Southeast Asia’s e-commerce ecosystem continues to be at a “very, very nascent stage” and plenty of extra enterprise fashions and firms will likely be shaped within the area, mentioned the founding associate of a enterprise capital agency.
“We’re talking about single-digit digital penetration, as compared to the overall commerce penetration,” Amit Anand of Jungle Ventures, a Southeast Asian firm, informed CNBC’s “Squawk Box Asia” on Thursday.
When requested concerning the competitors between the likes of Grab, Sea and Goto for the center of the area’s e-commerce market, he mentioned: “I think they’re still in the opening act of this movie.”
“By no means I think the success or failure of one venture is going to determine the outcome of the overall industry.”
Jungle Ventures introduced on Thursday it raised $600 million to put money into start-ups, exceeding $1 billion in belongings underneath administration. That makes them “the first independent, Singapore-headquartered VC firm that invests across Southeast Asia and India to reach this milestone,” based on the corporate.
‘Power of the web’
As many as 40 million individuals in six nations throughout the area — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand — turned new web customers in 2020, the report mentioned.
The pattern of the youthful demographic within the area being “100%, 120% online” will proceed, Anand noticed.
“And Covid is only pushing more and more consumers, more and more enterprises to do things over the internet.”
Social commerce, for instance, has a “much larger” potential than conventional e-commerce, Anand added. Social commerce includes using social media web sites akin to Facebook, Instagram and Twitter to advertise and promote services.
“We’ve not even scratched the surface of that … this region has been a very, very fragmented and a diverse geography.”
“And if you’re looking to get the power of internet to every nook and corner of this region, partnering with those local influencers, those local agents and bringing technology to them is the way to go,” he mentioned.
With increased rates of interest, inflation and a attainable recession, Anand mentioned three of its firms have deferred their IPO plans. However, the businesses will “definitely” go public in “mid to long term,” he mentioned.
“The promise of being the CEO of a publicly listed company and the benefits that come with it are definitely much more attractive than the effort for it,” he defined.
“It’s very promising that tech companies in the region can do both local and global IPOs.”
Anand added that Jungle Ventures’ recommendation for its firms is to not rush again into the market, given current volatility and supply-side constraints.
“We are seeing somewhat of a major correction … if they can, they should watch this a little bit longer before coming back to market so they have a little bit more predictability,” he mentioned.
“Our guidance overall to entrepreneurs in the region will be that, this is going to be a supply-side-constrained market and [if there is] any need to shore up supplies, they need to be more focused in their efforts.”