Alibaba Expands Its Grip In Southeast Asia By Investing To Indonesia's Tokopedia

Chinese e-commerce giant Alibaba Group has led a $1.1 billion (Rp14 trillion) investment round into Indonesian startup unicorn Tokopedia to become a minority shareholder.

Also participating in the round include a number of existing Tokopedia backers.

"We have always thought of Alibaba as our teacher and role model. Today, we are excited to welcome them as a shareholder and we believe that our partnership will further accelerate Tokopedia’s mission, to democratize commerce through technology," said Tokopedia CEO and co-founder William Tanuwijaya in a statement.

"The partnership with Alibaba will enhance the scale and quality of Tokopedia’s offerings to its customers and make it easier for merchants and partners to do business across the archipelago and beyond."

Daniel Zhang, CEO of Alibaba Group, commented: "Alibaba and Tokopedia have a shared mission of helping small and medium enterprises in achieving success in its business. We are very delighted to partner with Tokopedia in serving Indonesian customers."

The investment plan began back in July when Alibaba was in talks to lead a funding round in Tokopedia. Alibaba's investment in the Indonesia-based company is one of its largest, after its over $2 billion investments in the Southeast Asia, including buying a stake in the region's e-commerce leader Lazada Group SA.

With Alibaba investing in Tokopedia, the Chinese titan is getting a foothold in Indonesia's e-commerce landscape, and is expected to turn Tokopedia and Lazada into allies.

Tokopedia is one of Indonesia’s largest online marketplaces. Founded back in 2009 by William Tanuwijaya and Leontinus Alpha Edison, Tokopedia provides a customer to customer (C2C) retail by providing a platform for individual entrepreneurs and small/medium businesses to open online stores.

Before Alibaba, Tokopedia received its initial seed funding from PT Indonusa Dwitama in 2009 for Rp2.5 billion. In the following years, the company that goes with the name PT Tokopedia, attracted capital injections from global venture capitals such as East Ventures in 2010, CyberAgent Ventures in 2011, NetPrice in 2012, and SoftBank Ventures Korea in 2013.

In October 2014, Tokopedia managed to make history as the first technology company in Southeast Asia to receive a $100 million investment (about Rp1.2 trillion) from Sequoia Capital and SoftBank Internet and Media Inc (SIMI).

And in April 2016, Tokopedia raised another $147 million in its financial round.

That funding round, valued the company at well over a a billion dollars (unicorn status). This brought the total amount raised by SoftBank-backed Tokopedia to $247 million, before Alibaba steps in.

In 2017, Tokopedia has more than 7.5 million transactions per month with a 10-20 percent monthly growth rate. About 69 percent users access Tokopedia using mobile devices, but the most transactions still happen through the desktop version of the site.

In Indonesia, Tokopedia is ranked the eight most popular website in the country, beating Twitter and also Wikipedia. It is also the most visited local site in Indonesia.