and now a new report from Counterpoint’s China Channel Service shares that online sales in China’s smartphone market decreased to 24 percent in Q1 2019 from 28 percent in Q4 2018.

It says that China’s smartphone market continued to slow down from H2 2018 due to sluggish demand from consumers as well as seasonality and factories being closed down for the Chinese New Year.

Also, Counterpoint’s Market Monitor Report indicates that the sales in Q1 2019 registered 8 percent year-on-year decline in China. However, JD.com and Tmall.com, two of the biggest eCommerce platforms in China, continue to be the leading platforms. Both the platforms together dominated the market with over 70 percent of the market share.

However, other popular app platforms such as Pinduoduo, Vipshop, and Xiaohongshu have started to carry a variety of brands on their marketplace. The report goes on to add that along with JD, Tmall, and Suning, these apps have become the official online retailers for new model releases.

James Yan, Research Director at Counterpoint, says that “the importance of these third-party apps cannot be underestimated as an important marketing channel for OEMs due to the large userbase of these apps.”

As for the market, the brands that led the market, which includes Honor, Xiaomi, Apple, and Huawei, accounted for 84 percent of the market. Also, Honor has retained the title of the number one online smartphone brand in China with 24 percent of the market share.

Interestingly, Huawei’s market share in the online channel increased in Q1 as the company tries to strengthen position amid an overall market slowdown. Xiaomi’s online market share also increased in Q1 to 22 percent owing to strong demand for the Redmi Note 7.

Also, other brands such as Oppo and Vivo continued to expand into online channels. After achieving initial success with online-focused budget smartphones, such as Vivo Z series and Oppo K series, both the smartphone brands are venturing into launching flagship models in online channels. Vivo and Oppo currently account for 7 percent and 5 percent of the online market share respectively.

Apple, on the other hand, has 10 percent of its sales through the online channel in China while other smartphone brands apart from these six account for around 21 percent of the sales in China through online channels.

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(Source)

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Aiming to expand its presence in fast-growing Asian markets, search engine giant Google announced that it is investing $550 million in Chinese e-commerce powerhouse JD.com. As a part of this transaction, Google will receive 27.1 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share.

With this investment, Google will have less than a 1 percent stake in JD.com, said a spokesman for JD. The companies have described the investment as one piece of a broader partnership that will include the promotion of JD.com products on Google’s shopping service.

This move is expected to help JD.com to expand beyond its base in China and Southeast Asia in order to establish a meaningful presence in U.S. and European markets. Both companies also said that they would work together to develop retail infrastructure that can better personalize the shopping experience and reduce friction in a number of markets.

Commenting on this development, Philipp Schindler, Google chief business officer, said in the statement:

We are excited to partner with JD.com and explore new solutions for retail ecosystems around the world to enable helpful, personalized and frictionless shopping experiences that give consumers the power to shop wherever and however they want.

JD.com is competing with giant Alibaba Group Holding Ltd., which has been more focused on forging domestic retail tie-ups. Jianwen Liao, JD.com’s chief strategy officer, in a statement, “This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world.”

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Google seems to be focused on stepping up its investments across Asia, which has become a battleground for the US and China-based giants because of rapidly growing middle class and a lack of infrastructure. Google recently took a stake in Indonesian ride-hailing firm Go-Jek and is reportedly going to invest in Indian e-commerce startup Flipkart which was recently acquired by Walmart.

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Xiaomi has witnessed a tremendous growth in India. Thus, the company has been working on improving its service and opening new service centers. Now, the company is aiming to improve online buying experience and in line with that, it has launched Express Delivery service in India.

With this Express Delivery service, users will get their orders placed through Mi.com official store or Mi Store mobile application in just one day. This single day delivery service will be available free of cost. To begin with, the Express Delivery service will available for select pin codes in Bengaluru only.

If you reside in an area which is covered by Xiaomi’s service area, you will see the new ‘Express Delivery’ option on the company’s ‘Order Information’ page. Similarly, if you are using the Mi Store app to place the order, you’ll need to tap on the ‘Delivery Service’ option while checking out. If you’re eligible, you will see the ‘Express Delivery’ option.

However, there are few limitations for the service. The Express Delivery service will not be available on Sundays. Secondly, the service will be applicable to orders placed between 9 AM and 4:30 PM. Also, the service is only available when you buy eligible products, which includes the Redmi 4, the Redmi 5A, Redmi Y1, Redmi Note 4, Mi Max 2 and the Mi A1.

Read More: Xiaomi Redmi Note 5: Teaser From Flipkart Hints At A 18:9 Full-Screen Display

It seems that China-based Xiaomi is looking to counter online retailers Flipkart and Amazon India with this new service. Last month, the company partnered with Smartbox to start offering deliveries for orders made through Mi.com and the Mi Store app via automated parcel terminals at various locations, including metro stations, residential complexes, and office areas around the country.

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