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Ant Financial, the financial services-focused affiliate of Alibaba, is making a play for digital payment users in Indonesia through still-popular messaging service BlackBerry Messenger (BBM). The company announced a partnership with Elang Mahkota Teknologi (Emtek Group), the local media conglomerate that gained control of BBM’s Indonesia operations in a licensing deal brokered with Canada-headquartered BlackBerry in 2016.
The agreement is supposed to yield a mobile payments service that users will access through BBM, which is still hanging on as a force in the messaging sector in Indonesia with more than 63 million monthly active users (MAUs). A survey of mobile internet users conducted by JakPat in January 2017 found that 83.1% still used BBM, with more than one-third (35.9%) of BBM users checking the app more than 10 times a day.
Ant Financial plans to bring its vast experience operating popular digital payments service Alipay—which has some 450 million users—to bear in Indonesia, a market with a growing number of smartphone users. eMarketer estimates there will be 67.1 million smartphone users in the country in 2017, with the figure growing to 92.1 million by 2020.
Ant Financial has grown the portfolio of services it offers Alipay users to include wealth management tools, food ordering, bill payment and travel reservations. It is likely to reproduce similar offerings on BBM.
However, Emtek Group has already attempted to expand BBM’s suite of services beyond just messaging—with mixed results. In December 2016 the company partnered with local ecommerce platform Bukalapak.com to launch an ecommerce service called BBM Shopping, but research shows the platform has not yet gained much traction among users.
Emtek Group and Ant Financial will also face challenges from a somewhat unlikely source: ride-hailing apps operating in Indonesia. Two such players, homegrown Go-Jek and Singapore-based Grab, have both made aggressive moves to shift their users from simply calling taxis into a broader array of technology services, such as digital payments. Go-Jek now offers its users the digital payments company Kudo earlier this month.
The Indonesia partnership is just the latest element of Ant Financial’s aggressive expansion plan outside of China, where it faces tough competition from Tencent’s WeChat Pay. Ant Financial purchased stakes in digital payment companies payments processor Moneygram in January.
Shifts in how retailers and consumer packaged goods (CPG) brands think about ecommerce, combined with an accelerating acceptance among consumers for buying food digitally, have boosted online sales of groceries. Retailers and brands are taking note of these changing consumer behaviors and offering more digital options for grocery shopping and delivery, which will continue to drive the trend upward in 2017 and beyond.
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