acommerce marketing solutions - betagro case study

aCommerce

aCommerce Solutions for Betagro | September 2016

Full Service E-commerce Solutions Provider in ASEAN

1 Market Overview & Trends

The Procession of the Trojan Horse in Troy by Domenico Tiepolo (1773)

“PayPal is a classic example. The

first high-growth segment was power

buyers and power sellers on eBay.

These people bought and sold a ton

of stuff. The high velocity of money

going through the system was linked

to the virality of customer growth.

By the time people understood how

and why PayPal took off on eBay, it

was too late for them to catch up.”

Source: http://blakemasters.com/post/22405055017/peter-thiels-cs183-startup-class-9-notes-essay

Ant FinanceAlibaba’s Trojan Horse

• 2nd most valuable non-public tech

company at $60B valuation (#1 being

Uber at $62.5B)

• Alipay: 82% of China payments market

share

• 120m transactions per day (vs. 170m

through traditional banking system)

• Yu’e Bao: biggest mutual fund in China in

terms of investors with $108B USD; No

minimum deposits, withdraw cash

anytime

• Zhaocai Bao: P2P lending platform with

$32B in transactions in first year

• Small business lending services

• Sesame Credit: credit-scoring related

services based on ecommerce data

Source: http://knowledge.ckgsb.edu.cn/2015/08/05/finance-and-investment/can-alibabas-ant-financial-disrupt-chinas-financial-industry

"Ant Financial's goal is to build a new and truly

inclusive financial system on the internet that better

serves small businesses and the public“

-- Jing Xiandong, CEO Ant Financial

Ant FinanceAlibaba’s Trojan Horse

The Dis-Intermediation of Everything10-year returns for major retailers in US

Source: Yahoo Finance

+2,262% -13% -35% +121%+64% 0%

The Dis-Intermediation of EverythingAmazon’s Trojan Horse

Source: https://stratechery.com/2016/walmart-and-the-multichannel-trap

“Amazon, meanwhile, is transitioning to a new model

completely. The vast majority of Amazon’s products are

increasingly sold with little to no margin at all: profitability

comes from fees paid by third-party merchants and Prime

subscriptions. It is a model that is completely dependent on

scale, and the lower the margin and thus prices, the higher

Amazon’s volume, which means ever more leverage from

Amazon’s massive fixed costs in infrastructure and logistics.”

The Dis-Intermediation of EverythingDis-intermediation not just happening in retail ecommerce

TeslaCars$32B

UBERTransportation

$51B

XiaomiConsumer Electronics

$46B

AirBnBAccommodation

$26B

Ant FinanceFinance & Banking

$60B

ZhonganInsurance

$8B

Dollar Shave ClubConsumer Goods

$1.0B

The Honest Co.Consumer Goods (incl. diapers)

$1.7B

The Dis-Intermediation of EverythingDollar Shave Club

Source: http://www.nytimes.com/2016/07/27/business/dealbook/1-billion-for-dollar-shave-club-why-every-company-should-worry.html

The Dis-Intermediation of EverythingDollar Shave Club

“Gillette’s model and P&G’s formula generally cost a lot of money: R&D

cost money, TV advertising cost money, and wholesalers and retailers had

to earn a margin as well, and that’s before P&G realized the return on their

investment. The result was that cartridges that cost less than a quarter to

manufacture and package were sold for $4 or more. That worked as long

as P&G’s other advantages in technical superiority, advertising, and

distribution held, but were they ever to falter, it was eminently viable to sell

cartridges for less and still make a healthy margin.”

Source: https://stratechery.com/2016/dollar-shave-club-and-the-disruption-of-everything

The Dis-Intermediation of EverythingDollar Shave Club changing distribution and advertising

“AWS and Amazon itself, having both normalized e-commerce amongst

consumers and incentivized the creation of fulfillment networks, made

the creation of standalone e-commerce companies more viable than

ever before. This meant that Dollar Shave Club, hosted on AWS servers,

could neutralize P&G’s distribution advantage: on the Internet, shelf

space is unlimited. More than that, an e-commerce model meant that

Dollar Shave Club could not only be cheaper but also better: having your

blades shipped to you automatically was a big advantage over going to

the store.

That left advertising, and this is why this video is so seminal: for

basically no money Dollar Shave Club reached 20 million people. Some

number of those people became customers, and through responsive

customer service and an ongoing focus on social media marketing,

Dollar Shave Club created an army of brand ambassadors who did for

free what P&G had to pay billions for on TV: tell people that their razors

were worth buying for a whole lot less money than Gillette was charging.


The Dis-Intermediation of EverythingDollar Shave Club: all about brand, experience and disruption

“Dollar Shave Club has over three million subscribers but only

about 190 employees. Its razors were made in South Korea by

Dorco. Distribution was initially handled in-house but

eventually was contracted to a third-party company in

Kentucky. What remained was a terrific design, marketing

and customer service shop; and a business that was easily

expandable to meet demand and that had a good niche with

men who do not like to shop.”

Source: http://www.nytimes.com/2016/07/27/business/dealbook/1-billion-for-dollar-shave-club-why-every-company-should-worry.html

The Dis-Intermediation of EverythingUnilever’s next acquisition target: Honest Company

Source: http://www.wsj.com/articles/unilever-is-in-talks-to-acquire-jessica-albas-honest-co-1473981465

The Dis-Intermediation of EverythingUnilever’s next acquisition target: Honest Company

Source: https://www.youtube.com/watch?v=HSrGFGJJwzA

The Honest CompanyDis-intermediation & Product Innovation in Consumer Goods

The Honest CompanyDis-intermediation & Product Innovation in Consumer Goods

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Monthly Visits

30.45%

3.83%

17.77%

6.45%

29.22%

11.51%

0.77%

0%

5%

10%

15%

20%

25%

30%

35%

Media Mix

10

50

170

250

0

50

100

150

200

250

300

2012 2013 2014 2015

Revenues

1) Subscription ecommerce service selling eco-friendly, non-toxic family-oriented products such as diapers, skin care and

cleaning products. Best known for its flagship line of baby products including baby wipes and diapers, Honest has

branched into other product categories over time

2) Founded in 2011 by Jessica Alba, Brian Lee (ShoeDazzle), Christopher Gavigan, and Sean Kane

3) Raised $222M so far and valued at $1.7B USD. Backed by General Catalyst Partners, Iconiq Capital, Lightspeed Venture

Partners

4) 80% of sales from online channels

Source: SimilarWeb Pro, Forbes, Privco

124% CAGR

Lazada SG

The Honest CompanyInnovation in Customer Acquisition – Free Trial + Auto-Renewal

The Honest CompanyInnovation in Merchandising – Bundling & Customization

The Honest CompanyHonest Beauty – Expansion into new product categories

“I suspect this sort of disruption will not be a one-off: the Internet (and e-commerce) has so profoundly

changed the economics of business that it is only a matter of time before other product categories are impacted, with all the second order effects that entails.”


Subscription Commerce Case StudyNescafe Red Cup by aCommerce

2 Betagro Digital Transformation Strategy

Betagro Digital Transformation StrategyFood Manufacturers already moving online in mature markets

Yurun Group Ltd is the second-largest

meat supplier in China. It is

headquartered in Nanjing, Jiangsu. It

operates in two sectors, chilled and

frozen meat, and processed meat

products, which are marketed under

the brand names of Yurun, Furun,

Wangrun, and Popular Meat Packing.

Source: http://www.chinadaily.com.cn/bizchina/2014-09/19/content_18625695.htm


Digital coupons

Tmall Flagship Store


239 sold this month to date

Betagro Digital Transformation StrategyBetagro Value Chain & Gap Analysis

TechnologyProduct Design

Manufacturing MarketingSales &

DistributionService

Demand Generation Demand Fulfillment

Educate Acquire Activate Engage Convert Monetize

As-Is

• Event marketing

(Roadshow,

University, Mall,

etc.)

• TVC

• OOH / Ambient

Advertising

• Music Videos

• CSR

• Free Sampling

in Supermarket

(booth), Events

• Free Sampling

in Supermarket

(booth), Events

• Betagro.com

• Betagro Society

(YouTube,

Facebook)

• Retail partners

(Tops, Lotus,

Big C,

FamilyMart,

etc.)

