acommerce asia cross border shanghai 2015

Southeast Asia –The Next E-Commerce Gold Rush?Sheji Ho, Group CMO | April 2015

The Leading End-to-End E-commerce Solutions provider in S.E. Asia

FOUNDED IN

2013With over 400 staff across Singapore,

Thailand, Indonesia, and Philippines

REVENUE

3xTripled revs in

second half of 2014

CLIENTS

100+30% are in Fortune top 1,000, 70% are recurring with 1-2 year agreements

MARKET GROWTH

30%Year-on-Year growth

for B2C and B2B Ecommerce market

in S.E. Asia

Singapore | Thailand | Indonesia | Philippines

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Our E-Commerce Solutions

E-commerce Strategy & Consulting

Web & Mobile Development

Production, Photography, Copy Writing

Digital Marketing, CRM, and

Data

Channel Management on E-tailers & Marketplaces

Payment Gateways

We focus on sales by providing turn-key solutions that drive a customers’ path to purchase

With our own fulfillment centers, delivery fleet, and proprietary technology we manage the entire E-commerce logistics supply chain

Demand Fulfillment

Demand Generation


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Clients

Consumer Goods

Marketplaces & E-tailers

Fashion & Apparel

Electronics & Telecom

Channel Management, Web Dev, Fulfillment & Delivery

End-to-EndFull Service Marketing Only


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Our Team

Paul SrivorakulGroup CEOExperience:CEO & Co-FounderEnsogo Group (acquired by LivingSocial), Admax, DMS Group, NewMedia

Peter KopitzGroup COOExperience: Co-Founder & MD- Zalora, Rocket InternetVP, Head of Execution- ACL Bank

Piers BennettGroup CFOExperience:CFO - Ensogo (acquired by

LivingSocial)- DMS Group- ValueCommerce

Tom Srivorakul CEO (Thailand)Experience:Co-Founder & MD- Ensogo(acquired by

LivingSocial), DMS Group, NewMedia

Adrian SuhermanCo-CEO (Indonesia) Experience:VP of Digital - TelekomselCEO (Indonesia)LivingSocial/DealKeren

Hadi WenasCo-CEO (Indonesia) Experience:Co-Founder & MD- Zalora, Rocket

InternetEngagement Manager- McKinsey & Co

Ray AlimurungCEO (Philippines)Experience:VP of Business Dev.- Lazada, Rocket Int.Sr. Product Manager- Amazon.com (USA)

Sheji Ho Group CMOExperience:Sr. Product Manager- Moda OperandiHead of Customer Acq.- LivingSocial, Gilt

Groupe

Dr. Graeme OldhamGroup CPOExperience:Head of Product Management, Real-Time Content & Analytics - Thomson Reuters

Sabina ChangCEO (Singapore)Experience:Category Manager & Head Merchandiser- Apple, Amazon,

Walmart.com


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Our History

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

March 2013Incubated aCommerceunder Ardent Labs with 1M USD in Capital

Q1 2013

June 2013Official launch aCommerce an End-to-end Ecommerce solutions provider

November 2013Launched Indonesia with CEO Hadi Wenas

September 2013Signed up first clients Central, L’Oreal, and LINE in Thailand

November 2013Raised $3.1M Bridge loan from NTT Docomo, Siemer Ventures, JL Capital and CyberAgent

June 2014Closes $10.7M Series A Round from Inspire Ventures, Sumitomo Ventures, SinarMas

December 2014Signed Groupon and MAP, largest retailer in Indonesia

April 2014Launched Philippines with Ray Alimurung

February 2014Launched Singapore with CEO Sabina Chang

October 2014Signed Ensogo and SSI, 3rd

largest retailer in Philippines

July 2014Signed HP Reg. in Singapore

September 2014Signed LazadaThailand with 2K orders per day

November 2014Launch Channel Management on Lazada, Rakuten, Elevenia, Qoo10

Dec 2014End the year with highest revenue month

April 2013Partnered with Netsuite and Magento for Technology suite


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Our Presence Across Southeast Asia

