Back in May this year, Indonesian super app Gojek and marketplace Tokopedia merged to form GoTo Group. Although the merger were finalised mid this year, it wasn’t until last month that the brand GoTo was registered with Directorate General of Intellectual Property (DGIP) of Ministry of Law and Human Rights (MoLHR).

Unfortunately, a little known company in Indonesia, PT Terbit Financial Technology, came forward to make it known that it owns the right to the brand name GoTo since May this year. For that, Gojek and Tokopedia were slapped with a lawsuit from Terbit Financial Technology, demanding them to pay two trillion rupiah (approximately US$140 million) as compensation.

According to a local media report recently, Gojek and Tokopedia registered GoTo with MoLHR on October 27, 2021 with registration number IDM000903101. The start date of the coverage is March 5, 2021 and the end date of the cover is March 5, 2031. Meanwhile, Terbit Financial Technology registered GoTo as the name of its computer software application, on May 25, 2021. “The start date of protection for this mark is 10 March 2020 and the end of protection is 10 March 2030,” the report added.

Apparently, a representative from the GoTo Group said that the company is aware of this issue and will respect the ongoing legal process until its conclusion. “We have successfully registered the GoTo name with the relevant authority and always operate in line with local regulations,” he said.

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In the lawsuit, Terbit Financial, the plaintiff, has requested the Central Jakarta Commercial Court to grant a number of its claims. The claims include, declare the plaintiff as the sole owner and legal right holder of the registered mark “GOTO” and all its variations. Secondly, stating that the “GOTO”, “goto”, and “goto financial” brands have similarities with the plaintiff’s “GOTO” brand.

Terbit Financial also requested the court to instruct Gojek and Tokopedia to stop the use of the “GOTO ” mark or any variations thereof.  “Punishing the Defendants to stop using the GOTO mark or all its variations. Punishing the Defendants jointly and severally paying forced money of Rp. 1,000,000,000 (one billion rupiah) to the Plaintiff for every day of delay in carrying out the decision on this case, ” the plaintiff said.

While such a lawsuit isn’t an isolated one, Facebook too were recently taken to court by a Chicago-based tech firm called Meta Company. In a public letter, Meta Company Founder Nate Skulic said “On Oct 28, 2021, Facebook decided to commit trademark infringement and call themselves Meta. They couldn’t buy us, so they tried to bury us by force of media. We shouldn’t be surprised by these actions – from a company that continually says one thing and does another.” 

The post Gojek + Tokopedia GoTo court over trademark appeared first on Tech Wire Asia.

For the past one year, Foxconn, best known for assembling electronics, has been actively announcing partnerships and plans to produce electric vehicles (EVs). The iPhone maker even has ambitions to turn its nascent auto segment into a 1 trillion New Taiwan dollar (US$35.78 billion) business in the next five years. While it took time for its plans to take shape, the company is off to a great start with the unveiling of three EV models recently.

Two weeks ago, the Taiwanese company introduced two passenger EV models — Model C sports utility vehicle, Model E sedan — and a Model T electric bus prototype during its annual Foxconn Technology Day event in Taipei. Its first three EVs will be made via a joint venture between Foxconn and Taiwan-based automaker Yulon Motor, known as Foxtron, the company said during the event.

The company said in a statement that Terry Gou, its founder “has always believed that the adoption of electric vehicles would inevitably be a global trend by the simple fact that it has become the world’s largest and most expensive smart electronic device.” 

From an iPhone maker to an EV maker

To recap, over the past year, the Taiwanese company has forged one partnership announcement per month, in turn “creating a Hon Hai electric vehicle supply chain and distribution network,” Chairman Young Liu said in a company statement. He says Foxconn, formerly Hon Hai Precision, now has an “electric vehicle supply chain and distribution network.”

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According to a report by Forbes, quoting analysts, it said “a share of the global EV market should easily fall to Foxconn now because the three EV models follow a string of related joint ventures since 2014. Those endeavors give the firm expertise that it can combine with its giant factory infrastructure in Asia.”

Among the slew of deals Foxconn has gotten itself into includes with US-based EV startup Fisker and Chinese automaker Geely. Separately, there were even a venture with Stellantis that allowed Foxconn to develop automotive cockpit software and another, with Gigasolar Materials, which gave Foxconn expertise in EV batteries and their components.