• Betagro Shops

• B2B (Horeca)

To-Be

• + Facebook Ads

• + Display Ads

(Vertical, GDN)

• + Influencer

Marketing

• + Google SEO

• + Google Paid

Search

• + Facebook Ads

• + Display Ads

(Vertical, GDN)

• + Influencer

Marketing

• + Google SEO

• + Affiliate

Marketing

• + Betagro.com

(revamped)

• + Betagro Blog

& Commmunity

• + Content

Marketing (e.g.

Tastemade,

Tasty, etc.)

• + Email

Marketing

• + Betagro.com

(revamped)

• + Betagro Blog

& Commmunity

• + Content

Marketing (e.g.

Tastemade,

Tasty, etc.)

• Criteo

• Bluecore

• + Betagro

Ecommerce

Brand.com

• + Marketplaces

(e.g. Lazada,

etc.)

• + On-demand

(HonestBee,

HappyFresh)

• + O2O (Online-

to-Offline)

• + B2B

Ecommerce

Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey

Acquire Activate Engage Convert Monetize

Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : AcquireGoogle SEO

SEO

Onsite

Technical

URL Structure

Page Titles

Meta Description

Site Speed

Content

Product Descriptions

SEO Footers

Cooking Blog (e.g. Tastemade)

Offsite

Backlinks

Advertorials

Social Signals

Content Shared on Facebook

Betagro Digital Transformation Strategy : AcquireGoogle SEO : Cdiscount SEO footers example (by aCommerce)

Betagro Digital Transformation Strategy : AcquireGoogle SEO : The Outlet 24 SEO footers example (by aCommerce)

Betagro Digital Transformation Strategy : AcquireGoogle SEO : Cooking Blog

Betagro Digital Transformation Strategy : AcquireGoogle SEO : Blog / Articles

Content Marketing Case Study: Headlines by ShopSmart.xyz

Headlines Shopping Guide &

Product Review launched

Betagro Digital Transformation Strategy : AcquireGoogle SEO : Blog / Articles

Content Marketing Case Study: Headlines by ShopSmart.xyz

Betagro Digital Transformation Strategy : AcquireGoogle SEO : Advertorials for backlinks – KingPowerOnline example

Betagro Digital Transformation Strategy : AcquireGoogle SEO : Advertorials for backlinks – Nescafe example



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : AcquireSEM : Campaign Structure

Betagro Adwords Account

Brand

Betagro

Betagro Deli

Betagro Shop

Products

Chicken

Wing

Drumstick

Breast

Liver

Egg

…

Pork Processed

Gyoza

Sausage

Popcorn

Spicy BBQ Chicken

…

Pet

Dog’n’Joy

Competitors

CP

CPF

Saha Farms

TGM

Belucky

S&P

…

Recipes

Chicken Breast

Chicken

Healthy

…

Retail

Tesco Lotus

FamilyMart

Big C

7-11

…

Generic Food

Fresh Food

Dairy

Bakery

Beverages

Snacks

Desserts

…

Dynamic Search Ads

Example ad account structure. List not exhaustive

Betagro Digital Transformation Strategy : AcquireSEM : Optimization Roadmap

Pre-Launch

Brandkeywords

Expanded Text Ads (ETA)

Categorykeywords

ConversionOptimizer

Dynamic KeywordInsertions (DKI)

Mobile Bid Adjustment Tools SEM

GenericKeywords

Search TermOptimization

Exact/Phrase/BroadMatch Type

DynamicSearch Ad

(DSA)

Conversion RateOptimization

Enhance ContentRelevancy(via GTM)

Landing Page Checker Error404, Out of stock

Remarketing lists for search ads

(RLSA)

1st month 3rd month Next step

SEMCompetitorKeywords

Ad CustomizerLocation, Price, Promotion

New Beta Features

AdWords Script

Betagro Digital Transformation Strategy : AcquireSEM : Utilize Ad Extensions to Increase CTR

Sitelink ExtensionStructured Snippet

Callout ExtensionPhone Extension

Cost per click of ads with high CTR is

normally lower than that of ads with low CTR

Betagro Digital Transformation Strategy : AcquireSEM : aCommerce is a Google Ecommerce Premier Partner



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : AcquireFacebook : Campaign Structure

Betagro Facebook Account

Acquisition

Always On(e.g. free shipping, e-coupon

400 THB)

Competitors Fanpage

(e.g. CP Brand, CP Food)

Betagro Society Fanpage

Interest Targeting(e.g. Health, Parenting,

Cooking)

Promotion(e.g. Mother’s Day, Flash

Sale)

Competitors Fanpage

(e.g. CP Brand, CP Food)

Betagro Socienty Fanpage

Interest Targeting(e.g. Health, Parenting,

Cooking)

Retargeting

Non-Purchasers

Website Visitors(exclude purchaser)

Email Subscribers(exclude purchaser)

Offline CRM Database

Up-sell/Cross-sell

Website Visitors who visit product

page(s)

Website Visitors who add to cart

Previous Purchasers

Betagro Digital Transformation Strategy : AcquireFacebook Video Ads can get massive reach in little time

Facebook already surpassed YouTube as most powerful video marketing channel

Betagro Digital Transformation Strategy : AcquireFood Businesses in Thailand leveraging Facebook Video Ads

Betagro Digital Transformation Strategy : AcquireFood Businesses in Thailand leveraging Facebook Video Ads

• 4.8M Views

• 234K Likes

• 50K Shares

Betagro Digital Transformation Strategy : AcquireFacebook : Ad Mockup Example



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : Acquire & ActivateOffer free samples for users who register on Betagro website

• Build online database for email marketing (educational emails, drive traffic to store)

• Sign up and get free sample product shipped to user

• Leverage users who got samples to write product reviews / social proof, displayed on Betagro site

• Activate member base for special events – pop up shop, etc.

8,000 New

Subscribers

2,000Store visits &

Sets of samples redeemed

10Online orders

(More orders offline too!)

Kiehl’s Thailand tapped into 5 million Line users to 1) build their member database and 2) drive offline foot traffic and orders by offering users who signed up free samples to be picked up in Kiehl’s offline retail stores

Betagro Digital Transformation Strategy : Acquire & ActivateFree Trial + Auto-Renewal similar to Honest.com



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : ActivateEmail Marketing : Why email marketing?

3%

4%

10%

11%

11%

17%

21%

24%

Referral

Facebook(Newsfeed)

SEO

Direct

Price Comparison

Retargeting

SEM

EDM

Share of Orders

101

134

143

167

217

231

237

332

Price Comparison

Facebook

Retargeting

Referral

SEO

EDM

SEM

Direct

Average Order Value (AOV)

0.39%

0.47%

0.51%

0.57%

0.66%

0.83%

1.10%

2.17%

SEM

Retargeting

Facebook(Newsfeed)

SEO

Price Comparison

Direct

Referral

EDM

Conversion Rate (CVR)

$50

$46

$11

$10

$6

SEM

Retargeting

Price Comparison

Facebook(Newsfeed)

EDM

Cost Per Order (CPO)

Source: aCommerce internal data (etailer client sample, not brand.com. Fashion & apparel ecommerce will have higher share of Facebook)

Email = #1 revenue driver for ecommerce

Betagro Digital Transformation Strategy : ActivateEmail Marketing : Nescafe Automated Welcome Email



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : AcquireCooking Facebook Pages for Vertical Display & Affiliate

• Drive traffic via advertorials and shop now button on Facebook fan pages

• Page owners make money from sending conversions to Betagro

• Leverage aCommerce Affiliate Platform

Betagro Digital Transformation Strategy : AcquireCooking Facebook Pages for Affiliate

Betagro Digital Transformation Strategy : AcquireaCommerce Affiliate Platform case study: One2Car + Frank.co.th

Betagro Digital Transformation Strategy : AcquireAffiliate Marketing & Vertical Sites

• Mai Yom Auon ไม่ยอมอว้น• กินขา้วกนั• Foodtravel.tv• กบัขา้วกบัปลาโอ• กน้ครัวไม่กลวัหิว (pantip's)• สร้างสรรคเ์มนูไข่ (egg menu)

• Easy cooking• Tasty Easy

Betagro Digital Transformation Strategy : AcquireAffiliate Marketing & Vertical Sites

