Mapping e-commerce giants in Asia

The year 2020 marked a major shift in mostly everything due to the COVID-19 pandemic. Despite the global economic slowdown, there was an unforeseen growth in the digital and e-commerce sectors as people are confined to their homes due to lockdown measures. Businesses, too, were forced to innovate by going digital. This led to the rise of e-commerce share of global retail trade from 14% in 2019 to about 17% in 2020, which triggered the digital and e-commerce turning point.

While digital e-commerce platforms start to proliferate all around the world, the scale and growth rate of e-commerce in Asia really sets it apart from other parts of the globe. For instance, China this year is projected to garner $1 trillion in total revenue from its e-commerce sector, and the market is expected to be larger than the US, Japan, the UK, Germany and France combined.

The e-commerce sector in Southeast Asia is also experiencing a boom. With the absence of Western players, such as Amazon, local e-commerce marketplaces, such as Shopee, Lazada and Tokopedia, become the leaders and giants in this sector.

Southeast Asia

Shopee is recognised as the leading and largest e-commerce platform in Southeast Asia with 198 million visits per month. Founded in Singapore in 2015 by Forrest Li, Shopee has expanded to 10 other countries in Southeast Asia and South America.

Shopee managed to double its revenue to $1.29 billion in Q2/2020 and is projected to garner up to $4.7 billion in revenue and grow 112.3% (yoy) this year, according to the Sea Group 2020 Q4 report. Shopee’s parent company, SEA Group, is deemed the largest tech company in the region with a market value of nearly $130 billion.

Shopee records a similar success in Indonesia, being seen as the largest e-commerce in the country with the most visitors and clicks compared to its rivals, such as Tokopedia and Lazada. With this success, SEA Group proceeded to launch e-wallet service ShopeePay in October 2020 to support both online and offline transactions.

The second largest e-commerce in Southeast Asia is Lazada. The platform also originates from Singapore and was founded by Maximilian Bittner with the backing of Rocket Internet in 2012. It is seeking to be the ‘Amazon of Southeast Asia’. Lazada operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam and recorded a $1 billion revenue last year.

By 2014, Lazada Group had entered multiple countries and raised approximately $647 million via several investment rounds from its investors, such as Tesco, Temasek Holdings, Summit Partners, JPMorgan Chase, Investment AB Kinnevik and Rocket Internet. Lazada is currently owned by the Alibaba Group after the Chinese giant acquired a controlling stake in the marketplace with an initial investment of $1 billion in 2016.

In the following year, Alibaba increased its stake from 51% to 83% with an additional $1 billion investment. In March 2019, to expand its Southeast Asian market, Alibaba doubled its investment in Lazada to $4 billion, as reported by Reuters. Lazada's valuation stood at $2,35 billion in 2017 and it recorded $4,5 billion in GMV in 2020.

Tokopedia is the third most popular e-commerce site in Southeast Asia and second in Indonesia. It was founded in 2009 by William Tanuwijaya and Leontinus Alpha Edison. In 2019, Tokopedia’s GMV was estimated at over $15 billion from 100 million active users and 10 million sellers.

In May 2021, Tokopedia announced its partnership with Indonesian ride-hailing and e-payment firm Gojek. The valuation of the combined entity, called GoTo, reached $18 billion. Japan’s SoftBank and China’s Alibaba become the biggest shareholders in GoTo with stake of 15.3% and 12.6%, respectively. GoTo is said to be seeking a public market valuation of $35 billion to $40 billion.

East Asia

Alibaba is the largest e-commerce company in Asia. It is also known as the pioneer in Asia’s e-commerce sector. Founded by Jack Ma and his 17 friends in 1999, Alibaba became the second Asian company to break the $500 billion valuation mark in 2018. It overtook Facebook as the world's sixth-most valuable brand in 2020.

On 19 September 2014, Alibaba held an initial public offering (IPO), which was hailed as the largest global IPO in history, bigger than Google, Facebook and Twitter's IPO combined. The company had a market capitalisation of more than $230 billion. As of 2021, Alibaba has made 20 acquisitions and 151 investments and spent over $19.99 billion for acquisitions.

Coupang, backed by SoftBank, is the largest e-commerce company in South Korea. Founded by Bom Suk Kim in 2010, Coupang is hailed as the Amazon of South Korea. Cited from CNBC, the company focuses on fast delivery and convenience. It builds warehouses across the country to cut down delivery time. The company states that 70% of South Koreans live within 10 minutes of a Coupang warehouse. According to a paper submitted to the US Securities and Commission, Coupang booked $11.9 billion in sales in 2020, up 90.8% from that in 2019.

The company went public in March on the New York Stock Exchange, becoming the largest IPO of the year with an IPO value of up to $60 billion. It entered Japan last month and recently expanded to Taiwan.

E-commerce platforms also continue to grow in Japan, the country that is often associated with technology. Japan’s e-commerce scene is dominated by Amazon Japan and Rakuten. Amazon entered Japan in 2000, starting with an online bookstore. According to a 2020 sales survey, Amazon Japan ranked first in terms of e-commerce sales at $17 billion. However, it is still unable to compete with the most popular e-commerce platform in the country, Rakuten.

Rakuten is often referred to as the ‘Amazon of Japan’ in the country. The company was founded by Hiroshi Mikitani in 1997 and went public in 2000. Since then, Rakuten started to expand overseas through acquisitions and investments. To this date, Rakuten has acquired 35 companies.

Rakuten’s latest acquisition was made in November. The company joined forces with KKR to acquire Seiyu, a retail chain owned by Walmart. As reported by BoF, Rakuten recorded a 15.2% surge in annual revenue to $13.8 billion in 2020. Rakuten’s market value stands at roughly $16.5 billion.

South Asia

India has also noticed an uptrend in the e-commerce sector. Flipkart is one of the e-commerce sites that is thriving in India. It was founded in 2007 by Sachin Bansal and Binny Bansal, both are former employees of Amazon. Flipkart initially focused on selling books online.

Flipkart is known for its acquisition spree and partnerships, as the company keeps scaling up in order to compete with other players in the industry. Flipkart has acquired digital content provider Mime360, fashion retailer Myntra and Jabong, online electronic retailer Letsbuy, as well as Delhi-based mobile marketing automation firm Appiterate. Flipkart purchased a minority stake in digital mapping provider MapmyIndia in 2015 and made a $2 million investment in TinyStep in 2017.

In 2020, Flipkart bought 100% stake in augmented reality startup Scapic. In terms of partnerships, in 2019, Flipkart partnered with Authentic Brands to license and distribute Nautica in India. Today, Flipkart leads the Indian e-commerce scene with a 39.5% market share.

In 2018, US retail giant Walmart Inc acquired a 77% stake in Flipkart for $16 billion, the largest acquisition in India. Recently, on 12 July, Flipkart announced that it has raised $3.6 billion at a post-money valuation of $37.6 billion. It is believed to be Flipkart’s pre-IPO round, as it plans to go public early next year.