Thailand

Singapore

Philippines

• 3,700 sqm Fulfilment Center• 160 staffs

• Sales Office• 3 staff

• 500 sqm Fulfillment Center• 30 staffs

Vietnam, Malaysia

Launching soon…

$11.7M USD in funding from NTT Docomo, Sumitomo Ventures, CyberAgent Ventures, Inspire Ventures, Sinarmas, AsiaPacificDigital, Ideosource, and Ardent Capital

• 1,500 sqm Fulfillment Center #1 • 2,000 sqm Fulfillment Center #2 • 8,000 sqm Fulfillment Center #3• 160 staffs

Indonesia


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Thailand Fulfillment Center: 3,700 sqm


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Indonesia – 3 Fulfillment Centers: 11,500 sqm

Signed Matahari Group (Largest Retailer in Indonesia) for End-to-End Ecomerce in a 8,000 sqm warehouse


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Philippines Fulfillment Center: 500 sqm


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In The Media


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Similar Models

China: Baozun US: eBay Enterprise (previously GSI Commerce)

Southeast Asia –

The Next E-Commerce Gold Rush?


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The next e-commerce Gold Rush

Source: A.T. Kearney


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SEA e-commerce has seen spectacular growth

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

$2.0B

$2.7B

$3.9B

$4.8B $5.1B

$7.6B

$9.9B

$13.1B

2005 2006 2007 2008 2009 2010 2011 2012

Online Retail Sales Value in Indonesia, Malaysia, Philippines, Thailand (US$ Billion)


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We’ve only scratched the surface –In 5 SEA countries, e-commerce is <1% of total retail



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We’ve only scratched the surface –25% CAGR, equal to China


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Reading tea leaves –Why SEA is only 4-5 years behind China


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Similar eco-systems –China and SEA never went through Web 1.0/1.5

• Lack of quality, open long-tail publisher inventory

• Hence, nascent online advertising eco-system

• Hence, non-advertising monetization such as VAS, e-commerce

• Hence, accelerated growth of e-commerce


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Like China in ‘08, B2C market still fragmented –1-2 key players to emerge within the next 5 years

Dangdang, 16.2%

Amazon/Joyo, 15.4%

360buy, 15.0%

m18, 10.8%

139shop, 8.8%

Redbaby, 4.6%

99read, 3.8%

PPG, 2.7%

Menglu, 2.5%

7cv, 0.8%

MainOne, 0.5% Others, 18.9%

2008Q1

Tmall, 50.6%

JD.com, 23.3%

VIP.com, 3.0%

Yixun.com, 2.6%

Amazon, 2.1%

Suning.com, 2.0%

Dangdang, 2.0%

Yhd.com, 1.9%

Gome, 1.7%

Vancl, 0.5%

Others, 10.4%

2014Q1

Source: iResearch


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Like China in ‘08, B2C market still fragmented –1-2 key players to emerge within the next 5 years

Dangdang, 16.2%

Amazon/Joyo, 15.4%

360buy, 15.0%

m18, 10.8%

139shop, 8.8%

Redbaby, 4.6%

99read, 3.8%

PPG, 2.7%

Menglu, 2.5%

7cv, 0.8%

MainOne, 0.5% Others, 18.9%

2008Q1

Source: iResearch

JD.com, 51.9%

Suning.com, 10.6%

VIP.com, 7.7%

Gome.com.cn, 6.6%

Yhd.com, 4.2%

Dangdang, 4.0%

Amazon, 3.5%

Yixun.com, 2.4%

Jumei.com, 2.2%

Others, 6.9%

2014Q3


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Today: SEA e-commerce market highly fragmented


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Like China, SEA market will mature from C2C to B2C over next 5 years

92.1% 92.2%

86.3%

74.7%

70.3%

64.9%

59.2%

54.3%50.6%

7.9% 7.8%

13.7%

25.3%

29.7%

35.1%

40.8%

45.7%49.4%

2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e

% C2C vs. B2C e-commerce transaction volume in China

C2C B2C

Source: iResearch


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Déjà vu?

2014: SoftBank invests $100m in Tokopedia, Indonesia’s largest marketplace

2000: SoftBank invests $20m in Alibaba for 34.4%, worth $87b today

Secrets to striking it rich in SEA – understanding the differences


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Silk Road 2.0 or Barbarians at the Gate?