Affiliate Marketing &

Vertical Sites

Health

SiamHealth.net

HaaMor.com

ThaiLoveHealth.com

LoveFit.com

Fit-D.com

WomensHealthThailand.com

DooDeeDai.com

Parenting

Th.TheAsianParent.com

PregnancySquare.com

BreastFeedingThai.com

Maerakluke.com

Baby.Kapook.com

Female

Women.Mthai.com

Jeban.com

Cosmenet.in.th

Price Comparison &

Coupon

Priceza

Promotions.co.th

ShopSmart

DiscountCodeThai

Protook

Dealcha

Cooking

Mai Yom Auon ไม่ยอมอ้วน

กินข้าวกนั

Foodtravel.tv

กบัข้าวกบัปลาโอ

ก้นครัวไมก่ลวัหิว (pantip's)

สร้างสรรค์เมนไูข ่(egg

menu)

Easy cooking

Tasty Easy

Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Health Publishers

Source: SimilarWeb Pro

Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Parenting Publishers


Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Female Publishers


Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Price Comparison & Coupon Publishers


Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Cooking

Source: Facebook, SimilarWeb Pro

Cooking Vertical FB Likes Traffic URL

Mai Yom Auon ไมย่อมอว้น 968,157 https://www.facebook.com/MaiYomAuon

กนิขา้วกัน 1,367,524 https://www.facebook.com/kinkaokan

Foodtravel.tv 750,904 440,600 https://www.facebook.com/FoodTravel.tv

กับขา้วกับปลาโอ 904,090 https://www.facebook.com/Plaocooking

กน้ครัวไมก่ลวัหวิ (pantip's) 547,328 https://www.facebook.com/pantipfoodstuff

สรา้งสรรคเ์มนูไข ่(egg menu) 908,312 https://www.facebook.com/Sangsanmenukai

Easy cooking 1,891,829 https://www.facebook.com/easycookingmenu

Tasty Easy 1,138,055 https://www.facebook.com/tastyeasycooking

8,476,199



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : Activate + EngageTastemade & Tasty on Buzzfeed


Betagro Digital Transformation Strategy : Activate + EngageRecipes on BestFoods.com

Betagro Digital Transformation Strategy : Activate + EngageSearch traffic to BestFoods.com from content created


Betagro Digital Transformation Strategy : Activate + EngageNutricia: HIQ Kids Club - www.hiqkidsclub.com

Betagro Digital Transformation Strategy : Activate + EngageArticles & Content Marketing to drive traffic

Betagro Digital Transformation Strategy : Activate + EngageFacebook Fanpage with 258,000 followers



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : Convert99% of users don’t buy in their first visit -> convert via retargeting



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : ConvertBluecore : What is Bluecore?

Betagro Digital Transformation Strategy : ConvertBluecore : How does it perform?



Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Online-to-

Offline

Ecommerce

(B2C, B2B,

Marketplaces,

On-Demand)

Sampling

Influencer

Marketing

Betagro Digital Transformation Strategy : MonetizationB2C Ecommerce (Brand.com, Marketplaces)

Betagro Digital Transformation Strategy : MonetizationB2C Ecommerce (Brand.com, Marketplaces)

Lazada stores managed

by aCommerce:

• Store Design & Setup

• Store Operations (Day-

to-Day)

• Merchandising

• Marketing

• Customer Service

Betagro Digital Transformation Strategy : MonetizationMarketplace Flagship Store Example: Yurun.Tmall.com

Yurun Group Ltd is the second-largest

meat supplier in China. It is

headquartered in Nanjing, Jiangsu. It

operates in two sectors, chilled and

frozen meat, and processed meat

products, which are marketed under

the brand names of Yurun, Furun,

Wangrun, and Popular Meat Packing.

Source: http://www.chinadaily.com.cn/bizchina/2014-09/19/content_18625695.htm


Digital coupons


239 sold this month to date

Betagro Digital Transformation Strategy : MonetizationOnline-to-Offline

• Build online database for email marketing (educational emails, drive traffic to store)

• Sign up and get free sample product shipped to user

• Leverage users who got samples to write product reviews / social proof, displayed on Betagro site

• Activate member base for special events – pop up shop, etc.

8,000 New

Subscribers

2,000Store visits &


10Online orders



Betagro Digital Transformation Strategy : MonetizationOn-Demand (Betagro Shops, Supermarkets)

• Drive traffic / orders to

Betagro Shops

• Promote Betagro products in

supermarkets

• Advertise / create brand

awareness for new Betagro

products and brands

Betagro Digital Transformation Strategy : MonetizationaCommerce Case Study: PokeSurance with Asia Insurance

Betagro Digital Transformation Strategy : MonetizationaCommerce Case Study: Phatra Leasing

Betagro Digital Transformation StrategyBetagro Value Chain & Gap Analysis

TechnologyProduct Design

Manufacturing MarketingSales &

DistributionService

Demand Generation Demand Fulfillment

Educate Acquire Activate Engage Convert Monetize

As-Is

• Event marketing

(Roadshow,

University, Mall,

etc.)

• TVC

• OOH / Ambient

Advertising

• Music Videos

• CSR

• Free Sampling

in Supermarket

(booth), Events

• Free Sampling

in Supermarket

(booth), Events

• Betagro.com

• Betagro Society

(YouTube,

Facebook)

• Retail partners

(Tops, Lotus,

Big C,

FamilyMart,

etc.)

• Betagro Shops

• B2B (Horeca)

To-Be

• + Facebook Ads

• + Display Ads

(Vertical, GDN)

• + Influencer

Marketing

• + Google SEO

• + Google Paid

Search

• + Facebook Ads

• + Display Ads

(Vertical, GDN)

• + Influencer

Marketing

• + Google SEO

• + Affiliate

Marketing

• + Betagro.com

(revamped)

• + Betagro Blog

& Commmunity

• + Content

Marketing (e.g.

Tastemade,

Tasty, etc.)

• + Email

Marketing

• + Betagro.com

(revamped)

• + Betagro Blog

& Commmunity

• + Content

Marketing (e.g.

Tastemade,

Tasty, etc.)

• Criteo

• Bluecore

• + Betagro

Ecommerce

Brand.com

• + Marketplaces

(e.g. Lazada,

etc.)

• + On-demand

(HonestBee,

HappyFresh)

• + O2O (Online-

to-Offline)

• + B2B

Ecommerce

Betagro Digital Transformation StrategyProposed Digital Transformation Roadmap

Phase 1

Q4 ’16 – Q1 ‘17

Phase 2

Q1 ’17 –

Phase 3

Q2 ’17 –

Marketing

• Brand awareness

• Build email database

(samples, Lazada voucher)

• Content marketing (onsite

articles, advertorials)

• Performance marketing

• Brand.com development


• Content marketing (onsite

articles, advertorials)


Sales & Distribution

• Betagro Lazada Flagship

Store

• WindowShop

• O2O

• Betagro Corporate Website

Revamp

• Betagro Blog & Community

• Other marketplaces

(WeMall, 11street, etc.)

• Brand.com (E2E

ecommerce)

• B2B Ecommerce

• On-Demand (Honestbee,

Happy Fresh)

Betagro Digital Transformation StrategyBetagro Corporate Website Revamp

3 aCommerce Marketing Solutions Intro

Marketing VisionTo moneyball traditional digital marketing in Southeast Asia

The way ‘Moneyball’ changed the game of baseball, we are disrupting traditional digital marketing in SEA

Marketing VisionFinancial and mathematical approach towards marketing

Marketing#1 Ecommerce marketing agency in SEA

Fastest growing ecommerce marketing agency in SEA

5

75

2013 2015

Active marketing clients

12

22

2015 2016e

Marketing billings ($M)

Unique value prop: full-stack ecommerce performance marketing

Strategic partnerships and proprietary demand gen products

Trusted by blue-chip SEA ecommerce retailers and global brands

Data-driven, end-to-end approach towards marketing

CPA, CAC, CLV optimization, not vanity metrics

MarketingOur Approach: Mathematics of Marketing

ROI

CLV

ARPU

Gross Margin

Avg. Customer Lifetime 1 / (1-r)

Retention Rate (r)

CAC

CPC

CPM

CTR

CVR

MarketingOur Approach: Optimize for CLV, not just CAC

MarketingOur Approach: Full-Stack, Full-Cycle Media Planning


Email

Marketing

Content Marketing

E.g.

Affiliate

Marketing

Data

Financial

Services

(Residential

Insurance, Fire

Insurance, Loans /

Installment, etc.)

Advertising

Services

(Home

Improvement,

Design, etc.)

