PLDT invests P19.6B in German owner of e-commerce sites Zalora, Lazada

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By Tom Noda

With an eye on the booming e-commerce market, dominant carrier PLDT has signed a partnership agreement with Rocket Internet, investing ?333 million or P19.6 billion for a 10-percent stake in the German-based online platform company.

Among Rocket Internet’s most prominent brands include Southeast Asian e-commerce businesses Zalora and Lazada, as well as cab hailing app Easy Taxi.

PLDT big boss Manny V. Pangilinan answers questions from the media during the announcement of the partnership on Thursday in Makati City. He is flanked by Smart chief wireless advisor Orlando Vea and PLDT president Napoleon Nazareno
PLDT big boss Manny V. Pangilinan answers questions from the media during the announcement of the partnership on Thursday in Makati City. He is flanked by Smart chief wireless advisor Orlando Vea and PLDT president Napoleon Nazareno

PLDT president and CEO Napoleon Nazareno termed the agreement as a “global strategic partnership” that seeks to drive the development of online and mobile payment solutions that involves providing products and services for the so-called “unbanked, uncarded, and unconnected” in emerging markets.

“Our investment demonstrates our commitment to the global Internet market and our belief in the powerful synergies between e-commerce and mobile payments, particularly in developing economies,” Nazareno said

Nazareno said the partnership is expected to complement PLDT’s experience and intellectual property in mobile payments and remittance platforms with Rocket’s global technology platform for the rapid creation and scaling of consumer Internet businesses outside the US and China.

Headquartered in Berlin, Germany, Rocket has more than 20,000 employees in its network of companies across over 100 countries, with aggregated revenues in excess of ?700 million in 2013.

Aside from Zalora and Lazada, Rocket also owns Internet brands Dafiti, Linio, Jumia, Namshi, Lamoda, Jabong, Westwing, Home24 and HelloFresh, in Latin America, Africa, Middle East, Russia, India, and Europe.

Besides e-Commerce and marketplaces, financial technology and payments comprise Rocket’s third sector where it anticipates numerous and significant growth opportunities.

According to PLDT chairman Manuel V. Pangilinan, the telco’s first steps after forging the partnership is to enable more people to access the Internet by offering more affordable service packages.

“This move is in line with PLDT?s strategy of providing relevant and value-enhancing services to its customers,” Pangilinan said. “We will continue to pursue further digital partnerships as one of our key strategic initiatives to drive growth and create value for our stakeholders.”

Pangilinan being interviewed by the media with top lieutenant Ray Espinosa beside him
Pangilinan being interviewed by the media with top lieutenant Ray Espinosa beside him

Orlando Vea, chief wireless advisor of PLDT’s wireless subsidiary Smart Communications, said e-commerce will make inroads anywhere and will probably be the new norm in the near future as he cited the growth of other e-commerce companies.

“Globally, Alibaba has made $5.6 billion in revenues, Amazon around $74 billion. It is now the ninth top retail company in the world and by 2018, Amazon is forecast to become the second biggest retailer worldwide,” Vea said.

He said the market opportunity for e-commerce in Asia is enormous since the population in most of its countries in general is around 20 percent carded and about 60 to 70 percent uncarded or unbanked people.

“It’s almost reflective of the Philippines, wherein one to two percent of the population transact to e-commerce,” Vea said. “But we believe the emerging markets just like [SEA region] will probably be the bigger adopters of e-commerce than the first world.”

Vea noted the ongoing surge of smartphone and tablet users in the Philippines, brought about by the arrival of cheaper brand devices, will contribute to the growth of e-commerce in the Philippines.

He also cited that the Philippines is the only country in the world today that has a global patent from Smart that enables people using their mobile phones to lock their credit card, ATM card, and bank accounts. “It’s called lock by mobile and we will export that globally.”

Smart has recently been branded as a global pioneer in mobile banking and mobile wallet services. It has introduced several world-first mobile payment innovations in domestic and global markets, including markets where up to four out of five people are “unbanked”.

Its services include online money transfers, payments, disbursement, banking and security, and it has been recognized with awards from the United Nations, USAID, and the GSMA.

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