Lazada, Alibaba’s Southeast Asia e-commerce business, gets a new CEO

Alibaba has reshuffled the leadership at Lazada, its e-commerce firm in Southeast Asia, after CEO Lucy Peng — an original Alibaba co-founder — stepped down to be replaced by Lazada executive president Pierre Poignant after just nine months in the role.

Alibaba owns more than 90 percent of Lazada but it has been involved in the business since April 2016 when it bought 51 percent of Lazada for $1 billion from Rocket Internet. It invested a further $1 billion last year to increase its equity to around 83 percent and earlier this year it raised its stake even higher with an additional $2 billion injection.

That last investment saw Peng, formerly executive chairman of Ant Financial, become Lazada CEO in place of Max Bittner, who had been installed by former owner Rocket Internet back in 2012. Poignant also arrived at the company in 2012 and he worked alongside Bittner as Lazada’s COO. Since then, he has been head of its logistics division before a brief five-month stint as executive president prior to this new role.

Lazada operates in six countries across Southeast Asia, but there are very few indicators of how the business is performing.

Alibaba’s own financial reports bundle Lazada with the firm’s other international businesses. Collectively, they grossed RMB 4.5 billion ($650 million) in the last quarter. That’s an impressive 55 percent revenue jump but it accounts for a small portion of Alibaba’s total revenue of RMB 85.15 billion ($12.4 billion) in Q2 2019.

Lazada took part in the recent 11/11 Singles’ Day sale mega day. Alibaba as a whole grossed $31 billion in GMV during the 24-hour period but the company did not break out numbers for Lazada. Lazada itself said it broke records, but the only data it provided was that 20 million shoppers were “browsing and grabbing” deals on its site — you’ll note that statement doesn’t explicitly provide sales. We did ask at the time but Lazada declined to give sales or revenue numbers.

Against that backdrop, it is hard to say whether Peng was brought in as a stop-gap while Lazada searched for a new CEO, or whether her original remit was to preside over a revamp of the business. Lazada has certainly gone about installing new executive teams in many local markets, according to sources within the company, but it isn’t clear whether Peng is being recalled as planned or whether things didn’t work out as expected.

The news follows Alibaba’s second investment in Tokopedia, Indonesia’s leading e-commerce platform, yesterday.

Speaking on the rivalry, Tokopedia CEO William Tanuwijaya told TechCrunch that he sees differences between the two.

“We see Lazada having a different business model than us: Lazada is a hybrid of retail and marketplace model, whereas Tokopedia is a pure marketplace. Lazada is [a] regional player, we are a national player in Indonesia,” he said.

Pokémon GO trainer battles are now live (for some players)

Last week we did a deep dive on how Pokémon GO’s new (and long overdue) player-versus-player battle system would work. The only thing we didn’t know at the time was when, exactly, it would actually start rolling out.

The answer: tonight.

Just a few days ago, Niantic started shipping an update to the app that contained everything required for PvP, but they’d yet to actually flip the switch to turn it on. According to a tweet that just went live from the Pokémon GO account, it seems said switches have just been flipped:

Calling all level 40 Trainers. Your time has come to #GOBattle? Trainers of lower levels, please stand by, as we will be rolling Trainer Battles out to more levels soon. pic.twitter.com/Rf6NmFygE6

— Pokémon GO (@PokemonGoApp) December 13, 2018

One catch (but one noted as likely in our initial post) is that it’s not available to everyone right off the bat. As with many of GO’s newer features, it’ll go live for higher level players first. More specifically, only players who’ve hit the level cap of 40 will get access to PvP immediately, with plans to roll it out to others in the coming days. It’s done like this partly to reward the most dedicated players for their efforts… but it’s also an easy way for them to roll things out gradually to double check that nothing explodes.

Update: Well, that was quick. Within an hour of launch, Niantic has opened PvP up to anyone over level 20.

(If you’re a sufficient level and for some reason don’t see the PvP stuff, Niantic says a reset of your app should fix it.)

Waiting for it to be rolled out to your level? Want a refresher on how it’ll all work while you wait? Here’s our breakdown.

Feds like cryptocurrencies and blockchain tech and so should antitrust agencies

Thibault Schrepel
Contributor

Thibault Schrepel is an Assistant Professor in the Department of Public Economic Law at Utrecht University and a reviewer at the Stanford Journal of Blockchain Law & Policy.

While statements and position papers from most central banks were generally skeptical of cryptocurrencies, the times may be changing.

Earlier this year, the Federal Reserve of Saint Louis published a study that relates the positive effects of cryptocurrencies for privacy protection.

Even with the precipitous decline in value of Bitcoin, Ethereum and other currencies, the Federal Reserve author emphasized the new competitive offering these currencies created exactly because of the way they function, and accordingly, why they are here to stay.

And antitrust authorities should welcome cryptocurrencies and blockchain technologies for the same reason.

Fact: crypto-currencies are good for (legitimate) privacy protection

In the July article from Federal Reserve research fellow Charles M. Kahn, cryptocurrencies were held up as an exemplar of a degree of privacy protection that not even the central banks can provide to customers.

Kahn further stressed that “privacy in payments is desired not just for illegal transactions, but also for protection from malfeasance or negligence by counterparties or by the payments system provider itself.”

The act of payment engages the liability of the person who makes it. As a consequence, parties insert numerous contractual clauses to limit their liability. This creates a real issue due to the fact that some “parties to the transaction are no longer able to support the lawyers’ fees necessary to uphold the arrangement.” Smart contracts may address this issue by automating conflict resolution, but for anyone who doesn’t have access to them, crypto-currencies solve the problem differently. They make it possible to make a transaction without revealing your identity.