MarketingHolistic, data-driven approach towards ecommerce marketing

Strategy &Customer Research

Customer Acquisition &

Activation

Site Landing

Product Discovery

Product Presentation

Shopping Cart Management

Checkout

Order Fulfillment

After-Sales Service

• Homepage• Landing pages• Offers and promotions• User special pages

• Search and filtering• Category browsing• Sorting and ordering• Product previews• Personalization &

recommendations

• Product description• Images and other media• Reviews & recommendations• Product configuration

• Cart management• Shipping options• Wish list• Personalization &

recommendations

• Guest checkout• Payment options• Shipping options• Promo codes• Order confirmation

• Shipping & delivery• Real-time order tracking• Packaging• Notifications

• Search & display• Re-marketing• Word-of-mouth• Email• Social• CRM

• Order cancellation & refunds• Return shipping• Personalization & recommendations• Customer surveys & feedback

Data

• Demographics & psychographics• Media consumption• Purchasing behavior• Customer lifecycles

DW, DMP & BI Tools

aCommerce Marketing Solutions

Performance Marketing Solutions

Acquisition Marketing

Activation Marketing

Mobile App Marketing

WindowShop (PH)

LaunchPad (TH)

Marketing Technology

ShopSmart

B2C (Price Comparison &

Coupon)

B2B (Data & Audiences)

Headlines & Trending (Content

Marketing)

Facebook Chat Bot

aCommerce Affiliate Network

Bluecore

B2B Marketing & Demand

Generation

ecommerceIQ

aCommerce.asia

MarketingServices & Product Overview

aCommerce Marketing Solutions

(Sheji)

Performance Marketing Solutions

Thailand

(Ten)

SG, MY, VN

(Sheji, acting)

Indonesia

(Adit)

Philippines

(Kat)

Corporate Marketing & eCommerce IQ

(Felicia)

Thailand

(Felicia)

Indonesia

(Stephanie)

Marketing Technology

(Sheji)

ShopSmart

(Pat)

Headlines & Trending

(Pat)

Bluecore

(Bom)

Affiliate

(Bo & Intan)

Regional teams

• Sheji Ho, Group CMO

• Gilt Groupe, Moda Operandi, Groupon, Dell

• MBA, New York University, Stern School of Business

• Felicia Moursalien, Head of Corp. Marketing & eCommerce IQ

• Zalora, United Nations

• BA, University of Toronto, Trinity College

• Ten Chantaramungkorn, Head of Marketing, Thailand

• Lazada Regional

• MS, Imperial College London

• Katrina Cruz, Head of Marketing, Philippines

• Lazada Regional

• BA, University of Philippines

• Aditya Jamaludin, Head of Marketing, Indonesia

• Lazada Indonesia

• BS, Universitas Gadjah Mada (UGM)

11

5

5

4

5

MarketingRegional & Country Team Leads

Director of Internet

Marketing

Head of Internet Marketing

Senior Internet Marketing Manager

Internet Marketing Managers

(Sr.) Internet Marketing Analysts



Senior Internet Marketing Manager





Head of Marketing Operations

Project Manager

Data Analytics Manager

Tech Manager

Billing/Invoicing Manager

Head of Digital Design

Digital Design Manager

Digital Designers

Digital Design Manager

Digital Designers

Head of Acquisition Marketing

SEM Team Lead

SEO Team Lead

Social Media Team Lead

Affiliate Marketing Team

Lead

Mobile Marketing Team

Lead

Head of Activation &

Retention Marketing

EDM Team Lead

Remarketing Team Lead

Loyalty & Retention Team

Lead

Onsite Optimization Team Lead

Head of Product

Product Manager –

Partnerships (Bluecore,

Shopline, etc.)

Product Manager –

ShopSmart (B2C)

Product Manager –

ShopSmart (B2B)

Product Manager –Headlines &

Tredning

Product Manager –Affiliate Platform

Country marketing solutions team structure

Experienced brand and technical marketers from leading ecommerce and digital agencies

MarketingCountry Team Structure

Marketing TechnologyLeveraging existing Best-of-Breed (BoB) platforms

SEM

Google Adwords

DoubleClick

Analytics

Google Analytics Campaign Monitor

Mixpanel

Facebook Marketing

Facebook / FBX

Mouseflow

Email Marketing

Retargeting

Criteo

Business Intelligence

RJ Metrics

LeftronicTesting & Optimization

Optimize.ly

Affiliate Marketing

Interspace

aCommerce

Google Adwords

Personalization

Scigineer

aCommerce

Bluecore

Upcast

Price Comparison & Coupon

ShopSmart

Marketing TechnologyBluecore: Automated, Personalized Trigger Emails

http://marketing.acommerce.asia/marketing/bluecore/tommy%20abandon%20search.gif

http://marketing.acommerce.asia/marketing/bluecore/tommy abandon search.gif


http://marketing.acommerce.asia/marketing/bluecore/mataharimall%20window%20shopping.gif

http://marketing.acommerce.asia/marketing/bluecore/mataharimall window shopping.gif

Marketing TechnologyBluecore: Why email marketing?

3%

4%

10%

11%

11%

17%

21%

24%

Referral

Facebook(Newsfeed)

SEO

Direct

Price Comparison

Retargeting

SEM

EDM

Share of Orders

101

134

143

167

217

231

237

332

Price Comparison

Facebook

Retargeting

Referral

SEO

EDM

SEM

Direct

Average Order Value (AOV)

0.39%

0.47%

0.51%

0.57%

0.66%

0.83%

1.10%

2.17%

SEM

Retargeting

Facebook(Newsfeed)

SEO

Price Comparison

Direct

Referral

EDM

Conversion Rate (CVR)

$50

$46

$11

$10

$6

SEM

Retargeting

Price Comparison

Facebook(Newsfeed)

EDM

Cost Per Order (CPO)

Source: aCommerce internal data (etailer client sample, not brand.com. Fashion & apparel ecommerce will have higher share of Facebook)

Email = #1 revenue driver for ecommerce

Marketing TechnologyShopSmart: Price Comparison Engine for Thailand and Indonesia

Marketing TechnologyHeadlines & Trending by ShopSmart – Gadget & Lifestyle Portal

Marketing TechnologyHeadlines & Trending by ShopSmart – Gadget & Lifestyle Portal

• Over 1 million sessions per month

• Proprietary marketing channel & content marketing opportunity for 11street

Marketing TechnologyaCommerce Affiliate Platform & Network

Clients:

Marketing TechnologyATT Skybox

• O2O marketing channel

• TVC, NFC, voucher distribution, offline branding

• Current clients: Lazada, Central Online

Marketing TechnologyATT Skybox

Strategic PartnershipsaCommerce x Google

Strategic PartnershipsaCommerce x Facebook

aCommerce is chosen as a case study for Facebook as it proves to deliver business results – by optimizing Facebook campaigns in real time and delivering personalized ads to match the fast-moving pace of retail environment

Case Studies – O2O (Vouchers)Leveraging online demand into offline foot traffic and sales

• Build online database for O2O activation

• Sign up and get voucher or QR code emailed to user

• Redeem voucher in purchase in offline store

• Leverage online database to drive foot traffic to offline stores

• Activate member base for special events – pop up shop, collaborations, etc.

8,000 New

Subscribers

2,000Store visits &


10Online orders



Case Studies – O2O (Vouchers)Leveraging online demand into offline foot traffic and sales

aCommerce’s Huawei Thailand Line Hot Brand campaign targeting 5 million Line users and offering free Bluetooth speakers for members resulted in long lines in Jaymart, an official offline retailer for Huawei mobile phones.

Case Studies – O2O (Gift Cards)Sell H&M gift cards online, driving offline redemptions

• Order H&M gift cards online

• Redeem gift cards in offline stores

• “Test” apetite for ecommerce and performance of marketing channels prior to full E2E ecommerce launch

• Track customer LTV and marketing channel efficiency via unique gift card IDs

• Build business case for full E2E ecommerce

Global search volume for H&M gift cards and vouchers growing YoY, with peaks during gifting seasons. Selling H&M gift cards online in Indo will boost offline sales.

Starbucks selling gift cards online with customizable amount and gifting options.

