Southeast Asia can certainly be considered a market that is under-served by prominent Web firms. Though there is plenty of potential in the region, a mixture of languages, culture and differing stages of consumerism are just some of the reasons that international brands like Amazon, Apple, eBay and others offer the region’s 600 million plus population little in the form of localized services.
That gap is one that notorious incubator Rocket Internet is looking plug, as it plans an expansion that, from tomorrow, will see it operate three Web-based services across five of the region’s most significant markets — Indonesia, Malaysia, Philippines, Singapore, Thailand — and Taiwan.
Southeast Asia’s potential
According to a source within the Germany-headquartered firm, which is renowned for aggressively building clones of popular services, it is all set to ‘soft launch’ local versions of Zappos-like Zalora and Amazon rip-off Lazada while it will launch a new service in the form of Food Panda.
Many of the sites are already public; Zalora launched in Thailand earlier this month and it has been officially up and running in Singapore and Malaysia since December, as SG Entrepreneurs noted, while Lazada is live too. However, the expansion represents Rocket going beyond individual markets with the aim of tapping into the potential of Southeast Asia as a region.
On a hiring spree
In Thailand, for example, we’ve been informed that it will hire 300 staff members to cover all operations, from buying to warehouses management, logistics and marketing. That figure is in addition to its existing staff of less than 50, who have been in roles in Bangkok for a couple of months now.
Our source confirmed that its hiring policy is similar across its other markets, which means the it is looking at a region-wide staff in excess of 1,000 people. That’s quite something for any Web firm in Southeast Asia, let alone a new one.
Not visionary but effective
While the company does not win plaudits for its vision, it has developed a strong reputation for building and scaling Web services quickly and with much success. The most notable example being CityDeal, which it sold to Groupon for $126 million just one year after founding it.
This chart from the Economist neatly summarizes the successful sales that the Samwer brothers, who own and run Rocket Internet, have overseen:
Making a difference
The arrival of Rocket Internet’s services could bring some much needed competition to parts of Southeast Asia. While the business model may not impress purists in the tech industry, end users are always more concerned with the goods and services on offer, many are unlikely to even be aware of Rocket Internet.
Group buying site Ensogo has already shown the possibilities of bringing Western services to market in Southeast Asia. The company stormed the local market in Thailand and the Philippines before being bought by industry giant LivingSocial, which beat off competition from Groupon to secure the deal.
It will not be plain sailing for Rocket Internet, as each market will require its own approach to negotiate the unique challenges but, with plans to recruit locally and in large numbers, it can bring consumers new and interesting options.
On the business side of things, if its services can gain significant traction then, given the potential growth of smartphones and other Web-enabled devices in Southeast Asia, they could develop into attractive launchpads for larger firms with an eye on the region.
We’ll have more details when we speak to the company in an official capacity but, for now, the clones are coming.