Since Uber beat a retreat in 2018 (its operations were bought by Grab), no American company has built a significant presence in e-commerce or in ride-hailing. Ali baba still has a local presence through e-commerce firm Lazada, but, having led only two years ago, the firm has slipped into the second tier of competitors. The triumph of GoTo Group, Grab and Sea came at the expense of powerful American and Chinese rivals. They don’t want six wallets, they don’t want five e-commerce options and three food-delivery companies,” explains Patrick Cao, president of GoTo Group. “What customers want is deeper, faster digital solutions, which are not done in a fragmented way. Those transactions helped create the super-app strategy embraced by consumers. By late November deal volume had already reached $61bn, equivalent to all activity for the past decade. Mergers and acquisition activity in tech in South-East Asia exploded this year. They wanted consolidation to make the market more investable, and, by and large, have got it. The sea of red ink does not alarm investors. The two largest companies, Grab and Sea, have made a combined $17bn of net losses since the beginning of 2018. In the third quarter of the year, Sea’s losses widened to $571m, a year-on-year increase of a third. None of the big companies is reliably profitable. That no doubt contributes to the huge losses that are being racked up. Countries have widely differing income levels and infrastructure capacity. South-East Asia’s markets are anything but a contiguous economic bloc. Mark Goodridge, an equity analyst at Morgan Stanley, a bank, notes that online retail made up 6% of retail sales in the countries of the Association of Southeast Asian Nations ( ASEAN) in 2019, compared with around 15% in America and about 30% in China.īut sceptics note the region’s fragmentation. Optimists, now in the ascendant, point to a market of 650m people poised for rapid economic growth. The prospects for South-East Asian consumer tech have been alternately hyped up and talked down over the past decade. With a fleet of over 2m drivers, GoTo had transactions of $22bn last year, equivalent to 2% of Indonesia’s GDP.

The model is often referred to as a super-app or app-cluster strategy. These may be low-margin, but the transaction volumes in question are vast. It is to bring hundreds of millions of consumers together into a network of services. The precise blend varies from firm to firm, but the same idea runs through the core of each. The three companies are each some combination drawn from ride-hailing and food delivery, financial services and mobile gaming.

Internet money gross beat bank