Case Studies – Chat / Conversational Commerce“2016 will be the year of conversational commerce”

Source: https://medium.com/chris-messina/2016-will-be-the-year-of-conversational-commerce-1586e85e3991

• Messaging apps have already surpassed social networks in terms of MAUs

• Standalone, concierge apps looking to tap into chat commerce trend – Magic (US), Operator (US), and

YesBoss (ID)

• FB Messenger Platform launched at F8 in 2016 – APIs and tools to build and automate commerce in

messaging apps (already used by Uber, Spring & More)

• Leapfrogging in SEA – Whilst still a novelty in the West, chat commerce is already a reality in SEA: 33% of Thailand ecommerce GMV through Facebook, Instagram, and Line

Animated GIF demo – view full screen to play

Case Studies – Chat / Conversational CommerceConversational commerce process for H&M Indonesia

Pay via FB or COD

(aCommerce)

Collect cash (optional)

Dispatch aCommerce

messenger to pick up in

store

Bring products to central

packing location (incl.

consolidation of SKUs from

multiple stores)

Deliver to end consumer

Chat agent manned by aCommerce CS staff + FB Messenger

Platform A.I. developed by aCommerce (e.g. latter for browsing

product catalog in chat)

Case Studies – Chat / Conversational CommerceShopSmart Price Comparison & Coupon FB Chatbot

Animated GIF, full screen to play

Case Studies – CRM / Loyalty H&M Mobile Loyalty App

• Create and launch H&M mobile loyalty app via Flok

• Leverage online database & app install marketing to drive adoption of H&M loyalty app

• Increase customer LTV through reward points for purchases in H&M offline retail

• Leverage push notifications to activate member base for special events – pop up shop, collaborations, etc.

• Geo-targeting users based on proximity to H&M offline stores

“Create your own virtual zone around your business with a neighborhood perks. Any time a regular enters that area they will automatically get this push notification. It is a great way to target customers close to your business or at a particular event.”

Marketing – How do we work with our partners?The Mathematics of Marketing: Marketing Biz Plan

ROI

CLV

ARPU

Gross Margin


Retention Rate (r)

CAC

CPC

CPM

CTR

CVR

Marketing – How do we work with our partners?The Mathematics of Marketing: Marketing Biz Plan

ROI

CLV

ARPU

Gross Margin


Retention Rate (r)

CAC

CPC

CPM

CTR

CVR

Traditional agency focus (vanity metrics)

Marketing – How do we work with our partners?Marketing Business Plan

Summary (Year 1)

Budget Marketing $4,287,875

Orders 212,117

Revenue $12,177,815

AOV $57

ROI (Revenue) 184%

ROI (Gross Margin, assuming 30%) -15%

Marketing Metrics (Year 1)

Budget $4,287,875

Clicks 27,208,326

Sessions (Blended) 19,575,778

Email Subscribers 731,470

Orders (Blended) 212,117

CPC $0.16

CPS $0.22

CVR (Email Subscribers) 3.7%

CVR (Orders, incl. repeat) 1.1%

CPA (Email Subscribers) $6

CPA (Orders, incl. repeat) $20

COS (Cost of Sales) 35%

COS (Cost of Sales, incl. coupon code cost) 40%

Songkran 11/11 12/12 Low Season

M1 = March 2016 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Phase 1

Phase 2

Phase 3

Phase 4

Promotions/Coupons

MARKETING

I. Customer Acquisition Search engine marketing (SEM) $40,000 $40,000 $40,000 $60,000 $60,000 $60,000 $100,000 $100,000 $100,000 $80,000 $80,000 $80,000 $840,000

& Demand Harvesting Facebook marketing (incl. Instagram) $120,000 $120,000 $120,000 $60,000 $60,000 $60,000 $100,000 $100,000 $100,000 $80,000 $80,000 $80,000 $1,080,000

Remarketing $53,333 $106,667 $106,667 $80,000 $80,000 $80,000 $133,333 $133,333 $133,333 $106,667 $106,667 $106,667 $1,226,667

Afilliate marketing $0 $10,000 $15,000 $20,000 $30,000 $40,000 $50,000 $60,000 $60,000 $60,000 $60,000 $60,000 $465,000

SEO - Offsite $5,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $115,000

Partnerships (Line, Telco, Banks, etc.) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal $218,333 $286,667 $291,667 $230,000 $240,000 $250,000 $393,333 $403,333 $403,333 $336,667 $336,667 $336,667 $3,726,667

II. Customer Activation Email platform and sending $699 $1,199 $1,999 $2,299 $2,969 $3,349 $3,789 $4,749 $5,229 $5,709 $5,709 $5,709 $43,408

Marketing emails produced per month 0 4 8 12 16 20 24 24 24 24 24 24

Trigger emails produced per month 2

Email production $600 $1,200 $2,400 $3,600 $4,800 $6,000 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $61,800

Bluecore $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $10,000 $118,000

% of Orders activated with promo code 95% 86% 77% 69% 62% 56% 50% 45% 41% 37% 33% 30%

First order promocode 15% (recommended) $48,889 $61,298 $61,709 $32,915 $34,007 $34,690 $47,792 $70,547 $66,403 $54,912 $34,885 $33,299 $581,345

Subtotal (excl. promo codes) $1,299 $2,399 $16,399 $17,899 $19,769 $21,349 $22,989 $23,949 $24,429 $24,909 $24,909 $22,909 $223,208

III. Onsite / Conversion Optimization Email capture popup $2,000 $2,000

SEO - Onsite (setup and ongoing maintenance) $10,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $21,000

Subtotal $12,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $23,000

IV. Tracking, Configuration & Dashboards Google Analytics (Enhanced EC tracking) $2,000 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $7,500

XML product feed development $2,000 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $7,500

Subtotal $4,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $15,000

V. Media Buying, Optimization & Management (fixed fee) $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $300,000

Effective % 11% 9% 9% 11% 10% 10% 6% 6% 6% 7% 7% 7% 8%

Total $260,632 $316,066 $335,066 $274,899 $286,769 $298,349 $443,322 $454,282 $454,762 $388,576 $388,576 $386,576 $4,287,875

Est. CPCs Search engine marketing $0.15 $0.15 $0.15 $0.15 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.13 $0.14

Facebook marketing $0.10 $0.10 $0.10 $0.10 $0.10 $0.10 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09

Remarketing $0.20 $0.20 $0.20 $0.19 $0.19 $0.19 $0.19 $0.19 $0.18 $0.18 $0.18 $0.18 $0.19

Affiliate marketing $0.15 $0.15 $0.15 $0.15 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.13

Est. Clicks Search engine marketing 266,667 269,360 272,081 412,244 416,408 420,614 708,105 715,257 722,482 583,824 589,721 595,678 5,972,442

Facebook marketing 1,200,000 1,212,121 1,224,365 618,366 624,612 630,921 1,062,157 1,072,886 1,083,723 875,736 884,582 893,517 11,382,988

Remarketing 266,667 538,721 544,162 412,244 416,408 420,614 708,105 715,257 722,482 583,824 589,721 595,678 6,513,884

Affiliate marketing 0 67,340 102,030 137,415 208,204 280,410 354,052 429,154 433,489 437,868 442,291 446,759 3,339,012

Total 1,733,333 2,087,542 2,142,639 1,580,269 1,665,633 1,752,560 2,832,419 2,932,555 2,962,177 2,481,252 2,506,315 2,531,632 27,208,326

Est. Visits Search engine marketing 177,778 179,574 181,387 274,829 277,605 280,410 472,070 476,838 481,655 389,216 393,148 397,119 3,981,628

Facebook marketing 800,000 808,081 816,243 412,244 416,408 420,614 708,105 715,257 722,482 583,824 589,721 595,678 7,588,658

Remarketing 177,778 359,147 362,775 274,829 277,605 280,410 472,070 476,838 481,655 389,216 393,148 397,119 4,342,589

Affiliate marketing 0 44,893 68,020 91,610 138,803 186,940 236,035 286,103 288,993 291,912 294,861 297,839 2,226,008

Partnerships (Line, Telco, Banks, etc.) 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 360,000

Organic (incl. direct, SEO, EDM) 1,000 10,000 30,000 38,400 49,152 62,915 78,643 98,304 122,880 153,600 192,000 240,000 1,076,894

Total 1,186,556 1,431,695 1,488,426 1,121,913 1,189,574 1,261,288 1,996,923 2,083,341 2,127,665 1,837,768 1,892,877 1,957,754 19,575,778

% paid visits 97% 97% 96% 94% 93% 93% 95% 94% 93% 90% 88% 86% 81%

% organic visits 3% 3% 4% 6% 7% 7% 5% 6% 7% 10% 12% 14% 19%

Est. CVR (Customers) Search engine marketing 0.80% 0.82% 0.83% 0.85% 0.87% 0.88% 0.90% 0.92% 0.94% 0.96% 0.98% 0.98% 0.91%

