Southeast Asia’s e-commerce ecosystem is still “at a very, very early stage” and many more business models and companies will be created in the region, says a founding partner of a venture capital firm.
“We are talking about single-digit digital penetration rather than overall trade penetration,” Amit Anand of Southeast Asian company Jungle Ventures told CNBC’s “Squawk Box Asia” on Thursday.
Asked about the competition between Grab, C and Goto’s choices for the region’s e-commerce market center, he said: “I think they’re still in the opening role of this movie.”
“In no way do I think the success or failure of an initiative will determine the outcome of the industry as a whole.”
Jungle Ventures announced Thursday that it has raised $ 600 million to invest in start-ups, surpassing Assets under management 1 billion. It is their “first independent, Singapore-headquartered VC firm that invests across Southeast Asia and India to reach this milestone,” according to the company.
‘The Power of the Internet’
About 40 million people in six countries in the region – Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand – became new Internet users by 2020, the report said.
The trend of young population in this region will continue to be “100%, 120% online”, Ananda observed.
“And Covid is simply pushing for more customers, more enterprises to do things through the Internet.”
Social commerce, for example, has “much bigger” potential than traditional e-commerce, Joy added. Social trade involves the use of social media websites such as Facebook, Instagram and Twitter to promote and sell products and services.
“We didn’t scratch the surface of it … This region is a very, very fragmented and diverse geography.”
“And if you want to get the power of the internet in every corner of the globe, partner with those local influencers, with those local agents and bring technology to them, that’s the way to go,” he said.
With high interest rates, inflation and potential downturn, Anand says its three companies have postponed their IPO plans. However, companies will “definitely” go public in the long run, he said.
“The promise of being the CEO of a publicly listed company and the benefits that come with it are certainly more attractive than the effort,” he explained.
“It is very promising that technology companies in the region can make IPOs both locally and globally.”
Joy added that Jungle Ventures’ advice to its companies is not to rush back into the market due to recent instability and supply-side constraints.
“We’re seeing some big corrections. If they can, they should look at it a little longer before they return to the market so they can make some more predictions,” he said.
“Entrepreneurs in the region as a whole will be guided by us that this is going to be a supply-side-limiting market and [if there is] Whatever the need to increase supply, they need to be more focused on their efforts. “