The race to conquer Indonesia’s digital wallet space

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Hello readers,

While queuing at my favorite hawker stall some months ago for lei cha, a Hakka dish that’s better known as thunder tea rice, I belatedly realized that I didn’t have any cash on hand. The alternative mode of payment was GrabPay, which I hadn’t set up on my phone (yep, I fall in that camp).

Left with little choice – making the pilgrimage to the other end of the hawker centre to withdraw cash seemed painful – I opted for the lesser evil by making my first digital wallet payment.

Whatever you think of me, I’m not alone. In Indonesia, merchants are seeing a sharp increase in consumers opting for digital wallets like ShopeePay, Ovo, and GoPay in favor of bank transfers.
Today we look at,

• Why ShopeePay’s foray into Indonesia is making Ovo and GoPay nervous
• The SaaS startups graduating from Shanghai’s Chinaccelerator
• Other newsy highlights such as Ant Group’s once more delayed IPO, and fresh funds for Chinese edtech startup EEO Education

PREMIUM SUMMARY

ShopeePay is making seismic shifts in Indonesia’s digital payments space

Indonesia’s digital payments space is changing and fast. More online and offline merchants in the country have begun to offer e-wallet payment options – something that would have seemed unimaginable as recently as 2018 – to meet the growing demand from increasingly savvy consumers. A key player in the space is Shopee, whose digital wallet product ShopeePay and “buy now, pay later” service ShopeePay Later are putting rivals GoPay and Ovo on their toes.

• A timed rebirth: Despite launching its digital financial services six years ago, Sea Group only consolidated these products under its new brand, SeaMoney, in Q4 2019. The rebranded arm offers e-wallet services, payment processing, digital credit card, and other financial products through various brands including AirPay, ShopeePay, and ShopeePay Later.
• A calculated bet: ShopeePay’s late entry into Indonesia in 2019 seems carefully timed. It debuted in the market two years after Gojek’s GoPay and Tokopedia- and Grab-affiliated Ovo, allowing it to ride on its rivals’ efforts to educate consumers. In Q2 2020, 45% of transactions on Shopee were made with its in-app digital wallet.
• Quiet growth: Sea Group acknowledges that its markdowns and promotions have fueled its mobile wallet’s growing popularity in Indonesia. But the tech company had been hard at work securing a formal e-money license from as early as 2018 – one that even Tokopedia and Bukalapak failed to get.

Read more: How Shopee’s sleeping giant struck while its rivals fought fire

NEWS SPOTLIGHT

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