JD.com may make a major investment in Indonesia’s Tokopedia to speed its expansion into Southeast Asia’s largest economy.
It is in early-stage negotiations to invest hundreds of millions of dollars into the online marketplace, insiders say.
A deal with Tokopedia would expand JD’s competition with Alibaba Group Holding to Indonesia, an oil-rich country of 260 million people with a surge in smartphone use and middle-class affluence, says Deal Street Asia.
Beijing-based JD, backed by Wal-Mart Stores, is building its Indonesian business from scratch, whereas Alibaba’s Lazada has been expanding around Southeast Asia over the past year, most recently through a tie-up with Netix and Uber in Singapore.
A report by Macquarie Research says Amazon is expected to orchestrate a big expansion into Indonesia and elsewhere, triggering a wave of industry consolidation. As an e-commerce market, Indonesia alone is expected to climb to $65 billion by 2020 from just $8 billion now.
Tokopedia was co-founded by William Tanuwijaya, the son of a factory worker, in 2009. Its business model is similar to that of Alibaba, matching customers with merchants. Tokopedia raised a record US$100 million funding round from SoftBank Group and Sequoia Capital in 2014.
