Rocket Internet's Asian Adventures

Posted: Dec 31 2013, 3:41pm CST | by , in News


Rocket Internet's Asian Adventures
Photo Credit: Forbes

Entering with fashion site Zalora in the Philippines in late 2011, Germany’s Rocket Internet has since been hatching dozens of copycat e-commerce sites in Southeast Asia and the general vicinity–and quickly shutting down some of them. It’s invested at least $200 million already in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam–perhaps up to $300 or $400 million if Rocket start-ups are spending tens of million of marketing dollars in each country, as rumored.

(As for the general vicinity: Rocket start-ups seems to be more successful in Australia and India than in Korea, Taiwan or, most especially, China.)

Rocket’s founders, the three German Samwer brothers, still have a reputation as cloners, flippers and operators of grueling, ruthless workplaces with high staff churn. Rocket executives readily acknowledge that their sites are copycats, usually of sites pioneered in the U.S., but nowadays Rocket’s buildup and execution abilities are always central to the media message

Rocket may well assume the exit door is a long way off for sprawling, logistics heavy Amazon-like Lazada and Zappos-like Zalora. After all, the Samwer brothers don’t seem in any hurry to offload five-year-old Zalando, the Zappos lookalike with sites throughout western Europe. (Asia’s Zalora is thus more accurately described as a clone of a clone.). First, Zalora and Lazado need to make a profit, which might not be until 2015 for Zalora.

Rocket’s lighter weight Southeast Asian start-ups, such as Wimdu, Easy Taxi and Foodpanda, however, don’t require the same intensive capital investment in inventory, warehouses and staff training. If they aren’t meeting their KPIs, they can be shut down with no formal announcements and, apparently, little warning to staff. That’s what happened this year to OfficeFab’s four office supply sites after a year of operations and Home24’s two furnishings sites after a mere few months.

Somewhere in between the demise of OfficeFab and Home24, Rocket gave up on a Square-ish mobile payments service called Payleven in the region.(For that matter, Zalora sites didn’t survive even a year in China and Taiwan, where competition is more intense and online shopping consumes a much greater share of retail sales than in Southeast Asian countries.)

Unlike multi-product Zalora and Lazado, the lightweight platforms in Southeast Asia are entering national or city markets where head-to-head clones usually already exist. They also differ from Zalora and Lazado in that  may even be headed by a local MBA instead of a foreigner imported fresh from McKinsey. But they still might emulate the model the Samwer brothers pioneers with their clones of eBay, Groupon and Facebook in Europe: if a site wins a substantial market share, the competition or potential competition may quickly buy it out.

AirBnb already exists in the countries were Rocket’s copy, Wimdu, has set up homes.  Pinspire, a blatant ripoff of Pinterest, but maybe Rocket has disavowed it already since Pinspire isn’t even listed on the main Rocket Site

Easy Taxi Coming to Singapore

It’s the taxi apps and food delivery wars where competition is more interesting and marketing spending may make the difference:

Easy Taxi is Rocket’s newest foray in the region. The taxi-booking-via-smartphone app arrived late in 2013 in Bangkok and Hong Kong, having launched mid-year in Kuala Lumpur, Manila, Johor Bahru and Seoul. All the cities already had at least one online booking servicing, usually GrabTaxi, formerly called MyTaxi and still known as MyTeksi in Malaysia. Singapore, next up for an Easy Taxi entry early in 2014, already has SMS-a-Taxi.

Can there really be that much profit to be made from a percentage of a taxi booking? Guess so. Rocket has Easy Taxi ventures all over Latin America, although the original, MyTaxi, began in San Francisco in 2009.

Starting up such an app company boils down to intensive marketing on two fronts. First, the potential customers, maybe companies as well as individuals, must be persuaded to download the free app to a smartphone. Then the taxi company or taxi drivers—that would be tens of thousands in Bangkok and Manila–have to be persuaded to sign on to accept booking messages. Why would they choose one app over another? For Easy Taxi, the drivers are receiving the entire booking fee (about 60 US cents in Bangkok) the passenger pays. Eventually, the fee will go to the company.


After success in Latin America and eastern and western Europe, Foodpanda entered urban markets in Malaysia, Philippines, Singapore, Thailand and

Source: Forbes

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