How Vietnam is fitting into Alibaba’s plans

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Hi readers,

I’ve been having quite a terrible time, honestly. Last Thursday, the WiFi at home went down on a day where I had several calls to make, and an error with my bank on Friday meant that my card got charged twice for an expensive purchase, leading to some frantic phone calls. The icing on the cake was when my attempts at getting a McDonalds meal delivered over the weekend all failed due to an error with its payment gateway. As you can imagine, I am not the happiest camper right now.

Where am I going with this? Aside from venting my frustrations to the 20,000 or so of you who read this newsletter, what I’m trying to say is that things haven’t been great for me, just as things haven’t been great either for Alibaba. The Chinese tech giant hasn’t really been having a good time, what with Ant Group’s failed IPO and the regulatory scrutiny it’s come under. Despite the challenges, however, the firm is looking ahead, and it has some exciting plans in the works.

Today we look at,

• Why Alibaba’s got its eyes set on Vietnam
• A digital wealth and savings app helmed by a former Citigroup Indonesia director
• Other newsy highlights such as Byju’s sizable funding numbers and Malaysia’s largest telecom merger

PREMIUM SUMMARY

How groceries may be the key to Alibaba’s success in Vietnam

Chinese tech giant Alibaba – after being hit with a US$2.8 billion antitrust fine by Chinese regulators – has reported its first-ever loss this May. It’s now looking to Southeast Asia and to Vietnam in particular for its second wind.

• Why Vietnam?: With Alibaba portfolio company Tokopedia likely to go public after its merger with Gojek, it makes sense for Alibaba to focus its attention elsewhere – in this case, Vietnam. Last year, the country’s economy still grew by 2.9% despite the Covid-19 pandemic, and the number of middle-class households in Vietnam is expected to reach 17 million by 2030.
• Let’s go grocery shopping: The fast-moving consumer goods segment has emerged as the biggest gainer in Vietnam from Covid-19 restrictions, as consumers have turned to online platforms for their grocery needs. Alibaba has some kind of advantage over competitors in the grocery space, thanks to its 2016 acquisition of RedMart.
• Howdy, partner?: Alibaba recently led a US$400 million investment in Vietnam’s Masan Group, which owns supermarket chain VinMart. The combination of Alibaba’s online retail expertise, Lazada’s ecommerce platform in Vietnam, and Masan’s leading offline network could present an exciting online grocery delivery opportunity – but it’s a crowded space to be operating in, and competition will be stiff.

Read more: Why Alibaba is betting on Vietnam to reclaim Southeast Asian ecommerce

STARTUP SPOTLIGHT

Let’s go, Hugo!

Ka-ching! Singapore-based digital wealth and savings app Hugo announced that it has raised US$2 million in seed funding from 1982 Ventures and prominent family offices and angels. The firm was founded by ex-Citigroup Indonesia director David Fergusson, alongside two other co-founders, Ben Davies and Braham Djidjelli.

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