“We have done almost one collaboration project each month in the past year to ensure our supply chain capability and potential markets [for EVs],” Liu said at the event. “We are no longer the new kid in town.” For 2020 alone, Foxconn’s total revenue was NT$5.35 trillion, and as per Nikkei’s report, it estimates that its EV-related business will contribute more than NT$10 billion this year for the first time.

Liu reckons that regional manufacturing will be a major trend for the EV industry as producing cars close to the markets where they are sold will help manufacturers keep costs down. That said, he claims that Foxconn will soon announce the details of its EV production plans for Europe, followed by India and then the South American market.

To top it off, just last week, Indonesia’s government said that Foxconn “plans to build” electric vehicles and batteries there. Indonesia’s Investment Coordinating Board (BKPM) released a statement, quoting Liu saying Foxconn “plans to build a comprehensive electric battery and electric vehicle industry in Indonesia” for two-wheel and four-wheel vehicles. “We will not only assemble, but we want to build a whole industry for Indonesia in Indonesia,” Liu said, according to the statement.

Separately, Liu said all plans in different nations will involve partnering with local governments or government-recommended enterprises. In terms of overseas forays, Foxconn recently acquired a manufacturing plant from Lordstown Motors in the US state of Ohio, which the company will use to produce full-size electric pickup trucks for the American market from April 2022. 

To serve Southeast Asia, Foxconn is also building a production facility in Thailand with state-backed oil and gas company PTT whereas in China, the company is collaborating with Zhejiang Geely Holding. Overall, Foxconn has set a target to provide components or services for 10% of the world’s EVs by between 2025 and 2027.

The post iPhone maker Foxconn aims to turn EVs into a US$35 billion business appeared first on Tech Wire Asia.

It’s been more than a year and the global semiconductor shortage has shown no signs of abating as supply chains have yet to keep up with the growing demand. Now, given how complex the supply chain is within the industry, Taiwan, the world’s major chip producer, is saying it cannot sort out the problem alone and needs Malaysia to do its part to help ease the stress on the chip shortage.

Having been at the front and center of efforts to resolve the shortage, Taiwan Economy Minister Wang Mei-hua told Reuters that it could not sort out the problem alone because the supply chain is so complex. “The bottleneck in fact is in Southeast Asia, especially Malaysia, because for a while the factories were all shut down,” she said.

Currently, Malaysia is one of the top ten countries in the semiconductor industry, accounting for about seven percent of the global semiconductor trade and about 13% of the global capacity in terms of back-end assembly test and packaging.

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Wang reckons the focus now should be on Malaysia resuming production as soon as possible. “I know that Malaysia started to restore production capacity in early September, and now the production capacity has returned to about 80%, so if their capacity can slowly come back, this problem can be slowly dealt with.”

However, according to Malaysia Semiconductor Industry Association President Wong Siew Hai, major Malaysian semiconductor manufacturers are already running at full capacity to supply the auto industry, Reuters reported

“For the automotive chips, they are doing their best to ship as much as possible, but the current capacity cannot meet demand because it’s too huge, the build-up is a lot. Everything is at 100% to satisfy the demand for automotive parts. Where they can increase productivity, they’re already doing so,” he said.

But when it comes to increasing capacity, Wong said it will take time, with most available only next year. For context, Malaysia houses suppliers and factories serving semiconductor makers such as Europe’s STMicroelectronics and Infineon, as well as major car makers including Toyota Motor Corp and Ford Motor Co.

A local media even reported, quoting an economist from Malaysia University of Science and Technology (MUST) Geoffrey Williams, who believes the remaining restrictions in Malaysia  affecting the semiconductor industry should be lifted in order to address the global semiconductor shortage. “Malaysia must be careful to maintain its good position in the semiconductor industry if it does not want to lose out to other countries,” he said.

Malaysia has also been facing restrained manufacturing, and supply of aluminum capacitors, making the global shortage only worse. Aluminum capacitors are used in 5G, work-from-home electronics, electric vehicles (EV), and renewable energy tech, which are all increasing in demand with time. Unfortunately, just as demand picks, top suppliers of the aluminum capacitor have been undergoing facility shutdown and capacity reduction in the past few months.

The post For Taiwan, Malaysia could ease the global semiconductor shortage appeared first on Tech Wire Asia.

