acommerce 3rd sea retail summit - how technology is reshaping the way luxury and fashion industry

aCommerce

How Technology is Reshaping the Way the Luxury and Fashion Industry Produces, Sells, and OperatesJakarta, 21 October 2015

Full Service Ecommerce Solutions Provider in ASEAN

Table of Contents01 About Me 3

02 aCommerce Overview 4-6

03 How Technology is Reshaping the Way the Luxury and Fashion Industry Produces, Sells, and Operates

7-37

04 Contact 38

About Me

Note: 1. ASEAN countries used to calculate fixed and wireless broadband penetration include the key countries which aCommerce operates in; 2. Smart phone penetration rate excludes Singapore

Hadi Kuncoro

CAREER

• aCommerce Indonesia – Chief Operating Officer

• Rocket Indonesia GmbH – Vice President

• Zalora Indonesia – Operations Director

• Oriflame Indonesia – Operations Director

• Beiesdorf - Commercial Support & Operations Senior Manager (Downstream

Supply Chain Management)

ASSOCIATIONS

• Deputy Chief of Indonesian Logistics Association

• Member of idEA (Indonesian Ecommerce Association)

EDUCATION

• Bachelor Degree in Economics, Sebelas Maret University

• Certified Supply Chain & Logistics Professional (CSLP)

General Overview

Share of ASEAN Outsourced Market (Top 5)

FOUNDED IN

2013 15% monthly growth522% yearly growth

ACTIVE CLIENTS

139 66 Brands 59 Retailers 12 Marketplaces2 Resellers

STAFF

>600 at July 2015, Including c. 80 tech staff

aCommerce: Fast growth & winning market share

Thailand Indonesia Philippines

OPERATES IN THE KEY MARKETS OF:

aCommerce50%

Singpost38%

Anchanto5%

Paraplou5%

Arvato2%

Our Products and Services

Cross Border ‘International’ EcommerceFrom customs clearance to local FDA approval, channel management and cross-border logistics, we can scale your Ecommerce business across S.E. Asia and rest of world

E-Fulfillment & DeliveryOur specialized E-fulfillment centers can manage all your local Ecommerce logistics needs from Managed Drop-Ship, Flash Logistics and temp controlled storage to custom packaging, next day delivery, and CODAdditional services include: Production, Call Center.

Technology DevelopmentWe design, develop, and operate Brand/Retailer storefront in marketplace(s) connected to our centralized inventory/fulfillment platform

Performance Marketing We conduct funnel analysis and optimize your e-commerce website; manage media buying in Facebook, Google, local Ad networks, develop ad banner & copy, monitor regularly and optimize for conversion (transaction, revenue)

Our Partners and Clients

They are:• SMEs, Startup as well as Big Companies• Local, regional, international brands• Fashion, F&B, Electronics, Lifestyle, Services

categories and many more

01 How Technology is Reshaping the Way the Luxury and Fashion Industry Produces,

Sells, and Operates

UBS Research, 13 June 2014• ASEAN B2C e-commerce market 2014: USD 500m to USD 1bn• Expected to reach USD49 billion by 2020 (8% of retail sales from 0.1–0.2%)

ASEAN macroeconomic and industry landscape ASEAN ecommerce market potential Notwithstanding wide ranging ASEAN ecommerce market size currently, research analysts and consultants are in agreement that ASEAN e-commerce market is poised for rapid expansion

Macquarie Research, 27 March 2015• ID online retail 2014: USD1.7 billion• Expected to reach to USD12 billion by 2018

Lazada, June 2015• ASEAN e-commerce market size 2014: USD3 billion

Euromonitor, 2015• ASEAN online retail 2014: USD4.4 billion• Expected to reach USD11 billion in 2018

AT Kearney, 2015• ASEAN e-commerce market 2013: USD7 billion• Opportunity to grow to USD89 billion

CLSA, 31 August 2015• Indonesia, Thailand, Malaysia, Philippines B2C & C2C market 2015: USD11.1 billion• Expected to reach USD30 billion in 2019

Increasing wireless broadband penetration…

...and fixed broadband penetration

Coupled with rising affluence across ASEAN...

