Chinese ecommerce giant JD has struggled in Southeast Asia. Given that fact, the company has been looking to divest from holdings in Indonesia and Thailand where it seems unlikely to close the gap on Shopee and Lazada.
In Indonesia, the organization announced it was shutting its logistics outfit while Tech in Asia reported JD.id offline stores in Jakarta are emptying stock and holding clearance sales. Its operations there are a joint venture with Provident Capital which means potential investors would need to undergo a full rebranding.
It is a much different story in Thailand where it teamed up with beloved retail player Central. And while the JD Central joint venture has struggled to gain users, working with one of the Kingdom’s most visible brands, and a well-regarded business partner, may be more palatable to potential investors.
So, will anyone bail JD out of its Thailand investment? Here is a look at some of the potential investors.
Also Interesting: Thailand continues its rapid embrace of digital financial services
Who could takeover JD in Thailand?
Shopee or Lazada
Should either Shopee or Lazada buy out JD’s Thailand operations, it would become the Kingdom’s unquestioned e-commerce leader. However, given how much money each company has spent on branding over the past five years, the Central name and partnership would have little significance. They would be buying it for the users.
Shopee seems the more likely of the two to acquire JD’s stake in Thailand as Sea Group could see it as a last roll of the dice to overtake Lazada in their battle for supremacy. But with both brands more focused on turning a profit, the move doesn’t make a lot of sense for either.
How likely is it: 5 out of 10
It is possible, but the cost seemingly outweighs the benefits for both Shopee and Lazada.
Capital A, formerly AirAsia Group
If you would have said AirAsia would be in the ride sharing business in 2019, people would have dismissed you as crazy. That is exactly what happened, though/ Would the airline-cum-conglomerate try its hand in e-commerce by buying out JD’s operations in Thailand and Indonesia? It is certainly not out of the question. Especially if it wants its super app to truly be super/
How likely is it: 4 out of 10
CEO Tony Fernandes has never been afraid to take risks and this could represent his best chance to get into the e-commerce sector.
Flash Express
Thailand’s first unicorn closed THB15 billion (US$447 million) in Series F funding towards the end of last year. Additionally, the startup has been willing to think outside the box. A partnership between Flash Express and Central makes sense on the surface. The former handles all logistics while the latter can focus on sales and marketing.
How likely is it: 2 out of 10
It would be interesting, and the fit with Central Group could work. A lack of cash makes this more of a fun hypothetical than anything else.
Amazon
This would be an odd time for Amazon to make its long-awaited debut in Southeast Asia. But there is a case to be made. For starters, it can learn from mistakes others have dealt with in Thailand and, should it want, Indonesia. Second, it can takeover JD’s foundation meaning a lower initial investment. Finally, the US-company could benefit from disenchantment both buyers and sellers have with Shopee and Lazada.
How likely is it: 3 out of 10
It’s a cool theory, but Amazon has shown no desire to enter the e-commerce space in Southeast Asia.
Others
Let’s eliminate some potential partners first. Central Group has a property development arm that eliminates the possibility of another real estate developer entering the mix. It also doesn’t have the ability to manage an entire e-commerce platform on its own which would exclude investment from banks and private equity. Other names, such as Rakuten, have already decided to leave the region.
Would Qoo10 be enticed to enter Thailand (and potentially boost its Indonesian holdings) by taking over JD’s stake in local joint ventures? It doesn’t really fit the firm’s profile as it has been more interested in South Asia. At the right price, though, it makes sense.
Keep Reading: Sea Group and Grab proving to be a drag on other Southeast Asia startups