By the fourth quarter of 2022, customers of Malaysia’s DuitNow and Singapore’s PayNow will be able to make real-time payment transfers using only mobile numbers. With the linkage, a large number of individuals sending money between Singapore and Malaysia, which amounted to US$960 million in 2020, would have a more seamless remittance experience.

Both the Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) announced this week the phased linkage of Singapore’s PayNow and Malaysia’s DuitNow real-time payment systems.

To begin with, the first phase will be launched in the final quarter next year, following which customers will also be able to make retail payments by scanning NETS or DuitNow QR codes displayed at merchants’ storefronts.

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In a joint statement, MAS and BNM said the project will enable more seamless payments for the high volume of remittances between Singapore and Malaysia, which reached S$1.3 billion (US$960 million) last year. “It will also cater to travelers between both countries which saw sizeable pre-pandemic traffic of about 12 million arrivals yearly on average.”

As soon as it is launched, both central banks will work to expand the features of the PayNow-DuitNow linkage. “Both regulators will also explore the feasibility of integrating innovative features such as distributed ledger technology-based solutions to catalyze greater efficiencies in payments clearing and settlement between participating banks.”

To be fair, as claimed by BNM and MAS, “The linkage closely aligns with the G20’s work of driving faster, cheaper, more inclusive and more transparent cross border payments, and is a concrete step towards achieving an ASEAN network of linked real-time payment systems.”

To recap, MAS has made a couple of similar collaborations including a linkage plan with the Indian central bank’s real-time payment service by July 2022. MAS and BNM also recently teamed up with the Securities and Exchange Commission of Thailand to shore up cross-border investment opportunities via a depositary receipts linkage between the two countries.

Chief fintech officer of MAS Sopnendu Mohanty described the link as an “important infrastructure” to support cross-border payment needs of individuals and businesses. He also said it will also support the “growing digital economic activity” between Singapore and Malaysia.

To top it off, Mohanty said the linkage also offers MAS and BNM a valuable opportunity to incorporate the use of distributed ledger and smart contract technologies in the wholesale cross-border payments space.

The post Real-time payments between Singapore and Malaysia by the end of 2022 appeared first on Tech Wire Asia.

When the global shortage of semiconductor chips started getting severe in late 2020, it highlighted how indispensable these specialized components are in today’s modern economy. More importantly, the issue emphasized the high degree of geographical concentration of chip manufacturing.

A Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG) study even highlighted how all countries are interdependent in this integrated global supply chain, relying on free trade to move materials, equipment, IP, and products around the world to the optimal location for performing each activity. “In fact, semiconductors are the world’s fourth-most-traded product after only crude oil, refined oil, and cars,” the report claims.

That being said, with the kind of importance to technology supply chains that Taiwan, South Korea, or Japan has, when those countries went into a lockdown, the global chip shortage only got worse. Then there is also Malaysia, a Southeast Asian country that hasn’t historically had significance until it merged as a major center for chip testing and packaging.

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SIA and BCG also emphasized that the current global structure of the semiconductor chip delivers enormous value. “A hypothetical alternative with parallel, fully “self-sufficient” local supply chains in each region to meet its current levels of semiconductor consumption would have required at least US$1 trillion in incremental upfront investment, resulting in a 35% to 65% overall increase in semiconductor prices and ultimately higher costs of electronic devices for end-users.”

Aluminum capacitor supply crunch

For context, Southeast Asia, according to data, accounts for 27% of the global semiconductor packaging and testing industry. Malaysia meanwhile, accounts for 13% of global chip assembly testing and packaging, and 7% of the world’s semiconductor trade passes through the country.

Unfortunately, the current Covid-19 infections rates are still soaring in Malaysia, jeopardizing plans to lift lockdowns and restore full production capacity. Although the country’s authorities have granted exemptions to certain manufacturers in an effort to keep the economy on track, those factories are only allowed to keep operating with 60% of their workforces and will only be able to move back to 100% when more than 80% of their workers are fully vaccinated. 

That has led to, according to a report by Digitimes, restrained manufacturing, and supply of aluminum capacitors, making the global shortage only worst.  “On top of the global shortage of semiconductors, passive components are also seeing undersupply as Covid looms large in Southeast Asia, where suppliers are forced to manufacture at a lower capacity.