CAGR 14-19

MY: 10%

TH: 16%

PH: 16%

ID: 39%

VN: 10%CAGR 14-19

PH: 7%ID: 11%

TH: 7%

MY: 7%

SG: 4%

Sing

apor

e

Mal

aysi

a

Viet

nam

Thai

land

Indo

nesi

a

Phili

ppin

es

182%

50%36% 33%

22%7%

192%

64% 70%82%

47%

10%

2014 2018E Sing

apor

e

Mal

aysi

a

Viet

nam

Thai

land

Phili

ppin

es

Indo

nesi

a

101%

34%27%

23%

8% 6%

101%

36% 39%

30%

13% 10%

2014 2018E

Note: 1. Decrease in nominal GDP per capita is due solely to forecasted depreciation of ASEAN currencies against USD; Source: MPA 2015, Global Insights, Euromonitor

Wireless broadband penetration rate (%) Fixed broadband penetration rate (%) Nominal GDP per capita (USD’000)1

Internet retail sales value (USD billion)

...will drive substantial growth in ASEAN e-commerce market

ASEAN macroeconomic and industry landscape ASEAN e-commerce market potential (cont’d)Increasing internet accessibility and rising economic well-being, amongst others are expected to drive significant growth in ASEAN e-commerce market

2014 2015 2016 2017 2018 20190

5,00010,00015,00020,00025,00030,000

Indonesia Thailand Malaysia Philippines

2014 2015E 2016E 2017E 2018E 2019E50,00055,00060,00065,00070,00075,00080,00085,00090,00095,000

100,000

Singapore Malaysia Thailand Indonesia Philippines

Norm

inal

GDP

(USD

'000

)

Philippines

Malaysia

Thailand

Indonesia

0 5 10 15 20 25 30 352014A (CLSA) 2019E (CLSA) Series3 Theoretical Potential (A.T. Kearney)

ASEAN macroeconomic and industry landscape ASEAN ecommerce market potential (cont’d)A.T. Kearney forecasts a theoretical ecommerce market size of USD67 – 89 billion for ASEAN in the future, with Thailand and Indonesia, being aCommerce’s key markets, taking the largest stake

E-commerce market size1 (USD billion)

Note: 1. Excluding B2B e-Commerce market size; 2. ASEAN’s theoretical e-commerce potential includes Vietnam (USD5bn to USD7bn) and Singapore (USD7bn – USD10bn); Source: CLSA, A.T. Kearney

8 - 12

12 - 15

25 - 30

10 - 15

And the growth can be seen in every sector

Source: Online Retailers in Emerging Asia to 2015, ICD Research

Asia Online Product Sales in 2014

2014 2015 2016 2017 2018

889 872961

1,0901,248

0 - 1426%

15 - 2925%

30 - 4929%

50 -7518%

75+2%

CAGR of 8.9%

Vietnam Indonesia Philippines Thailand Singapore Malaysia

8.9%

7.7%

6.5%

3.8%2.9% 2.8%

Forecast of key economic indicators Nominal GDP growth forecast (USDbn)

Nominal GDP per capita CAGR 2014 – 2018E Breakdown of population by age, 2015

2014 2015 2016 2017 2018

Real GDP growth 5.0% 4.9% 5.0% 5.3% 5.5%

Nominal GDP (USDbn) 889 872 961 1,090 1,248

Nominal GDP per capita (USD) 3,515 3,412 3,717 4,169 4,727

Nominal GDP per capita growth - -2.9% 8.9% 12.2% 13.4%

CPI inflation 6.4% 6.4% 4.1% 4.4% 5.0%

Population (m) 252.8 255.7 258.6 261.3 264.1

Population growth - 1.1% 1.1% 1.1% 1.0%

Strong macroeconomic fundamentals & attractive demographics – Indonesia

Source: Global Insights, United States Census Bureau, National statistics databases, Broker Reports

Indonesia MarketIndustry and macro highlights

HUGEHow do we grab this potential channel?