Facebook marketing 0.50% 0.51% 0.52% 0.53% 0.54% 0.55% 0.56% 0.57% 0.59% 0.60% 0.61% 0.62% 0.56%

Remarketing 0.70% 0.71% 0.73% 0.74% 0.76% 0.77% 0.79% 0.80% 0.82% 0.84% 0.85% 0.86% 0.79%

Partnerships (Line, Telco, Banks, etc.) 0.60% 0.61% 0.62% 0.64% 0.65% 0.66% 0.68% 0.69% 0.70% 0.72% 0.73% 0.75% 0.67%

Organic 1.50% 1.52% 1.53% 1.55% 1.56% 1.58% 1.59% 1.61% 1.62% 1.64% 1.66% 1.67% 1.63%

Blended CVR 0.58% 0.66% 0.70% 0.82% 0.88% 0.93% 0.89% 0.93% 0.94% 0.99% 1.01% 1.02% 0.98%

Est. CVR (Subscribers and Registered Users) Search engine marketing 4.00% 4.08% 4.16% 4.24% 4.33% 4.42% 4.50% 4.59% 4.69% 4.78% 4.88% 4.92%

Facebook marketing 2.50% 2.55% 2.60% 2.65% 2.71% 2.76% 2.82% 2.87% 2.93% 2.99% 3.05% 3.08%

Display re-marketing 3.50% 3.57% 3.64% 3.71% 3.79% 3.86% 3.94% 4.02% 4.10% 4.18% 4.27% 4.31%

Affiliate marketing 4.00% 4.08% 4.16% 4.24% 4.33% 4.42% 4.50% 4.59% 4.69% 4.78% 4.88% 4.92%

Partnerships (Line, Telco, Banks, etc.) 3.00% 3.06% 3.12% 3.18% 3.25% 3.31% 3.38% 3.45% 3.51% 3.59% 3.66% 3.73%

Organic 4.50% 4.55% 4.59% 4.64% 4.68% 4.73% 4.78% 4.82% 4.87% 4.92% 4.97% 5.02%

Blended CVR 2.89% 3.07% 3.17% 3.51% 3.62% 3.73% 3.77% 3.87% 3.95% 4.08% 4.17% 4.23%

Est. Paid Orders (last touch attribution) Search engine marketing 1,422 1,465 1,510 2,333 2,404 2,477 4,253 4,382 4,515 3,721 3,834 3,911 36,227

Facebook marketing 4,000 4,121 4,246 2,187 2,254 2,322 3,987 4,108 4,233 3,489 3,594 3,667 42,208

Display re-marketing 1,244 2,564 2,642 2,042 2,103 2,167 3,721 3,834 3,950 3,256 3,355 3,422 34,302

Affiliate marketing 0 980 1,442 1,885 2,772 3,623 4,440 5,223 5,121 5,021 4,922 4,826 40,254

Partnerships (Line, Telco, Banks, etc.) 180 184 187 191 195 199 203 207 211 215 219 224 2,414

Total Paid Orders 6,847 9,315 10,027 8,638 9,727 10,788 16,604 17,754 18,029 15,702 15,925 16,050 155,405

Est. Organic Orders 15 152 459 593 767 992 1,252 1,581 1,996 2,520 3,181 4,016 17,525

Est. Total Orders (Paid + Organic Orders) 6,862 9,466 10,486 9,231 10,495 11,779 17,856 19,335 20,025 18,221 19,106 20,067 172,930

Est. Total Daily Orders 229 316 350 308 350 393 595 645 668 607 637 669 5,764

Existing Email Subscribers 0

Est. Registered Users & Email Subscribers 34,278 43,958 47,133 39,435 43,091 47,055 75,211 80,543 84,074 74,919 78,933 82,840 731,470

Est. Registered Users & Email Subscribers (Cumulative) 34,278 78,237 125,370 164,805 207,896 254,950 330,161 410,704 494,778 569,697 648,630 731,470 731,470

Est. Total Customers (New + Repeat Customers) 6,862 9,466 10,486 9,231 10,495 11,779 17,856 19,335 20,025 18,221 19,106 20,067 172,930

Est. % of New Customers in Cohort 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% 90% 94%

Est. New Customers 6,862 9,372 10,277 8,957 10,081 11,202 16,811 18,022 18,478 16,646 17,279 17,966 161,953

Est. New Customers (Cumulative) 6,862 16,233 26,511 35,468 45,549 56,751 73,562 91,584 110,062 126,708 143,987 161,953 895,228

Est. Repeat Customers 0 95 209 274 414 577 1,045 1,314 1,547 1,576 1,827 2,100 10,977

Est. Lifetime Orders Per New Customer (1-year) 1.5 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.8 1.8 1.8 1.9

Est. Total Realized Orders 6,862 9,778 11,241 10,491 12,211 14,030 20,723 23,160 24,915 24,243 26,184 28,280 212,117

Est. Total Realized Orders / Day 229 326 375 350 407 468 691 772 831 808 873 943

Est. Total Realized Revenue $343,083 $498,690 $584,743 $556,651 $660,890 $774,510 $1,166,854 $1,330,165 $1,459,600 $1,448,629 $1,595,884 $1,758,116 $12,177,815

Avg. Month-on-Month Total Orders Growth 38% 11% -12% 14% 12% 52% 8% 4% -9% 5% 5%

Avg. Paid CPA $32 $31 $29 $27 $25 $23 $24 $23 $22 $21 $21 $21 $20

Avg. Blended CPA $38 $33 $32 $30 $27 $25 $25 $23 $23 $21 $20 $19 $25

Est. Average Order Value (AOV) $50 $51 $52 $53 $54 $55 $56 $57 $59 $60 $61 $62

Est. Revenue $343,083 $482,783 $545,477 $489,815 $567,984 $650,270 $1,005,460 $1,110,500 $1,173,142 $1,088,810 $1,164,495 $1,247,517 $9,869,337

Est. ROI (Realized Revenue) 32% 58% 75% 102% 130% 160% 163% 193% 221% 273% 311% 355% 184%

Est. ROI (Gross Margin, assuming 30%) -61% -53% -48% -39% -31% -22% -21% -12% -4% 12% 23% 36% -15%

Est. ROI (Gross Margin, assuming 30%, minus coupon code cost) -79% -72% -66% -51% -43% -34% -32% -28% -18% -2% 14% 28% -28%

Est. COS (Cost of Sales) 76% 63% 57% 49% 43% 39% 38% 34% 31% 27% 24% 22% 35%

Est. COS (Cost of Sales, incl. coupon code cost) 90% 76% 68% 55% 49% 43% 42% 39% 36% 31% 27% 24% 40%

Dependencies:

Organic traffic 1,000 10,000 30,000 38,400 49,152 62,915 78,643 98,304 122,880 153,600 192,000 240,000

SKUs required 333 3,333 10,000 12,800 16,384 20,972 26,214 32,768 40,960 51,200 64,000 80,000

Organic traffic : SKU ratio 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00

Cohorts:

Monthly orders 6,862 9,466 10,486 9,231 10,495 11,779 17,856 19,335 20,025 18,221 19,106 20,067

Avg. monthly orders 312 443 505 457 534 616 958 1,065 1,132 1,056 1,135 1,222

312 443 505 457 534 616 958 1,065 1,132 1,056 1,135

312 443 505 457 534 616 958 1,065 1,132 1,056

312 443 505 457 534 616 958 1,065 1,132

312 443 505 457 534 616 958 1,065

312 443 505 457 534 616 958

312 443 505 457 534 616

312 443 505 457 534

312 443 505 457

312 443 505

312 443

312

Launch + Branding + First Time Customer Promos

15% Off for First Time Customers

Customer Activation

Optimization

11/11 + 12/12 Campaigns

10% Off for First Time Customers15% Off for First Time Customers10% Off for First Time Customers

Marketing – How do we work with our partners?Marketing Business Plan – Actuals vs Targets Monitoring

Marketing – How do we work with our partners?Engagement Model

Traditional Digital Agencies aCommerce

Remuneration • Management fee % of media spend + CPC/CPM markup

• Retainer

• Classic: management & optimization fee % of media + a la carte services (onsite SEO, analytics, dashboards, CRO, CRM)

• Hybrid: classic + performance bonus• Performance: COGS + CPA

Partnership Relationship-based (with agency rebates)

Performance-based (hitting marketing business plan targets)

Scope of Work Top of Funnel (ToFu) – media buying, impressions, CPM, impression share

ToFu, MoFu (Mid of Funnel) & BoFu (Bottom of Funnel)

Objective Driving impressions (i.e. getting client to spend as much as possible)

Driving sales @ positive ROI @ scale

Team Communications, advertising, marketing & language majors

Comms, Marketing, Business, Finance,Engineering, Math, Stats, Computer Science majors

Marketing – How do we work with our partners?Launch Phase

Marketing Service Details

Tracking & Analytics • Set up and configure Google Analytics (incl. e-commerce tracking) via Google Tag Manager

• Set up and configure Mixpanel tracking• Implement UTM tracking in the database• Add Adwords, Facebook, and Retargeting tracking and conversion pixels• Create dashboard for day-to-day performance tracking

SEM • Create master sheet with account structure, keywords and ad copies• Upload master sheet into Google Adwords

SEO • Perform full site audit and create document with detailed recommendation regarding page titles, meta descriptions, etc.