Basically, aluminum capacitors are used in 5G, work-from-home electronics, electric vehicles (EV), and renewable energy tech, which are all increasing in demand with time. Unfortunately, just as demand picks, top suppliers of the aluminum capacitor have been undergoing facility shutdown and capacity reduction in the past few months.

The report also noted that Japan-based Chemi-Con and Nichicon had to close their facilities in Malaysia nack in July and August. “The two Japanese suppliers, plus Rubycon, who has production facilities in Indonesia, have over 50% market share of the world’s aluminum capacitor. Another Japan-based main supplier of solid-state capacitors in Malaysia is Panasonic,” it added.

Industry sources even told Digitimes that shipments of aluminum capacitors from Malaysia could decrease by between 30 and 60% due to the Covid situation there. Lead times have increased to over six months leading to some orders from those Japanese companies have to spill over to Taiwan and China-based suppliers.

Prior to this, Malaysia, also home to plants belonging to the likes of Infineon Technologies, NXP Semiconductors, and STMicroelectronics, was also going through a supply shortage of ceramic capacitors — an essential for circuit boards.

The post Aluminum disruption in Malaysia adds a wrinkle to the global chip shortage appeared first on Tech Wire Asia.

Top chip makers in China have been speeding up efforts to reduce their use of US semiconductor equipment since last year. To that, the country’s top contract chipmaker, Semiconductor Manufacturing International Corporation, better known as SMIC, is planning to build a new fabrication facility that will become China’s largest such facility used for products other than memory.

Undeniably, it could be a major step towards easing the pressure on the semiconductor supply chain. Given how Taiwan Semiconductor Manufacturing Company (TSMC) is arguably the most important company in the world with a foundry producing cutting-edge chips for top tech firms, SMIC’s new plant plan could intend to challenge TSMC as a global leader and ride on the industry-wide rush to expand its capacity.

The new plant will be built on the outskirts of Shanghai and SMIC plans to spend US$8.87 billion on building it. The major expansion in capacity comes at a time China is trying to build a world-class chip industry given how China’s government and tech firms don’t want to rely on foundries in other countries. This is especially crucial since the US can block shipments of powerful high-end chips to Chinese manufacturers. 

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That said, SMIC is China’s best hope for building a self-sufficient chip industry in the country. The company is also an important supplier for several Chinese chip designers as well as US designer Qualcomm.  SMIC’s newest plant will be built in a free trade zone in the south-eastern suburbs of Shanghai, an enlargement of the tariff-free areas President Xi Jinping originally approved to attract foreign investment and trade. 

As outlined in a regulatory filing, the factory will offer “a production line with a production capacity of 100,000 12-inch wafers per month, focusing on the production of integrated circuit foundry and technology services on process nodes for 28 nanometer and above.”

The expansion is also because SMIC’s existing plants are running at or close to full capacity and its executives are counting on being able to procure equipment to make chips based on more mature technologies, despite US sanctions. Currently, there is a chip shortage that is working its way from automobile manufacturers to smartphone manufacturers, but it will take some time to get a new facility up and running to mitigate the issue.

SMIC in China vs Taiwan’s TSMC

Last September, when SMIC was added to the US Commerce Department’s Entity List which bans the unlicensed exports of American technology to the company, the company’s co-CEO Zhao Haijun confirmed several times that it has hindered the company’s development of more advanced technologies. This is mainly because it relies more heavily on American equipment suppliers. Zhao said his company is looking for alternative solutions while continuing to communicate with the U.S. government.

The chips that will be made at SMIC’s new factory will use the 28nm process node which means that these will not be advanced chips. However, it will be useful in the production of Wi-Fi chips, image sensors, microcontrollers, and more. While chips meant for computers, and popular smartphones are built on processes less than 10 nanometers, there are plenty of everyday electronics that rely on chips built with 28 nanometer or larger processes. 

This directly puts SMIC up against TSMC which announced plans to expand its 28nm production in Nanjing, China to cover local demand. By way of comparison, Taiwanese chipmaker TSMC states that its capacity in 2020 was 12 million 12-inch equivalent wafers and predicted four percent growth in 2021. Looking back, when both TSMC and Samsung were at 5nm, SMIC was stuck at 14nm. It even used that process node to deliver Huawei’s Kirin 710A last May.

The envisioned plant comes on top of a US$2.35 billion factory SMIC’s planning for south China’s Shenzhen that will be able to make as many as 40,000 12-inch wafers per month. Both projects represent an effort to shore up its lead in domestic chipmaking while furthering the country’s broader chip ambitions.