Route to Market Model (Offline vs Online)

Multi types of retailer classification : Modern Channel, General Trade, institution, Wholeseller, store, star outlet

Multi types of online retailer classification: market Place, B2B, B2C daily deals

Why Fashion or Luxurious Brands?

Social perspective

Communication perspective

• Stratification within social life • Fashion trend vs Fashion victim• Used as Self identity• Used as personality communication• Female population in Indonesia is bigger

then male in regards to online shopping behaviour

• Middle class economy population is growing fast

Market Opportunities

FASHION = LIFESTYLE

IS A

UNIVERSAL NEED

Why Online?

FASHION = LIFESTYLE

IS A

UNIVERSAL NEED

Customer Behavior Perspective

Decision to purchase: ANYTIME

ANYWHERE

How do online stores manage the brand?

Best-in-class Value Added Services

Upstream Value

Downstream Value

How do online stores manage the brand?

Store Management Capabilities

Deep technological integration with online channels and 3PL providers:• Inventory is allocated between online channels• Sales Orders are transferred live to Fulfilment center for fast fulfilment• Customers are notified about incoming delivery

Own web storeFlash Sales channelsMarketplaces Stores

Consumers Consumers Consumers

Popshop Solution – Online Sales CampaignsLaunch on any mediaSales Campaign Type

New Release(Launch New Product)

Hot Deal(Discount or Overstock)

Samples(Sign-Up Members)

Pre-Orders(Sign-Ups & PreSales)

Branded Promos(Company Swag)

Social Networks(Facebook, Twitter)

Mobile Apps(Chat, Apps, Games)

Portal & Mobile Apps(Sanook & WeChat)

Email Newsletters(Internal or 3rd Party)

Brand Website (Corporate Sites)

BRAND

aCommerce’s PopShop solution uses a customizable mini webstore allowing to launch online sales campaigns on any media. A fast, low cost and effective way to monetize your online assets.

2% Indonesia

Channel Management SolutionSolution for the brands and distributors to sell in marketplaces. We provide marketplaces with sourcing, merchant management, cross-border and fulfillment.

Merchandising

Fulfillment

Production

Customer Service

Marketing

$

Reporting

Delivery & COD

Marketplaces & E-tailers

Brands & Distributors

Multi-Channel Management

Marketplace Solutions

Cross Border

Marketplaces Market Share 2014

2% Indonesia

Source: Nusa Research

Easier Stock Allocation

Client Warehouse

We set-up online store to sync inventory and process orders similar to a physical retail store. Our specialized fulfillment centers and technology makes it simple to process ecommerce orders.

Retail Store

aCommerce (B2C)Fulfillment Center

Own Website

Customer24 hr. access via

PC or mobile

SIMC

Single Inventory database to handle all transaction from multiple Channel

Multiple Channels

“Why only use one channel? By using multiple channels you can increase your product visibility and touch points.”

Multiple Channels Sales

Multi Channel Problem (1) - Managing multiple systems

Multi Channel Problem (2)

Inventory Allocation Price and promotion

management

Multichannel Sales Order

ProductManagement

Store Management Capabilities

2% Indonesia

Online Merchandising & Onsite marketing:• Define online merchandising strategy by channel

(assortment, pricing, promotion)• Define and manage inventory needs• Manage promotions in coordination with online

channel to convert visitors into buyers• Manage promotion mechanisms such as bundle sets

or vouchers• Work with marketplace on Onsite Marketing (visuals,

USPs communication)

Day-to-day Store Operations• Create Products in store back-end • Upload product content (description and pictures)• Categorize products• Manage pricing• Create and manage bundle sets• Coordinate with E-commerce warehouse on Supply