• Reach out to bloggers, webmasters, and publishers for linkbuilding

Facebook • Create master sheet with account structure• Create banners• Set up ads in Facebook

Retargeting (Facebook & Display) • Create XML product feed and integrate into retargeting platforms• Create dynamic creatives

Email Marketing • Set up and configure Campaign Monitor for marketing emails• Design and code email templates• Work with client team to implement automated trigger emails

Personalization • Set up and configure TargetingMantra tags• Implement TargetingMantra personalization widgets on client site

Marketing – How do we work with our partners?Steady-state phase cadence

MarketingService

Daily Weekly Monthly

Tracking & Analytics

• Daily performance dashboard shared with client team

• Pull data from database and other sources for analysis

• Weekly meeting with client to go over dashboard

• Monthly meeting with client to review actuals vs. target, lessons learned, and next month’s action items

• Cohort and LTV analysis (via Mixpanel, database)

SEM • Monitoring and optimization (budget re-allocation, pause/unpause campaigns/keywords, adjust bids and bidding strategies)

• Weekly keyword re-feed (from actual searches and new SKUs)

SEO • Linkbuilding • Linkbuilding • Monthly SEO performance report (ranking for keywords, inbound links, organic orders and revenue, etc.)

Facebook • Monitoring and optimization (budget re-allocation, pause/unpause campaigns, adjust bids and bidding strategies)

• Refresh ads 2-3 times a week• Creative testing

Retargeting (Facebook &Display)

• Monitoring and optimization (budget re-allocation, pause/unpause campaigns, adjust bids and bidding strategies)

• Refresh templates once a month

Email Marketing • Daily performance dashboard shared with client team

• Design, code, and send out weekly campaign marketing email

• Monitor transactional and trigger email performance

• Monthly EDM performance report to review results, learnings, and action items

4 Southeast Asia Ecommerce Macro-Level Overview

Southeast Asia macroeconomic and industry landscapeSEA slated to become a top 3-4 largest ecommerce market globally

Source: Google x Temasek, “e-conomy SEA: Unlocking the $200 billion digital opportunity in Southeast Asia”

0.40.5

0.9

1.0

1.0

5.5

1.7

TotalSGTHID PHVN MY

7.5

9.7

11.1

8.2

87.9

46.0

PH

5.4

VNID TotalTH SGMY

By 2025, all SEA countries will have an ecommerce market >$5 billion;

Thailand and Indonesia expected to reach $11.1 and $46 billion

Ecom

% of

retail

0.6% 0.6% 0.5% 0.8% 1.1% 2.1% 0.8% 8.0% 4.7% 4.7% 5.5% 5.4% 6.7% 6.4%

Ecommerce market ($ billion)

2015 2025

CAGR: 32%

Southeast Asia macroeconomic and industry landscapeHowever: Google-Temasek projections for SEA too conservative

$13.2$17 $22 $28 $36 $46 $58 $75 $96$123$157

$3 $6 $15 $30 $52 $88$145$218

$310$419

$509$618

$750

$910

$1,104

$1,264

$1,446

$1,655

$1,894

$2,168

$98$120$155$197$248$310

$380$454$467$476

$552$644

$734$835

$959$1,087

$1,219$1,296

$1,503

$1,656

$1,825

$1,992

$2,175

$2,375

$2,592

$2,830

0

500

1000

1500

2000

2500

3000

Ecommerce Retail Sales / Capita ($ USD)

Thailand Indonesia China United States

Source: eMarketer, China Internet Watch, Census.gov, World Bank, Google x Temasek

China 2006 2016 Change

Ecom Retail

Sales / Capita$4 $509 127x

Ecom % of

Total Retail0.3% 13.8% 46x

Total Retail %

of GDP48% 45%

GDP / Capita $2,082 $8,236

Thailand 2016 2025 Change

Ecom Retail

Sales / Capita$13 $157 12x

Ecom % of

Total Retail0.8% 5.5% 7x

Total Retail %

of GDP34% 43%

GDP / Capita $6,230 $6,649

Based on China benchmarks (Total Retail % of GDP and Ecom Retail Sales / Capita), Thailand ecommerce

GMV by 2025 should be at least 3x the Google-Temasek projection, i.e. $33 billion, not $11 billion.

$3.9 $8 $19 $39 $69$118$196

$296$422

$575$701

$855

$1,043

$1,272

$1,551

$1,784

$2,052

$2,359

$2,713

$3,120

$28 $34 $45 $57 $73 $91$113$137$142$146$171$201$231$264$306$349$394$423$494$548$609$669

$736$810

$891$980

0

500

1000

1500

2000

2500

3000

3500

Retail Ecommerce Sales ($ billion)

Thailand Indonesia China United States

Southeast Asia macroeconomic and industry landscapeSEA ecommerce fragmented but consolidation will happen

Source: iResearch, Google Trends

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%

China 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%

China 2014Q1

Like China in ‘08, ecommerce market still fragmented –

1-2 key players to emerge within the next 5 years

0%

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20

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20

16

-8

Thailand Ecommerce Google Search Interest

lazada itruemart tarad kaidee weloveshopping ensogo advice zalora jib shopat7 cdiscount moxy central online

Southeast Asia macroeconomic and industry landscapeBack of the envelope calculations for Thailand ecommerce…

Total market:

• Let’s say $1B market size today (AT Kearney / Google x Temasek)

• AOV of $20 (incl. C2C transactions which are typically smaller)

• $1B / 365 / $30 = 91K orders per day

B2C:

• Let’s say $1B market size today

• 50% B2C

• AOV of $50 (due to more electronics/mobile phones in B2C)

• $0.5B / 365 / $50 = 27K orders per day

C2C:

• 91K – 27K = 64K orders per day

• $0.5B / 365 / 64K = $21 AOV

Southeast Asia macroeconomic and industry landscapePredictions for SEA should be based on China, not global average

Source: https://www.youtube.com/watch?v=eh1c5G7gXQE

Southeast Asia macroeconomic and industry landscapePredictions for SEA should be based on China, not global average

“Why did Internet e-commerce grow so much

faster in China than in the USA? Because the

infrastructure of commerce in China was bad.

Unlike here, where you have all the (physical)

shops: Wal-Mart, K-Mart, everything,

everywhere. But in China, we have nothing,

nowhere. So e-commerce in the US is just a

dessert; it's complementary to the main

business. But in China, it's the main course.” – Jack Ma

Source: https://www.youtube.com/watch?v=eh1c5G7gXQE

Southeast Asia macroeconomic and industry landscapeEcommerce in SEA today is China circa 2007/08

Source: CNNIC, eMarketer

1.3%2.1%

3.5%4.4%

6.3%7.4%

12.4%

15.9%

19.6%

23.8%

28.6%

0%

5%

10%

15%

20%

25%

30%

35%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

China Ecommerce Penetration (% Online Retail / Total Retail)

SEA today

China Ecommerce SEA?

