Amazon’s top honcho, Jeff Bezos, has just upped the ante in his ongoing Southeast Asia e-commerce exploration by announcing a second investment in the region.
As of last week, the American online shopping titan, through its Bezos Expeditions arm, has made its second investment in Indonesian e-commerce, participating in Lummo’s Series C round worth US$80 million. The deal came just three months after Bezos took part in a US$87 million Series B funding round for the Indonesian e-commerce platform Ula.
Alphabet Inc.’s investment arm CapitalG also took part in the Series C round in a unique Indonesia deal for the unit. Other investors include London-based Hedosophia and Lazada’s founder Maximilian Bittner.
The revelation that Bezos injected his money into Lummo has made headlines a month after the company’s announcement. This second funding will give Bezos a toehold in Southeast Asia’s largest e-commerce market.
Formerly BukuKas, Lummo is a direct-to-consumer SaaS startup with two applications: e-commerce enabler solution LummoShop (previously called Tokko) and accounting tool BukuKas.
“We are honored to have Jeff Bezos’ support in this Series C investment round as we prime our business for exponential growth over the coming months and years,” said Lummo founder and CEO Krishnan Menon.
Menon told DealStreetAsia that Lummo’s Series C funding would be used to enhance its product offerings through technological advancements such as chat commerce, catalogue integration, custom domains and websites, multiple platform management, and personalized features for branding.
In 2021, the US$53 billion e-commerce market in Indonesia was dominated by Tokopedia and Shopee, according to Momentum Works. Both companies have maintained close competition for first place as both held the highest e-commerce market shares in Indonesia last year at 37 and 35 %, respectively.
With the growing e-commerce market, a population of more than 270 million, an increasing middle class, and over 70% of the population now owning smartphones, Indonesia presents Bezos with a wide-open market that he can conquer. But whether Amazon enters the Southeast Asia market in full force remains to be seen.
Analysts at The Ken think that Bezos seems to be using the Indonesian market as a launchpad into Southeast Asia, which is still not that attractive for Amazon.
According to them, this could be partly attributed to Indonesia’s tendency to flip flop on regulations, from opening e-commerce to foreign direct investment in 2016 to recently implementing regulation through the major Omnibus law reform. Other reasons could be the country’s low import tax threshold and Indonesia’s geography, making other areas very difficult to reach.