What’s drawing Chinese internet giants to Indian, Southeast Asian tech scenes?

Asia’s tech scenes have become key battlegrounds for Chinese internet giants like Alibaba, Tencent and JD, who see the markets as stops on route to global dominance – and have caught Western competitors napping

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William Tanuwijaya, founder of e-commerce firm Tokopedia. Photo: AFP

Published: 10:00am, 17 Sep 2017Updated: 10:00am, 17 Sep 2017

China’s internet giants are ramping up investment in India and Southeast Asia, highlighting the potential for growth in the regions’ vibrant tech scenes and positioning them as the next battlegrounds in their bid for global dominance.

Nearly US$5 billion in funding flooded into Southeast Asia’s tech start-ups in the first seven months of this year – already exceeding the US$3.1 billion throughout the whole of last year, according to New York-based research firm CB Insights. India, meanwhile, recorded US$5.2 billion of investments in its tech start-ups as of June, eclipsing the US$3.39 billion for the whole of 2016.

The increase in Southeast Asia is in large part due to funding from Chinese tech behemoths like Alibaba, JD.com and Didi Chuxing, who have caught Western competitors napping in the rush to invest.

“Alibaba, Tencent, and JD are looking to expand and grow aggressively in [Southeast Asia], and the simplest, fastest way to do so is through investment into, and acquisition of, synergistic technology companies with wide distribution, extensive on-the-ground infrastructure, and/or a large user base,” said Justin Hall, principal at Southeast Asia-focused venture capital firm Golden Gate Ventures.

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In Southeast Asia, China’s dominant e-commerce platform Alibaba – the owner of the South China Morning Post – has committed US$2 billion for an 83 per cent stake in the region’s e-commerce power Lazada Group and led a US$1.1 billion investment into the Indonesian online marketplace Tokopedia. Tencent, the Chinese internet and gaming company, is an early backer of the Singapore-based online gaming and mobile commerce firm Sea, while Beijing-based ride-sharing company Didi Chuxing has led an investment of up to US$2 billion in Singapore-based Grab, Southeast Asia’s answer to Uber. Meanwhile, JD.com this week announced that it is forming a US$500 million joint venture in e-commerce and financial technology with Thailand’s major retail firm Central Group.

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