#29: Truth in eCommerce & Last-mile with Alan Hellawell of Alpha JWC Ventures

Truth in eCommerce & Last-mile with Alan Hellawell of Alpha JWC Ventures Featured Image

Alan Hellawell is the Venture Partner of Alpha JWC Ventures. Alpha is a successful Indonesia-focused venture capital firm that primarily invests in early-stage tech businesses such as Style Theory, Carro, Kopikenagan, Gudangada and has earned it the moniker of unicorn breeder in a Forbes article.

Prior to this, Alan is also the Chief Strategy Officer at SEA Limited, the parent company of Garena, Shopee, and Airpay, which he was responsible for the overall corporate strategy of the group. Alan was also the managing director of Deutsche Bank prior to SEA Limited and was Deutsche Bank Asia’s #1 ranked analyst for four years running.

Listen to the full discussion here:

  • Stream by clicking here.
  • Download as an MP3 here.

 

 

Connect with the Guest:

Alan Hellawell: Linkedin

Some of the highlights from the podcast:

  • The future of E-commerce in Southeast Asia
  • eCommerce in Indonesia – can the market accommodate four major marketplaces
  • Will we see consolidation in marketplaces soon
  • How long can investors continue to ignore losses in the industry and think equally about EBITDA instead of just top-line growth as a key metrics
  • E-commerce platforms switching to in-house delivery
  • How a coffee chain became one of the fastest-growing startups in Indonesia
  • What do VC firms look for in a pitch deck

Show notes:

  • [01:10] Maybe we could start with a short introduction so that our audience can get to know you as well. 
  • [02:48] Could you share some thoughts about the economy in Southeast Asia in terms of e-commerce and where it is located?
  • [04:33] Do you think Southeast Asia will be able to mimic the kind of success the US and China have in their country?
  • [06:19] Given that there are four major market places in Indonesia namely Tokopedia, Shopee, Lazada, and Bukalapak fighting for the same market share. How do you foresee this fence out? And do you foresee M&A happening in the near future?
  • [07:00] I expect markets like Indonesia, or maybe Vietnam, would be capable of supporting at most 2 marketplaces plus maybe a 1P marketplace, not four.
  • [08:17] If I were a betting man, within two to three years, I would see the majority of the market in the hands of Tokopedia and Shopee in Indonesia.
  • [08:29] I think that Lazada has a value proposition, which remains very relevant to the Indonesian market and specifically urban markets and commoditized goods.
  • [09:04] I’ve never come across a successful case of e-commerce M&A globally. And I think the problem is everyone believes that e-commerce is 90% retail and 10% E meaning these businesses are so operationally intense, it’s almost impossible to stitch together two very different business models. 
  • [10:25] How long can the investors continue to ignore the losses on the eCommerce platforms and think equally about EBITDA instead of just top-line growth as key metric?
  • [13:41] Marketplace based e-commerce is structurally some of the most profitable businesses in the world.
  • [14:18] Facebook released Facebook Shop, how do you see this plays out in the ecosystem given that the marketplace is getting crowded?
  • [18:00] What would make a formidable player in the eCommerce logistics space? And is there one player that stands out in your mind right now? Could you tell us a reason behind it as well?
  • [19:39] I would say broadly speaking, the new business models are now much more purpose-driven than they were even six months ago.
  • [21:03] Some eCommerce players have reached the stage of 70% to 80% deliveries done in house, do you think this is sustainable in a way? What do you think will be left for eCommerce logistics there after a few years?
  • [23:17] I think the next five years we’ll see the mega marketplaces move at varying speeds into in house logistics. But in this environment, I don’t think they’re going to be able to pursue it with the same vigor.
  • [24:09] Could you share some interesting stories about the growth of some companies in your portfolio, as well as perhaps some interesting case studies about how they are managing the current situation?
  • [25:27] GudangAda is kind of a fascinating combination of an entrepreneur and his businesses that have served wholesalers for many years applying a frontend of technology to make the wholesaler to wholesaler, and the wholesaler to retailer relationship evermore efficient and less operationally intensive.
  • [27:35] One of the very fastest-growing startups across the entire of Indonesia happens to be a grab and go coffee chain called Kopi Kenangan.
  • [29:21] As a VC firm, what do you look for in a pitch deck? And what is the most important trait that you think founders should have?
  • [29:55] The individuals behind the company are arguably the most important considerations we look at and what ends up being a longer diligence period at Alpha JWC than some of our peers
  • [31:35] What separates the excellent ones from the otherwise, promising ones is interpersonal skills and leadership, and some of the softer skills that lead someone in the junior ranks to want to come in and work every day.
  • [32:22] Could you share some tips and advice for management during a crisis and what is the most important aspect to date where everything is so uncertain?
  • [35:49] What about some of the don’ts during a crisis? What shouldn’t the founders or the leadership of the companies be doing right now? 
  • [37:04] I understand that you also run a podcast, Indo Tekno, that is specifically about Indonesia’s eCommerce space? So could you tell us a little bit about it?
  • [37:24] Indo Tekno, was really my passion project which emerged from being in solitary confinement. It’s been my mission to try to close the gap and raise the profile of Indonesia to the external investment world.

Related Episodes:

Supply Chain Digitization with John Urban Co-Founder of GT Nexus

Unlimited Scenarios with Richard Lord VP APAC of Kinaxis

Opportunities within a Crisis with Hari Vijayarajan GCCO at ONE Championship 

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