Week in Review: Indonesia’s future potential still a siren call
By Karamjit Singh November 18, 2016
- What’s Alibaba’s next move in e-grocer market - acquisitions or expansion?
- MaGIC works to elevate awareness of social entrepreneurship via SEHATI
I STILL have the Alibaba via Lazada acquisition of RedMart on my mind! And that was the trigger for our story on how Indonesia’s e-grocers are doing. And as with any Indonesian internet play, that magical phrase ‘market potential’ is still a powerful siren call to investors to put their money down on the particular vertical they choose to bet on based on their belief in this ‘market potential’.
But if you speak to entrepreneurs who are already on the ground trying to build out their Southeast Asia (SEA) presence, you will hear from them that the SEA market potential really lies in perhaps 11 urban hotspots. That is your immediate ‘potential’ that you need to be able to tap. And you are in serious trouble if you can’t.
RedMart’s experience is a cautionary tale. Even dominating the hotspot of Singapore, and raising US$26.7 million in Aug of 2015 was not enough to power RedMart to raise the Series C they were confident of raising.
And that could be because the grocery market is a really tough one for startups to come in and add value to, because to the consumer, while time and convenience weigh heavy in their value scale, price plays an equally important part and the comment by Donald Wihardja, managing partner of Convergence Ventures, speaking as a user of e-grocery services in Jakarta is quite revealing.
And, I am now watching to see Alibaba’s next move in this e-grocer space. Will they make more acquisitions in the region or will they use RedMart as the vehicle to enter the other markets. I’m thinking they will make acquisitions. What are your thoughts?
Meanwhile in Malaysia, the announcement by industry association, TeAM (Technopreneurs Association of Malaysia) of its intentions to raise a US$50 million (RM218 million) venture fund sounds really audacious and bold to me. On the one hand, with so many VCs looking to raise further funds, you wonder how strong an argument can TeAM make to LPs to trust them with their money.
But then as I shared on BFM, the top radio station in Kuala Lumpur, during DNA’s Tech Talk show, the needle is only moved by those who are brave and bold (btw, Patrick Grove of Catcha likes to use the phrase “be brave, be bold” as well). So, good luck to TeAM and its president, Fadzli Shah.
Finally, I have to admit that my eyes are now a lot more open to the value that social enterprises bring to an economy as those set of hardy entrepreneurs try to balance making money while doing good. And kudos to MaGIC, the Malaysian Global Innovation and Creativity Centre, which has been leading efforts to promote social entrepreneurship through programs targeted at equipping them with the right skills to succeed and in educating corporate Malaysia that social entrepreneurship is not and should not be seen under the CSR (Corporate Social Responsibility) lens.
I hope that same mindset change among corporates is being driven by public agencies in the other SEA countries as well. That’s an initiative that will help move the needle as well.
With that, I wish you a restful weekend and a productive week after.