Charting the Chinese tech giants investing in Southeast Asia

From regulatory crackdowns to the trade war with the US, a lot has changed in China’s tech scene over the past three years.

One thing that has stayed consistent, though, is Chinese tech firms’ interest in Southeast Asia as they seek to tap opportunities in markets less saturated than their home turf.

In January 2021, Tech in Asia looked at Alibaba and Tencent’s investments in the region. We have updated our report to show what has changed for the two titans since then and which other Chinese tech firms have backed Southeast Asian startups.

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The bite of the tech winter has been felt everywhere, and China is no exception. Due to this and other factors such as a regulatory clampdown on the country’s tech sector, investment by Chinese firms into Southeast Asia has fallen since 2021.

Tech in Asia data shows that Chinese tech firms have infused a total of US$2.4 billion into Southeast Asian companies via 34 deals in 2023. In comparison, those numbers stood at 67 deals and US$9.1 billion, respectively, in 2021.

However, these figures show only one part of the picture, as they do not include details such as infrastructure investments or the Chinese firms that have pivoted towards the region in subtler ways amid the China-US trade war.

Tencent and Alibaba retain dominance

The adage “the more things change, the more they stay the same” seems to apply here, as Tech in Asia data shows that Alibaba and Tencent are still the biggest Chinese investors in Southeast Asia’s tech sector.

Since 2020, Tencent has poured a total of US$4.7 billion into Southeast Asian startups. The lion’s share was a US$2.5 billion pre-IPO round in Indonesian courier startup J&T Express.

Alibaba, Ant Group, and Alipay, meanwhile, have been collectively involved in fundraising rounds worth US$4.9 billion during the same period. Around US$3.4 billion of that amount was invested into Lazada, which Alibaba acquired in 2016 amid increasingly fierce ecommerce rivalry with Shopee and new entrants in the space. Shopee is owned by Singapore-based Sea Group, which Tencent is an investor in.

See also: Alipay+ kicks off major expansion around Asian Games, betting on inbound tourists

Lazada laid off 30% of its staff earlier this year, suggesting that it is struggling to keep up with newer players.

One such contender is the ecommerce unit of short-video app TikTok, which is owned by Chinese behemoth ByteDance. Launched in November 2022, TikTok Shop has been rapidly taking market share from incumbents like Lazada.

Earlier this year, TikTok Shop completed a merger with Indonesia-based ecommerce platform Tokopedia. The move allowed TikTok Shop to make a comeback after a regulation that took effect in October 2023 had effectively banned it in the country.

See also: Did Tokopedia waste its potential?

In exchange for a 75% stake in Tokopedia, TikTok agreed to inject over US$1.5 billion in the merged entity over time. The investment amount, however, was later updated to about US$1.8 billion.

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