Experts reckon the Shanghai facility’s mature-node chips could be targeted at the automaking industry, which is struggling with an endemic shortage of the semiconductors they need to power electric vehicles and in-car systems.

So, while SMIC reckons its new facility could be groundbreaking, it won’t help China to meet its twin ambitions of driving its economy with big data and AI-infused analytics, with home-built silicon of the sort needed to run bleeding-edge servers and accelerators. Most of that sort of silicon comes from non-Chinese companies, plenty of which are US-based and therefore need a licence before exporting to the Middle Kingdom. 

The post Chip Wars: Here’s how China’s SMIC plans to challenge Taiwan’s TSMC appeared first on Tech Wire Asia.

Over the last few years, Vietnam has been shaping up as Southeast Asia’s powerhouse. Most recently, the country even appeared as the only single economic success story in the coronavirus era, maintaining steady positive growth as other economies struggle to recover. To top it off, a surge in foreign investments and strong government support have even fueled the fintech ecosystem in Vietnam.

So, it is inevitable to witness the nation’s digital economy rising – making it one of the fastest-growing economies in ASEAN regions. As one would expect, the fintech opportunity in Vietnam is real and many companies in the country are getting in on it.

To recall, in 2018, fintech alone contributed to the largest funding in Vietnamese startups, outperforming sectors such as e-commerce.

In the same year, foreign investors invested US$117 million into Vietnam’s fintech startups. To top it off, Vietnam’s fintech ecosystem has grown strongly in the past few years – there are 113 active fintechs now vs 44 in 2017. The country is second only to Singapore in Southeast Asia in terms of funding flows. 

Currently,  MoMo, short for Mobile Money, launched in 2013 and is Vietnam’s biggest e-wallet. Entering the market early gave it time to cultivate relationships with tens of thousands of offline stores and connect them with the technology to transfer money between bank accounts. Today, Momo claims 60% of Vietnam’s mobile payments market, processing an annualized US$14 billion worth of transactions for more than 25 million users, according to the company.

Vietnam’s biggest e-wallet player, MoMo. Source: AFP

Dozens of companies, including Southeast Asian tech giants Sea and Grab, have entered the space and are burning cash to acquire users. Analysts predict very few will survive the battle, not just against each other but also against similar services from banks and telecommunications firms.

Vietnam, where fintech thrives

Looking at statistics, Vietnam has a tech-savvy population, as indicated by the high mobile penetration rate of 141%, and strong high-tech exports (40% of total manufactured exports versus just 20% for EM peers). Above all, Internet access is also incredibly cheap.

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The downside remains the poor rates of financial inclusion — well below its EM peers, with below-average bank account penetration and limited access to bank branches and ATMs. For these reasons, Vietnam remains a predominantly cash-based economy.

Even for online purchases, close to 90% are settled through cash on delivery, the highest proportion within Southeast Asia.

Bringing both together — a strong domestic technology skills base, and the low penetration of the formal financial sector — Vietnam presents an ideal environment for fintechs to thrive. 

Fintech strategy in Vietnam

Based on Tellimer’s data, a developing markets-focused investment research hub, the fintech landscape in Vietnam is dominated by payments and lending firms, which together account for over two-thirds of the total fintech population, compared to a 57% average across other emerging markets.

Tellimer also surveyed 24 Vietnamese fintechs and identified the top strategies Vietnam fintechs are looking to execute and the key challenges to overcome to achieve their full potential. Investment in technology is the top strategic priority for Vietnam fintechs and some players are in fact planning to invest in technology including MoMo, Finhay, and Interloan.

Besides that, given how the Vietnam fintech landscape is currently very focused on payments and lending, players are actively looking to diversify and differentiate their offerings by introducing new products, both within their sector and in new sectors. Some Vietnamese fintechs planning to expand their product base include Lendbiz, Smartnet, and OnOnPay.

Interestingly, the survey found that entering strategic partnerships could help fintechs deliver on their growth objectives by giving preferential access to customers and products. Tellimer said some fintechs including Yolo, Weedigital, and Fundiin are planning to form partnerships in the future.

Even experts reckon the market may eventually consolidate into two or three players and given how the investors behind many players have very deep pockets, the constant flowing in of funds will have many companies coexist. Fair enough, that battle looks set to intensify. 

