Awesome! Another cross-border company received financing

This market has been criticized by sellers, but it still can’t stop the giants from entering the market!

Southeast Asia, with its fast-growing e-commerce market, great potential and high growth rate, is known as the "market of tomorrow". Chinese capital giants such as Alibaba and ByteDance have already gathered in this battlefield to dig for gold. Even employees who left Alibaba have bet heavily on this market!

Former Alibaba executives founded an independent website and received $4 million in financing

Yien.com learned that Zhiming Technology was founded in September 2021 and is headquartered in Hangzhou. It is a lifestyle brand HomingDay created for middle- and high-consumption groups in Southeast Asia . It has entered the markets of Thailand, Malaysia and Singapore through the brand's independent website homingday.com, and plans to expand to more countries.

HomingDay's product categories include kitchen and dining, storage, bathroom, small appliances, home decoration, daily necessities, office, outdoor, etc., with as many as 1,321 products on sale.

It can be seen that, unlike the low-price model of Temu and SHEIN, the target group of HomingDay has a higher unit price, which may be due to the good prediction of the future economic level of Southeast Asia and the expanding size of the middle class. The World Economic Forum predicts that by 2030, 70% of the population in Southeast Asia will become middle class, and the market size is expected to reach 4 trillion US dollars.

On October 27, 2022, HomingDay received US$4 million in angel round financing from Prologis StarRock Ventures. The funds from this round of financing will be mainly used for market expansion and supply chain construction.

In addition to receiving capital financing just over a year after its establishment , HomingDay ’s founder also has a great background!

HomingDay founder and CEO Sun Chun was formerly the general manager of Alibaba Group's Tmall home cleaning, pet and gardening industry, the number one position in Cainiao Group's overseas market, and the general manager of Tmall's supply chain and Cainiao Logistics. Partner and CTO Pane was a former Alibaba technical expert, responsible for several key projects of the group, such as the technological development of the DingTalk industry and logistics radar early warning.

There is no doubt that the gathering of capital and industry elites in Southeast Asia is their strong affirmation of this market!

ByteDance, Alibaba and other capital giants gather in Southeast Asia

Chinese capital giants have gradually strengthened their layout in Southeast Asian e-commerce .

It is reported that by the end of 2022, the number of users of TikTok, the short video giant owned by ByteDance, is expected to exceed 1.5 billion. TikTok is the fastest growing social media platform in history, with the number of users increasing by 1,800% in the past five years.

The end of short videos is monetization! Southeast Asia can be called an important battlefield for TikTok's e-commerce business . As early as 2021, TikTok Shop was launched in Indonesia and the United Kingdom, and then expanded to Vietnam, Thailand, the Philippines, Malaysia and Singapore. As of the third quarter of 2022, the number of TikTok Shop stores has exceeded 130,000.

The strong user base and popularity of short videos are the key factors for its rapid development. In October this year, a report released by market research firm Populix showed that 86% of respondents said they had used social media platforms for shopping. 45% of respondents said TikTok Shop is the most popular social media shopping platform.

Alibaba entered Southeast Asia even earlier. With its first-mover advantage and strong capital support, it has achieved remarkable results in the Southeast Asian e-commerce market.

According to a data, the top ten e-commerce platforms in six popular countries in Southeast Asia are Shopee, Lazada, Tokopedia, Bukalapak, Blibli, Carousell, Tiki, Sendo, Zalora and Qoo10. Lazada, which ranks second, is owned by Alibaba. It is worth noting that Tokopedia, which follows closely, is also controlled by Alibaba.

Founded in 2009, Tokopedia is the largest e-commerce platform in Indonesia and the most visited Indonesian website. In December 2018, Alibaba completed its lead investment in Tokopedia's G round, further deepening its control over the Southeast Asian Indonesian market after Lazada.

Even fast fashion giant SHEIN is investing in Southeast Asia in addition to deepening its presence in the European and American markets.

In July last year , there was news that SHEIN would expand its business to Singapore and Southeast Asian countries, and make Singapore its business center in Southeast Asia. It also opened independent brand sites in Singapore, Indonesia, Thailand, Vietnam and the Philippines, and plans to create an independent website in Malaysia in the future.

With giants taking the lead, cross-border sellers have also followed suit. Well-known cross-border players such as Santai Holdings, Youkeshu, and Anker Innovations have achieved certain results in the Southeast Asian market.

In June this year , Changsha Youkeshu, a subsidiary of Youkeshu, received 20 million yuan in additional capital support. It is understood that in terms of business scope, Changsha Youkeshu focuses on developing other emerging market businesses in Latin America, Southeast Asia and other areas that are not core coverage areas of traditional platforms such as Amazon .

This shows how much importance Youkeshu attaches to the Southeast Asian market.

SHEIN also failed in Southeast Asia

Compared with European and American countries, Chinese sellers have a better understanding of the cultural customs of Southeast Asian countries, so Chinese sellers have a natural advantage in developing e-commerce in Southeast Asia.

From the perspective of market development prospects, Southeast Asia is undoubtedly a blue ocean.

According to the e-Conomy SEA 2022 report , the GMV of Southeast Asian e-commerce is expected to exceed 100 billion yuan in 2025 , reaching 211 billion yuan , a year-on-year increase of 20%. At the same time, the scale of the Internet economy will reach 330 billion US dollars.

According to the latest report released by market research firm eMarketer , Southeast Asia and Latin America's cross-border e-commerce markets ranked first and second in the global e-commerce market size, and are the only two markets in the world with e-commerce sales growth exceeding 20% ​​this year . Among the top ten countries with the fastest e-commerce growth in the world, five are from Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam).

The Southeast Asian market, which has a promising development prospect, has not won much recognition from sellers. On the contrary, there are many doubts.

The first thing that has been widely complained about is the size problem. Southeast Asia is too small and the market is not unified. Many industry insiders believe that the best potential stocks in the Southeast Asian market are only Indonesia and Vietnam. In addition, because Southeast Asian e-commerce is still developing, consumers have poor shopping habits and it is very common to buy new and return old products.

The second issue is profit. An industry insider once said that Southeast Asian cross-border e-commerce has been very popular in the past two years, and many sellers have entered the market. However, compared with European and American countries, the profit of this market is really too low. The prices of many products are even cheaper than those of the domestic platform Pinduoduo. Many sellers have withdrawn from the market due to losses. The most profitable ones in the Southeast Asian market are still those training institutions.

Is Southeast Asia a tough nut to crack? In fact, even SHEIN has failed in Indonesia. SHEIN has shut down its operations in the Indonesian market on July 29, 2021. The outside world said that low traffic was an important reason for the closure. According to relevant reports, since September 2020, its average number of visits in Indonesia has been only about 5,000, which is undoubtedly a bad number for an independent station giant.

In summary, the rapidly developing Southeast Asian e-commerce is still controversial, and many sellers have withdrawn after trying, but the giants have never stopped investing in this market, because players with capital, products, and technology are more inclined to seize the high ground in rapidly developing markets.