Above all, crypto-currencies are a reaction to fears of privacy invasion, whether by governments or big companies, according to Kahn. And indeed, following Cambridge Analytica and fake news revelations, we are hearing more and more opinions expressing concerns. The General Data Protection Regulation is set to protect private citizens, but in practice, “more and more individuals will turn to payments technologies for privacy protection in specific transactions.” In this regard, cryptocurrencies provide an alternative solution that competes directly with what the market currently offers.

Consequence: blockchain is good for competition and consumers

Indeed, cryptocurrencies may be the least among many blockchain applications. The diffusion of data among a decentralized network that is independently verified by some or all of the network’s participating stakeholders is precisely the aspect of the technology that provides privacy protection and competes with applications outside the blockchain by offering a different kind of service.

The Fed of St. Louis’ study underlines that “because privacy needs are different in type and degree, we should expect a variety of platforms to emerge for specific purposes, and we should expect continued competition between traditional and start-up providers.”

And how not to love variety? In an era where antitrust authorities are increasingly interested in consumers’ privacy, crypto-currencies (and more generally blockchains) offer a much more effective protection than antitrust law and/or the GDPR combined.

These agencies should be happy about that, but they don’t say a word about it. That silence could lead to flawed judgements, because ignoring the speed of blockchain development — and its increasingly varied use — leads to misjudge the real nature of the competitive field.

And in fact, because they ignore the existence of blockchain (applications), they tend to engage in more and more procedures where privacy is seen as an antitrust concern (see what’s happening in Germany). But blockchain is actually providing an answer to this issue ; it can’t be said accordingly that the market is failing. And without a market failure, antitrust agencies’ intervention is not legitimate.

The roles of the fed and antitrust agencies could change

This new privacy offering from blockchain technologies should also lead to changes in the role of agencies. As the Fed study stressed:

“the future of central banks and payments authorities is no longer in privacy provision but in privacy regulation, in holding the ring as different payments platforms offer solutions appropriate to different niches with different mixes of expenses and safety, and with attention to different parts of the public’s demand for privacy.”

Some constituencies may criticize the expanding role of central banks in enforcing and ensuring privacy online, but those banks would be even harder pressed if they handled the task themselves instead of trying to relinquish it to the network.

The same applies to antitrust authorities. It is not for them to judge what the business model of digital companies should be and what degree of privacy protection they should offer. Their role is to ensure that alternatives exist, here, that blockchain can be deployed without misinformed regulation to slow it down.

Perhaps antitrust agencies should be more vocal about the benefits of cryptocurrencies and blockchain and advise governments not to prevent them.

After all, if even a Fed is now pro-crypto-currencies, antitrust regulators should jump on the wagon without fear. After all, blockchain creates a new alternative by offering real privacy protections, which ultimately put more power in the hands of consumers. If antitrust agencies can’t recognize that, we will soon ask ourselves: who are they really protecting?

TNB Aura closes $22.7M fund to bring PE-style investing to Southeast Asia’s startups

TNB Aura, a recent arrival to Southeast Asia’s VC scene, announced today that it has closed a maiden fund at SG$31.1million, or around US$22.65 million, to bring a more private equity-like approach to investing in startups in the region.

The fund was launched in 2016 and it is a joint effort between Australia-based venture fund Aura and Singapore’s TNB Ventures, which has a history of corporate innovation work. It reached a final close today, having hit an early close in January. It is a part of the Enterprise Singapore ‘Advanced Manufacturing and Engineering’ scheme which, as you’d expect, means there is a focus on hardware, IO, AI and other future-looking tech like ‘industry 4.0.’

The fund is targeting Series A and B deals and it has the firepower to do 15-20 deals over likely the next two to three years, co-founder and managing partner Vicknesh R Pillay told TechCrunch in an interview. There’s around $500,000-$4 million per company, with the ideal scenario being an initial $1 million check with more saved for follow-on rounds. Already it has backed four companies including TradeGecko, which raised $10 million in a round that saw TNB Aura invest alongside Aura, and AI marketing platform Ematic.

The fund has a team of 10, including six partners and an operating staff of four. It pitches itself a little differently to most other VCs in the region given that manufacturing and engineering bent. That, Pillay said, means it is focused on “hardware plus software” startups.

“We are very strong fundamentals guys,” Pillay added. We ask what is the valuation and decide what we can get from a deal. It’s almost like PE-style investing in the VC world.”

A selection of the TNB Aura team [left to right]: Samuel Chong (investment manager), Calvin Ng, Vicknesh R Pillay, Charles Wong (partners), Liu Zhihao (investment manager)

Another differentiator, Pillay believes, is the firm’s history in the corporate innovation space. That leads it to be pretty well suited to working in the B2B and enterprise spaces thanks to its existing networks, he said.

“We particularly like B2B saas companies and we believe we can assist them through of our innovation platforms,” Pillay explained.

Outside of Singapore — which is a heavy focus thanks to the relationship with Enterprise Singapore — TNB Aura is focused on Indonesia, the Philippines, Thailand and Vietnam, four of the largest markets that form a large chunk of Southeast Asia’s cumulative 650 million population. With an internet population of over 330 million — higher than the entire U.S. population — the region is set to grow strongly as internet access increases. A recent report from Google and Temasek tipped the region’s digital economy will triple to reach $240 billion by 20205.

The report also found that VC funding in Southeast Asia is developing at a fast clip. Excluding unicorns, which distort the data somewhat, startups raised $2.6 billion in the first half of this year, beating the $2.4 billion tally for the whole of 2017.

There are plenty of other Series A-B funds in the region, including Jungle Ventures, Golden Gate Ventures, Openspace Ventures, Monks Hill Ventures, Qualgro and more.