VNLife, an operator of mobile wallet VNPay backed by SoftBank Group’s Vision Fund, said in July it raised US$250 million from General Atlantic, Dragoneer Investment Group, PayPal Ventures, and others. MoMo, which said in January that it raised US$100 million from a group of investors including US private equity fund Warburg Pincus, is already considering raising additional capital, according to people familiar with the matter.

It is, however, worth noting that regulation may be a forthcoming potential risk for the entire sector. Fintech start-ups have grown partly thanks to a favorable regulatory environment. Since the country’s central bank says there are 39 e-wallets in Vietnam, sensing a growing threat from fintech companies to the financial system may push Vietnam to do what many other countries, especially China, are doing — step up scrutiny.

The post Could Vietnam be the next fintech battleground of Southeast Asia? appeared first on Tech Wire Asia.

Over the last 18 months, airlines around have mostly been idle due to the travel restrictions worldwide. Naturally, airlines were quick to try and stop the cash bleed, but not many were innovative enough to find new ways to leverage their assets and revenue streams.

However, a low-cost airline in Asia — a region with a population of over 4.6 billion — decided to cash in on opportunities. AirAsia has been spreading its wings across Southeast Asia through its super app despite national lockdowns — and it doesn’t plan to slow down anytime soon.

The loss-making airline, controlled by business magnate Tony Fernandes, has most recently launched its ride-hailing and food delivery services across Malaysia as it adds more services to become one of Southeast Asia’s leading super apps. So far, the super app offers food delivery, ride-hailing, flight ticket booking, grocery shopping, and an e-commerce platform for beauty products. 

The ride-hailing service is so far only made available in Kuala Lumpur and the broader Klang Valley area for now, although there are plans to expand to the rest of Malaysia. Meanwhile, its food delivery services — which AirAsia launched at the height of the pandemic last year — are in selected cities around Malaysia and north of Singapore. 

The low-cost carrier also recently acquired Gojek’s ride-hailing and payments businesses in Thailand — signaling its fierce expansion into the region. The group has also made an acquisition of Malaysian online food delivery platform DeliverEat, which would allow the group to strengthen its fleet of drivers in Penang, an island city in Malaysia.

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AirAsia super app’s head of commerce Lim Ben-Jie in a recent interview with Tech Wire Asia shared the group’s aspiration to grow beyond Malaysia, Singapore, and Thailand markets that its super app has gained ground in so far.

“Thailand was an easier expansion compared to Singapore because Gojek knew we were more experienced since we have been in the market for a longer time via the airlines. We have the sources, talent, data and our subsidiary, Teleport, is pretty strong there.”

As for Singapore, Lim attributed the slow start to AirAsia Food’s tech that was pretty nascent. “We were careful with our expansion, we wanted to go into the market fast. Only then we shifted our priority to improve the platform’s technology infrastructure. It is otherwise an easy market to enter and we are pretty confident about our future there.”

A few months later, AirAsia also launched a grocery delivery service in selected cities in Malaysia as well as Singapore with plans to expand more around both countries by the end of this year. 

AirAsia Food: Newcomer vs big player

Truth be told, the delivery business market in Malaysia is a highly competitive one that’s dominated by popular and established stalwarts like GrabFood and Foodpanda. It was therefore a surprise to many to hear of AirAsia’s entry into the fray.

Looking at the bigger picture, ride-hailing giant Grab contributed nearly half of Southeast Asia’s food delivery gross merchandise value in 2020, hitting US$5.9 billion.

It also led five out of six of the markets in the region last year, according to a report by tech venture building firm Momentum Works. It was followed by food delivery service Foodpanda, with a GMV of over US$2.5 billion, and Gojek at US$2 billion.

Given these market conditions, one has to wonder what plans AirAsia has up its sleeve. Perhaps it is worth emphasizing that AirAsia intends to focus on small restaurants for its food delivery business. Charging lower commission fees (15%) than Foodpanda and Grab may help AirAsia onboard new and small restaurants, but the question of sustainability lingers.

“If you ask me would AirAsia Food survive? We would. Food is just one of our businesses and our core is still travel. Our diversification strategy, our infrastructure, and logistics are very ahead of the curve that’s why we are confident that we will make it through with these services,” Lim said.

