Tokopedia Bets On Digital Payments To Take On Shopee
To compete with Shopee, Tokopedia is betting on digital payments: Tokopedia is in no way a small player. In 2018, the Chinese internet giant Alibaba and the Japanese investment firm SoftBank gave it more than US$1 billion, which was worth about US$7 billion.
Joe Tsai is the co-founder and executive chairman of the Alibaba Group. He is in charge of Tokopedia’s board of directors. William Tanuwijaya, the CEO of the company, said that he is raising money and getting the business ready for an IPO in two to three years.
But if Tokopedia wants to look strong, growth that stays the same sends the wrong message.
People think that the company’s growth this year was slowed by the fact that it raised a lot of money from SoftBank’s Vision Fund in the past. The company disputes this claim.
The major investor has noticed that WeWork’s IPO failed and that the Indian budget hotel giant OVO laid off a lot of people.
Now that its e-commerce business is in trouble, Tokopedia may start to talk about the power move it made last year.
Tokopedia has mostly kept quiet about a deal in which it bought about 40% of an Indonesian payments and financial services network called Ovo.
The Indonesian e-commerce pioneer, which just turned 10 last year, is starting to feel like 2020 will be a year of reckoning.
Shopee is a relatively new player in the Indonesian market. It came out in 2016. But other than DAU, it did better than Tokopedia in some ways last year. Let’s take some of these numbers apart.
The change that began in the middle of 2019 is important. In contrast to Shopee, the number of unique visitors to Tokopedia has stayed the same. Shopee users stay on the app longer, even though they visit fewer pages.
Willson Cuaca, who was one of the first investors in Tokopedia through his venture capital firm East Ventures, says that this is because Shopee spent a lot on marketing.
“The parent company of Shopee, Sea, raised $1.5 billion in March, and then they burned the rest of the year,” he says.
Shopee’s sales and marketing costs went up over the year, according to its quarterly financial reports.
Shopee Sales and Marketing Expenses
Tokopedia seemed to spend less on marketing, while Shopee spent too much. Cuaca did not give specific numbers, but he said that Tokpedia now spends very little compared to how much money it makes.
An Indonesian marketing expert named Italo Gani says, “Shopee has been pretty busy and spent a lot of money last year.” He says that Tokopedia’s marketing costs are likely to change over time. He says that some years it moves more slowly than others.
Industry insiders who don’t have a direct stake in Tokopedia have speculated that the company’s spending limits for 2019 are related to its relationship with SoftBank.
According to corporate documents filed with the Indonesian government, after a US$1.1 billion round in 2018, SoftBank-related companies owned about 40% of Tokopedia, and Alibaba owned about 25%.
This makes Tokopedia, along with the Grab ride-hailing and food-delivery network, one of SoftBank’s biggest bets in Southeast Asia.
Industry insiders say that SoftBank has told its other big portfolio companies, like WeWork and Ovo, to be extra careful and show that their unit economics are true. This is because several of SoftBank’s portfolio companies, like WeWork and Ovo, have recently fallen apart in public.
FAQs – Tokopedia vs Shopee
Tokopedia sells a wide range of things, like electronics, medical devices, beauty products, and things to decorate your room with. Shopee, on the other hand, sells things like cute trinkets, outfits, the latest styles, and items that are popular in the market.
When compared to other e-commerce sites, the thing that sellers and buyers like most about Tokopedia is that it has a lot of different features. This feature will make transactions easier for both parties. For example, you can pre-order something and wait up to a month for it to arrive.
During the second quarter of 2022, the Tokopedia website got an average of 158.3 million visitors per month, while the Shopee website only got 131.3 million visitors per month.
The way the Tokopedia marketplace is run is not the best, especially since the number of items in stock does not go down automatically. A lot of the time, notifications don’t show up or get stuck. The drop shipper system in Tokopedia is often hard to use.
TEMPO.CO, Jakarta – According to PT GoTo Gojek Tokopedia Tbk’s financial statements, the company’s losses increased by 75.49 percent from the same time last year to IDR 20.32 trillion in the third quarter of 2022.