Chain and Inventory Management• Coordinate with Customer Service and Marketplaces

on customer inquiries

Challenges in Channel Management

2% Indonesia

Product• Adding products to multiple channel easily

and effectively• Creating and uploading one content to be

synced across channel for branding or• Determine which content (image and

description) should go to which marketplace

Price• Defining pricing complexity among online

and offline• Managing price from a single platform• Differentiating pricing strategy between

different marketplaces• Must automatically update price for

promotion period

Orders• Managing orders coming from

different channels from a single platform

• Updating order status to inform customer the fulfilment progress

Administration• Managing administration such as

company information from one platform

• Filling up the on-boarding forms and signing up to multiple marketplaces at the same time

Stock• Managing stock seamlessly from one platform

• Multi storage location • Automatically adjusting inventory

across all marketplaces once an order is received

• Maximizing stock availability by using our advance stock algorithm

Reports• Getting insights & sales performance

from our store for a better decision making process

• Forecasting our inventory planning based on our historical sales data

• Market insights on which channel is best for our productLogistics

• Crossborder – Custom Regulation within countries

• Connect with multiple 3rd party logistics providers to fulfill our orders

• Multi type of fullfilment: Crossdocking, fastfulfill, Dropship

Case Study (ID) – Hush Puppies

3 Channels

Live on September

> 500 SKU

HUSH PUPPIES

> 200 Orders in 1 month

Free amplification on All channels 99% delivery

success rate

Cost ratio 10%

Case Study (ID) – MatahariMall.com

Soft launch: June 2015 Grand launch: Sept 2015

in 3 months

Nearly 200,000 customers 200,000 products from its 1,200 vendors 10,000 sqm warehouse in Halim

O2O (Online-to-Offline) ServiceLeveraging its huge retail network and chains. Customers can order online and pick-up at their offline stores (Matahari Dept Store & Hypermart), which is also affiliated to Lippo Group.

Source: http://jakartaglobe.beritasatu.com/business/mataharimall-introduces-cash-less-transactions/http://jakartaglobe.beritasatu.com/business/mataharimall-sets-sights-high-booming-e-commerce-scene/

http://jakartaglobe.beritasatu.com/business/mataharimall-introduces-cash-less-transactions/

http://jakartaglobe.beritasatu.com/business/mataharimall-sets-sights-high-booming-e-commerce-scene/

Case Study (ID) - Bobobobo

>1000 brands in seven category

20% monthly sales growth rate less than two years

Visitors increase to 600% in April’15 from January’15

Targeting Millennials audiences (18 to 35 years old)

Source: https://www.techinasia.com/indonesia-bobobobo-emtek-funding-news/

an upscale lifestyle ecommerce site that sells luxury products from boutique brands in the categories of men, women, living, dining, travel, and events.

https://www.techinasia.com/indonesia-bobobobo-emtek-funding-news/



The Online Channel Success Story.....

3

No CAPEX or Much Lower Investment compare to opening an offline store

Much better market penetration to:-untapped market-new brands

-luxury brands-niche brands

Often becomes the fastest growing channel available

Easiness in building a brand awareness through media channels integration

Thailand 946 Dusit Thani Building, 4th fl., Rama IV Rd. Bangrak, Bangkok, Thailand 10500

IndonesiaPT Acommerce Solusi Lestari, Sahid Sudirman Center lantai 17 A Jl Jend Sudirman no 86 Jakarta Pusat 10220

Singapore 74B Duxton Road Singapore 089533

PhilippinesBldg 1A Rey Marketing Compound C. Raymundo Ave, Pasig, 1609 Metro Manila, Philippines

Email: [email protected]: +62818608974Skype: hadikuncoro

Address: Sahid Sudirman Center 17A fl.Jakarta 10220

ContactThank you

Hadi KuncoroCOO

mailto:[email protected]