Microsoft has taken a “strategic stake” in Indonesian e-tailer Bukalapak and will run the service in its Azure cloud.
Microsoft has not disclosed the value of its stake.
The deal has enormous potential for Microsoft beyond Azure, because Bukalapak offers it a route to over 70 million consumers through myriad small retailers.
Bukalapak does so because one of its main businesses is acting as a distributor to convenience stores, known as “Warung” in Indonesia. Bukalapak reportedly has relationships with almost two million Warung, who use the service to order the goods they sell in the real world. Bukalapak uses the resulting scale to offer products at prices that undercut other suppliers vying for Warungs’ business.
Unsurprisingly, Warung are therefore quite keen on Bukalapak.
In 2018 Bukalapak added virtual products such as mobile phone credit to its offering and offered Warungs a cut of such transactions.
And now Microsoft has a stake in Bukalapak and a potential new way to hook its many subscription offerings, or Skype and Xbox, into the 15th-largest economy in the world. Indonesia is also the world’s fourth-most-populous country and was growing fast before the COVID-19 pandemic.
Microsoft is now in a fine position to get its slice of that growth, although its lack of a substantial presence on mobile platforms is a weakness.
The deal resembles recent investments by Facebook, Google, and other Western concerns in India’s Jio Platforms, which also aimed to give big tech access to fast-growing Asian markets and their increasing ardour for e-commerce.
Perhaps most importantly, Microsoft teamed with Bukalapak before a Chinese cloud – most of which are keen on expansion into the region – was able to strike a deal . Although Bukalapak does already sell Alibaba Cloud t-shirts. ®