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C2C will not be dominatedby one key player like Taobao in China

Source: iResearch, Euromonitor


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Instagram and Facebook are major marketplaces in SEA


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Mobile e-commerce adoptionwill be faster in SEA than in China

Source: http://googleasiapacific.blogspot.com/2014/10/asias-mobile-first-world.html

Lazada Group traffic by device

http://googleasiapacific.blogspot.com/2014/10/asias-mobile-first-world.html


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Line (#1 Chat App in Southeast Asia)

Fulfilment, logistics & cash-on-delivery powered by aCommerce

Line users in Asia


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Shopbop x Line x aCommerceMarketing & cross-border mobile commerce


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Line Groceries

Fulfilment, logistics & cash-on-delivery powered by aCommerce


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Line Groceries

Fulfilment, logistics & cash-on-delivery


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Line Flash Sale

Instant access to 6m users


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Line Flash Sale

Increase brand awareness + sales


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Line Flash Sale

User-friendly, mobile shopping experience


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Open vs. “closed” system


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“Open” SEA will lead to hyper-competition

“It could be a bloodbath” – Paul Srivorakul, Group CEO aCommerce


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COD will remain necessary to win in SEA

2008:70% of B2C transactions paid via COD

2014:

2014:

81.7%

8.4% 8.2%1.2% 0.4% 0.0%

COD Credit Card/ Debit

Card

BankTransfer

Paypal Others OTC

2020:??? (local version of Alipay?)


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AEC will accelerate cross-border e-commerce in SEA but multi-country differences will still pose challenges for entrants

Going to market with a local partner


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6 P’s of Cross-Border E-Commerce Success

Processes

Platform

Product

People

Politics

Promotion


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Overcoming challenges by joining forces with a local or regional partner

6P’s of cross-border e-commercesuccess

Common SEA challenges How aCommerce can help

Processes Complicated and unique customs clearance, payment, reverse logistics processes

Local operations in all major SEA countries; platform supporting all local payment methods

Platform Fragmented marketplace eco-system; local payment gateways

Single platform that APIs into all major marketplaces in SEA

Product Lack of knowledge of best selling products

Experience selling products across different categories; access to local data

People Lack of e-commerce and technical talent

Instant access to 400+ local and battle-tested e-commerce professionals

Politics Complicated and frustrating local bureaucracy

Local operations and connectionsto operate business as usual

Promotion Lack of local marketing knowledge Local marketing and customer service staff


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China->SEA Cross-Border Case StudyPhicomm: Channel Management in SEA

• Store set up and operations on Lazada

• Product import and customs clearance

• Content localization

• Local marketing


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US->SEA Cross-Border Case StudyShopbop: Cross-Border Campaign with Line

• Shopbop/Amazon shipping to aCommerce hub in Hong Kong

• aCommerce customs clearance and last-mile fulfilment

• Cash-back to Line users

Key takeaways


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Key takeaways

1. SEA is the next e-commerce Gold Rush (too late to win in China or India)• 4-5 years behind China• BUT mobile e-commerce only 2-3 years behind

2. China e-commerce game plan will work in SEA, but adapt to local differences• Fragmented marketplace eco-system• “Open” borders -> more cut-throat than in China• COD dominant payment method until “local Alipay”• Homogeneous market (China) vs. heterogeneous market

(SEA), despite AEC

3. Work with strong local partner


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Thailand Office946 Dusit Thani Building, 4th fl., Rama IV Rd. Bangrak, Bangkok, Thailand 10500

Indonesia OfficeJalan Wijaya Timur II No. 13RT 015 RW 002, Kelurahan Petogogan, Kecamatan Mampang Prapatan Jakarta

Thailand Distribution Center951/1 Soi Preeyanon, Sathupradit Road, Bangpongpang, Yannawa Bangkok 10120, Thailand

Singapore Office#05-01, Block 71 Ayer Rajah CrescentSingapore 139951


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Thank You!

Sheji HoGroup CMO, aCommerce

E: [email protected]: +66 (0)92-265-1700Skype: sheji_ho

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