Bogor (TheInsiderStories) – President Joko Widodo received the visit of the founder and Executive Chairman of Chinese Alibaba Group Holding Limited (NYSE: BABA) Jack Ma at the Presidential Palace in Bogor on Saturday (01/09).
During the meeting, the President and Ma discussed various matters, mainly relating to the Indonesia E-commerce Roadmap that has been announced since the beginning of 2016. Both also discussed the utilization of existing platform to boost Indonesia’s exports, especially to China.
Minister of Information, Communications and Technology (ICT) Rudiantara said, in the meeting also came the idea to create Jack Ma Institute for human resource development to meet the needs of human resources in the country, as well as to make Indonesia as the central supplier of human resources for the countries in the region.
Indonesian E-commerce Roadmap itself contains seven points of the digital economy development efforts. Beside human resources or talent, there are also logistics, funding, consumer protection, communications infrastructure, taxation, education and cyber security.
Last year, Alibaba has poured $1.1 billion investment to Indonesia’ online-retailer Tokopedia. This, the first direct investment by the company in Indonesia.
The partnership with Alibaba will enhance Tokopedia’s scale and quality of service to its users while facilitating Tokopedia’s salespeople and partners to expand their business to all corners of the archipelago even to the world.
This major investment from Alibaba will lead Tokopedia to become unicorn with the valuation of $1 billion after Go-Jek, a ride-hailing company bearing status as the first unicorn company in Indonesia with the valuation of $1.3 billion.
Later on, Alibaba increasing its ownerships in Southeast Asia’s Lazada Group S.A unit. The company set up funds up to $1 billion to increase its share in the e-commerce player from 51 percent to 83 percent.
Alibaba said it will buy stakes of certain Lazada shareholders at an implied valuation of $3.15 billion. The Chinese firm made an initial investment in April 2016 in Lazada, a leading e-commerce platform in Southeast Asia.
The transaction consists of an investment of approximately $500 million in the newly issued equity capital of Lazada and acquisition of shares from certain shareholders of Lazada, for a total investment by Alibaba of $2 billion.
The transaction is expected to help brands and distributors around the world that already do business on Alibaba’s platform, as well as local merchants, to access the Southeast Asian consumer market.
Lazada currently operates e-commerce platforms in Indonesia, Malaysia, Philippines, Singapore Thailand and Vietnam. These six countries combined have a population of approximately 600 million and an estimated Internet user base of 200 million, according to Internet Live Stats.
With only 3 percent of the region’s total retail sales conducted online, Southeast Asia is expected to offer tremendous growth potential to both companies as internet penetration continues to rise.
Furthermore, the cloud computing arm of Alibaba Cloud has established two new data centers in Mumbai, India, Malaysia and Jakarta. Alibaba Cloud will significantly increase its computing resources in Asia, allowing greater support for small and medium enterprises throughout the region with powerful, scalable, cost-effective and secure cloud capabilities.
The move responds to Indonesia’s “1,000 Start-ups Movement” initiative launched last year with the aim of nurturing 1,000 ventures by the year 2020, and targeting a cumulative valuation of $10 billion.
Indonesia is one of the fastest growing e-commerce markets in the world with retail e-commerce sales growth more than 20 percent yearly. According to Statista, retail e-commerce sales in Indonesia reached $5.65 billion in 2016 and projected to be $14.47 billion in 2021.
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