Rocket Internet is increasing its focus on Asia after it announced that it would launch one new venture in the region per quarter.
The initiative is being managed by Asia Pacific Internet Group, the joint venture that Germany-based Rocket Internet set up with Qatari telecom firm Ooredoo last year. Rocket Internet first came to Asia in 2012. Today Asia Pacific Internet Group claims an existing portfolio of 14 companies across 15 countries, while GFG — Rocket Internet’s international fashion site arm — counts business in Asia Pacific too.
Rocket Internet is perhaps strongest — or, rather, most strongly invested — in Southeast Asia, where e-commerce companies Lazada and Zalora do business. Both companies have collectively raised nearly one billion dollars in investment capital — the last raise saw Lazada land $250 million in November 2014 — but neither operation is profitable at this point. Asia Pacific Internet Group initiatives include car sales site Carmudi, maid rental service Helping, real estate site Lamudi and struggling Uber rival Easy Taxi.
It’s worth pointing out, though, that the new initiative is primarily targeting at emerging markets in Asia Pacific. Or, at least, that Rocket Internet isn’t targeting China or seemingly the more mature markets of East Asia.
“We are operating in highly diverse markets — from very developed ones such as Singapore and Australia to rising stars such as Myanmar and Pakistan. Our portfolio of companies fits the macroeconomic trends of different regions and the demand for new online businesses,” Hanno Stegmann, CEO of APACIG, said in a statement.
The first launch from this new strategy is online beauty service Vaniday, which started out in Latin America but is now launching in Australia and will later come to markets in Southeast Asia.
Rocket Internet has already tried and failed to do beauty e-commerce in Asia. Glossybox, a Birchbox-like beauty box service, withdrew from Asia in 2013 and sold off parts of its business to rivals after finding lackluster demand. Vaniday is different because it is a straight up e-commerce venture, which puts Asia Pacific Internet Group into a new vertical in the region, but it will be interesting to see what lessons have been learnt from the Glossybox experience.
Rocket Internet has attracted plenty of criticism for its approach to Asia, which seems based on large fundraising/spending, spreadsheet analytics and further ‘bets’. While none of its ventures in the region are profitable at this point — most form part of larger, global e-commerce businesses — the company has brought talent into new parts of Asia (such as Pakistan, and Southeast Asia) while many of its hires have gone to start ventures of their own so there have been benefits for local startup ecosystems.