To be precise, Lim, echoing the words of Fernandes, is pretty confident that in six months’ time, AirAsia Food and AirAsia Ride would surpass its competitors — a rather ambitious goal that they seem to have little doubt about. “ We are still a very young platform, so comparing us with Grab isn’t an ideal comparison, but as Tony said, give us six months, that’s all we need to have experiences that’s better than our competitors. That’s how ambitious we are.”

Without sharing exact figures, Lim told TWA that AirAsia Food is currently seeing two to three times monthly growth, fueled by expansions in more cities.

A collaboration with Gojek Indonesia?

While it is fair to flaunt AirAsia’s strong presence in Thailand, expanding its super app services may not be as easy elsewhere. In April this year, AirAsia’s super app launched its latest AirAsia Beauty product offering in both Malaysia and Indonesia.

“We have expanded our services so far in Malaysia, Singapore, and Thailand. Next, we plan to park our flags in the Philippines and Indonesia by the end of this year. These five countries are a priority because our presence there is very strong, so it is a quick win for us.” Lim said, adding that the goal is to spread across the ASEAN market by next year.

When it comes to Indonesia in particular, where Gojek’s super app is dominant, Lim iterated that AirAsia started by exploring categories beyond what the Indonesian-grown app offered. Hence, AirAsia beauty first, in Indonesia.

He then further highlighted that there is something in the works with Gojek and AirAsia as it is necessary for the latter to synergize with the former in order to penetrate into Southeast Asia’s biggest economy. “We will definitely synergize and in terms of competing, there is definitely going to be something we (AirAsia and Gojek) will do together in that market,” he told TWA.

Lim reckons synergizing is a necessary step in certain markets. “It depends on the market. When we bought the Gojek business in Thailand, we knew we had strengths in that country but we do not have the same advantage in Indonesia. It’s different — they (Gojek) are stronger there so we need to see how we can complement our businesses together, side by side.”

Despite it all, AirAsia has been in the red for seven consecutive quarters, posting a net loss of RM767.4 million (US$182 million) in the first quarter this year. Nevertheless, the group’s aggressive expansion of its super app footprint in ASEAN and its ambition to become the region’s “challenger super app”, may just be a game-changer not to AirAsia alone but to the airline industry as a whole.

After all, Fernandes has reiterated one too many times that AirAsia is now a multi-business company and a very valuable data-driven technology company with a strong brand.

So it is worth seeing if the goal to have its non-airline revenues match and then surpass airline revenue can be achieved eventually.

The post What exactly is AirAsia up to with its super app ambitions? appeared first on Tech Wire Asia.

About 17 years ago, Amazon quietly entered China to give rivals a run for their money by acquiring Joyo. Although its systems and personnel were a notch or two above Alibaba’s, Amazon eventually lost to Taobao after only getting a measly six percent grip of the local Chinese market. Unfortunately, Alibaba is exactly where Amazon was two decades ago — failing to get a grip of the e-commerce market outside its origin country.  

In the case of Jack Ma-owned Alibaba, when it expanded into the Southeast Asian market in 2016 by acquiring Lazada, the largest e-commerce company in the region at that point of time, it least expected to be challenged by any other company given its size and influence. At that point in time, Shopee, a subsidiary of Sea Limited, was slowly growing.

Less than five years later, Shopee had undoubtedly captured the lion’s share of the market when it conquered 57% of the entire Southeast Asian e-commerce market’s transaction volume. Its parent company by then was the largest tech company in the region and still is, with a market value of nearly US$173 billion.

When Alibaba’s international e-commerce lost to Shopee

At the current pace, Shopee is not only going to leave Lazada in the dust in SEA, but will eclipse Alibaba’s entire international e-commerce business, despite being rooted in a single region. Better yet, experts reckon it may overtake as soon as the first or second quarter of 2022.

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Just two weeks ago, Sea announced quarterly results, maintaining a three-digit growth rate, and its revenue increased by more than 160% year-on-year (YoY). Shortly before them, Alibaba reported that its international businesses — AliExpress, Lazada, Trendyol, and Daraz, had strong growth, but the increase was much smaller — at only 54%. 

Those four companies generated approximately US$1.6 billion in revenue for the quarter-end of June 30, while Shopee’s business in Southeast Asia alone generated US$1.2 billion in revenue. Alibaba did not provide a specific breakdown of each business, but considering the global influence of AliExpress, this must mean that Lazada has fallen behind Shopee seriously in the region.

