JAKARTA (TheInsiderStories) – Indonesian conglomerate Salim Group is buying out the entire stake of a local e-commerce platform Elevania from its previous owners Indonesian mobile phone operator PT XL Axiata Tbk and Singapore e-commerce firm SK Global Planet Holdings Pte. Ltd.
The Conditional Sale and Purchase Agreement (CSPA) was signed today, announced XL Axiata in a press statement on Thursday (24/8). Elevenia is an e-commerce site established in 2014 through the cooperation of SK Global, a unit of South Korean SK Telecom, with XL. Each company holds a 50 percent stake.
PT Jaya Kencana Mulia Lestari and Superb Premium Pte. Ltd., which are affiliated with the Salim Group, will acquire 100 percent of the shares of Elevania.
The strategic choice to release ownership of elevenia will make XL, a unit of Malaysia’s Axiata Group Bhd, keep its focus on its core business and develop data service to become the market leader of mobile data service providers in Indonesia.
In addition, it said, this decision will reduce the impact of losses arising from Elevenia, and allow XL Axiata to allocate capital for generate profits for its shareholders, along with better services for its customers.
“This decision was made by careful calculation of various options that could add value to the company. This enables us to focus more as a provider of data telecommunication services, while support for e-Commerce will be done through Digital features in the data services we provide to customers,” XL’s President Director Dian Siswarini stated.
The e-commerce sector has grown very rapidly with too many players, tight competition finally pushing the sector into a business model with huge investments. Newcomers from big players, backed by giant investors, have led to louder competition and a growing gap of uncertainty over the achievement of profitability (monetization).
This CSPA Agreement applies to the transfer of shares owned by XL and SK Planet.
The transaction is expected to be completed in the second half of this year, following the fulfillment of the conditions required and the approval of several relevant agencies.
SK Planet was forced to leave the Indonesian market due to its failure to compete successfully with similar players.
Understandably, the e-commerce market in Indonesia is increasingly promising and every year grows in leaps and bounds, attracting ‘elephant investors’ to enter the fray.
The latest is China’s e-commerce player Alibaba, which recently injected US$1.1 billion in capital to local online shop provider PT Tokopedia.
Previously, Alibaba has made about $1 billion investment in Singapore-based ecommerce company Lazada to boost its stake to 83 percent. Lazada is known as a leading player in Six markets it operates in Southeast Asian region.
After releasing the Indonesian market, SK Planet is rumored to be focusing on developing the shopping market in the K-Pop country. There, SK Planet is one of the biggest players, managing a shopping site called 11st.co.kr.
After Indonesia, the company also immediately released similar businesses in a number of countries. Next is in Malaysia, then continuing to Thailand and Turkey.
So far, Elevenia has captured around 54,000 merchants or sellers, while products sold alone have reached more than eight million, in various types.
The number of members recorded on the shopping site already numbers more than five million. Last year, XL Axiata injected US$22.8 million in capital to Elevenia for business expansion.
(Writing by Linda Silaen, Email: email@example.com)