To top it off, the gap has been widening and since 2019, Shopee’s e-commerce business has grown nearly seven times. For Sea’s guidance of 2021 full-year performance alone is estimated at US$4.7 to US$4.9 billion, exceeding Alibaba’s international performance in the 2020 calendar year. Though at first glance, Alibaba’s revenue growth of more than 50% YoY may seem impressive, in comparison to its competitors, it’s pale in comparison, let alone accounting for only 5% of the Chinese;s giant’s annual revenue.

Of course, Alibaba is still the number one company in China but despite years of foreign investment, it’s safe to say the company has not successfully penetrated markets outside of its home country. All while Sea continued to rise during the pandemic, partly because of the strong performance of e-commerce and partly because of the same solid digital entertainment business, which also benefited from lockdown measures that kept millions of people trapped at home.

Now what is left for Shopee is to be able to replicate its success elsewhere, abroad. The only true international e-commerce company to date has been Amazon — it’s true when experts claim no other tech enterprise has managed to transcend borders quite as it has. 

Given Shopee’s ease at combating much older and wealthier companies, the Singapore-born startup may find success elsewhere too. The only way to know is to wait and see how its international ambitions are going to play out in Latin America, where it has already launched in Brazil, Chile, Colombia and Mexico.

The post Can Shopee surpass the international e-commerce business of Alibaba? appeared first on Tech Wire Asia.

A core model of cloud computing — SaaS (software-as-a-service) is a software delivery method where service providers host an application on their own servers, which a client can access via the internet. Reflecting a rapidly digitalizing global business environment, India’s SaaS industry has been going from strength to strength recently.

Looking back, SaaS entered India over a decade ago, catering to overseas clients. It was only within the past few years that Indian corporates realized the benefits of SaaS for business functioning. Soon, companies with large teams went for software installations for their business operations. But with time, even startups began to realize the need for automation and ease in business functioning, which software brings in. 

Where’s India’s SaaS industry headed? 

While the SaaS phenomenon is global, India in particular has the opportunity to take its SaaS momentum to the next level. The nation’s SaaS industry is projected to generate revenues of US$50 to US$70 billion and win four to six percent of the global SaaS market by 2030. This would effectively create as much as US$1 trillion in value, according to a report by SaaSBOOMi and McKinsey.

For context, India currently has around 1,000 SaaS startups, including 10 unicorns, that generate a combined two to three billion US dollars in annual revenue and employ nearly 40,000 people, McKinsey & Company data showed. The number of unicorns could increase 10-fold by 2030, they predicted.

WHAT’S BEHIND INDIA’S BOOMING ENTERPRISE SOFTWARE MARKET?

Joe Devanesan | 3 December, 2020

A Google and KPMG report goes a bit further. It says India is all set to be the home of a US$10 billion SaaS industry with its global share expected to rise to eight percent. At present, the SaaS industry is growing at a compounded rate of 18% and SaaS in the small and medium business sector is slated to grow by 36 % in the next couple of years. 

The industry currently employs 40,000 workers and many of the firms, like Chargebee Inc., have gone global and some like Freshworks Inc. are heading toward public share offerings. Interestingly, over the course of the pandemic, 10 new unicorns emerged: Postman, Zenoti, Innovacer, Highradius, Chargebee and Browserstack, Mindtickle, Byju, UpGrad, and Unacademy. 

There were also several instances of substantial venture funding, including a US$150 million deal for Postman, bringing the total amount raised by the Indian SaaS community in 2020 to around US$1.5 billion, four times the investment in 2018. 

Analysts reckon that the growth overall has also been driven by Indian SaaS companies having an inherent cost advantage that comes from lower overhead costs and easily available inexpensive, skilled workforce in the country. India is estimated to have over 100,000 SaaS developers and more technical talent available at a third of the cost available in the US. 

This makes Indian SaaS companies hot picks for international corporations to invest in managing the critical back-end. Add to that India’s already established advantage in back-end support through its IT and ITES sector which brings down overall costs of companies significantly. 

Overall, India is in for exciting times as far as SaaS is concerned as more companies move to the cloud. With India already having an advantage in this area, it is well-positioned to play a leading role in the global SaaS segment in the next couple of years. 

The post The SaaS industry is the next big thing in India – here’s why appeared first on Tech Wire Asia.