Lack of offline retail infrastructure

(especially outside Tier 1 cities)

Surging domestic consumption spurred

by growth in GDP / capita

Major capital investment into

ecommerce businesses

Young, digitally savvy consumers

COD as dominant payment method (in

the early days)

Lack of cross-border ecommerce due

to high import duties and taxes

“No-Tail” ecosystem

Hyper-competition

1) Based on ecommerce penetration, SEA is 8 years behind China. However, SEA will catch up faster due to leapfrogging – 5 years estimate

2) China is the model to predict SEA’s ecommerce future due to similarities in the ecosystem. US/EU/Japan/Korea/Singapore not the right models

for SEA

3) There are differences though: a) SEA is more mobile-first/mobile-only than China; b) China had a headstart in terms of logistics infrastructure

due to the top-down, planned economy nature of the government; c) China made the rapid transition from COD to Alipay as preferred payment

method due to the massive distribution power of Alibaba; d) SEA is more competitive due it being an open market vs. China’s closed market,

making it easier for foreign companies to enter SEA

Southeast Asia macroeconomic and industry landscapeEcommerce in SEA today is China circa 2007/08

Source: Euromonitor, Planet Retail, eMarketer, iResearch, Technavio, A.T. Kearney

~5 years

Southeast Asia macroeconomic and industry landscapeKey factors influencing ecommerce in SEA

Source: CLSA, aCommerce

• Large addressable markets with young populations

• Offline retail is underpenetrated

• Rising income levels

• Social media - well connected + social commerce

• High-degree of mobile Internet penetration (exceeding US and China)

• “No-Tail” ecosystem

• Online payment – still dominated by Cash-on-Delivery

• Logistics under-developed (especially B2C)

• Import duties, taxes and online prices – lack of cross-border ecom

(excl. Singapore)

• Open market (compared to China) – hyper-competition (easier for

global entrants to enter and compete)

• Private/direct equity funding – more money than talent available

Key drivers for ecommerce in SEAOffline retail underpenetrated

Source: CLSA

32,473

6,415

2,178941

1,804847

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Total store count, top 10 retailers

157,631

34,666

3,999 2,698 1,736 4,702

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Total retail GFA, top 10 retailers

2.2

0.5

0.1

0.8

0.3

0.5

0

0.5

1

1.5

2

2.5

Total retail GFA / capita (RHS)

Offline retail in SEA under-developed (especially outside major metropolitan

areas). Lack of offline retail legacy will enable SEA ecommerce to accelerate

at rates similar to China levels (>30-40% CAGRs)

Key drivers for ecommerce in SEAIncome levels – GDP growth

Source: World Bank

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

19

60

19

61

19

62

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06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

GDP per capita ($)

China Indonesia Malaysia Philippines Thailand Vietnam

Rising GDP per capita and income levels across Southeast Asia will spur

domestic retail consumption. Similar to China, most of this will happen via

ecommerce due to lack of offline retail infrastructure.

Key drivers for ecommerce in SEASEA is the only truly “mobile-first” region

Source: Wikipedia, CTIA, Pew Research Center, NBTC, iimedia, ITU

28%34%

44%49%

64%

84%

98%104%

112%

121%

132%

143%

0%

20%

40%

60%

80%

100%

120%

140%

160%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mobile Phone Penetration (# mobile phone subscribers / population)

US China Thailand

Average Thai user has 1.4 mobile phones. Mobile phone penetration rate in

Thailand already exceeds that of developed countries like US and China.

Key drivers for ecommerce in SEAMobile leapfrogging in SEA

Source: Wikipedia, CTIA, Pew Research Center, NBTC, iimedia, ITU, CNNIC, Nielsen, eMarketer, NSO, AIS, dtac, TRUE

Thailand already surpassed US and China in mobile Internet penetration in

less than 1 year after introducing 3G

1%3%

17%

30%

56%

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012 2013

Mobile Internet Penetration (# mobile Internet users / population)

US China Thailand

3G launched in Thailand

Key drivers for ecommerce in SEAHigh mobile Internet penetration driving mobile commerce

Source: Bain & Company

1) Mobile phone usage for shopping and research exceeding that of developed countries in SEA

like Singapore and Malaysia (urban areas)

2) Access to the rural and rapidly emerging consumer base – 85% mobile commerce penetration

in non-urban Thailand; 79% in non-urban Indonesia

Key drivers for ecommerce in SEALazada getting over 50% of traffic from mobile only

Source: Lazada Group Investor Report

Key drivers for ecommerce in SEA“No-Tail” ecosystem

Source: World Bank, Tech in Asia, Techcrunch

Thailand (and rest of SEA ex. Singapore and Malaysia) skipped Web 1.0/1.5 and

leapfrogged straight into Web 2.0. As a result, long-tail content creation nowadays is

mainly happening on closed, social media platforms like Facebook and Instagram

instead of blogs and websites. As a result, we’ll see accelerated development and

proliferance of ecommerce and other non-ad based business models in SEA.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Internet penetration as % of population

US China Thailand Indonesia

US: 30.1%TH: 1.1%ID: 0.3%

US: 61.7%TH: 9.3%ID: 2.4%

US: 75%TH: 20%ID: 5.8%

Web 1.0Homepages

Web 1.5“Self-Publishing/Blogging/UGC”

Web 2.0Social Media

Key drivers for ecommerce in SEA“No-Tail” ecosystem implications

• Relatively simple ad tech environment

• Affiliate marketing still nascent

• Demand-side platform (DSP) market still nascent

• Accelerated development and proliferance of e-commerce and other non-ad based business models

• “Traditional” digital agencies’ scope reduced to executing global contracts and buying offline media (in US, these agencies still have a role to play due to complicated ad tech environment)

Key drivers for ecommerce in SEALogistics under-developed

Source: World Bank Logistics Performance Index 2014

SEA ecommerce growth is highly dependent on fixing logistics and payments

1.77

3

3.08

3.08

3.15

3.43

3.53

3.59

3.92

4

4.12

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Somalia

Philippines

Indonesia

India

Vietnam

Thailand

China

Malaysia

United States

Singapore

Germany

LPI

Key drivers for ecommerce in SEAImport duties and taxes – lack of cross-border ecom (excl. Singapore)

Source: Bain & Company

1) Singapore is the outlier in SEA – majority of transactions are cross-border, not domestic

ecommerce. Cross-border ecommerce driven by zero or low custom duties

2) SEA (excl. Singapore) mainly domestic (local leaders) and fragmented. AEC, while great on

paper, won’t move the needle in intra-SEA cross-border ecommerce

Key drivers for ecommerce in SEAPrivate/direct equity funding

Source: Tech in Asia

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

2015 Asia VC funding by vertical ($billion)

$0

$100

$200

$300

$400

$500

$600

$700

5 top startup investment categories in SEA ($million)

2014 2015$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2010 2011 2012 2013 2014 2015

Tech investments in SEA ($million)

1) Tech investments in SEA on the rise peaking at 1.6 billion in 2015

2) Given hypergrowth projections, majority of Asia and SEA investments going into ecommerce,

with notable names such as Lazada, Tokopedia, and MatahariMall in SEA

Ecommerce in ThailandKey players – Traffic

Source: SimilarWeb Pro; excluding mobile app only ecommerce players e.g. Shopee and Line Shop

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Traffic sessions to top ecommerce sites in Thailand (excluding mobile app only ecommerce players e.g. Shopee and Line Shop)

2015-9 2015-10 2015-11 2015-12 2016-1 2016-2

1) Overall, Lazada leads the pack among all types of ecommerce players

2) Among C2C platforms, Kaidee beats WeLoveShopping and Tarad

3) iTruemart (now WeMall) #2 in B2C but big gap between #1 (Lazada) and #2

4) Zalora biggest loser in terms of traffic loss over the last 6 months

Ecommerce in ThailandKey players – Search interest

Source: Google Trends

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72

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82

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92

01

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-22

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32

01

2-2

42

01

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52

01

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62

01

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20

13

-16

20

13

-27

20

13

-38

20

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20

14

-82

01

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92

01

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02

01

4-4

12

01

4-5

22

01

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12

01

5-2

22

01

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32

01

5-4

42

01

6-3

20

16

-14

Google Search Interest

lazada itruemart tarad kaidee weloveshopping ensogo advice zalora jib shopat7 cdiscount moxy central online

lazadaweloveshopping

ensogo

jibzalora

advice

kaidee

col

itruemartcdiscount shopat7

tarad

moxy

Thailand ecommerce market has become more fragmented with new entrants coming in over time

and challenging incumbents. Based on search interest, Lazada is the clear market leader

Ecommerce in ThailandLazada dominates all ecommerce traffic (34%) and B2C (61%)

Source: Crunchbase, SimilarWeb Pro; excluding mobile app only ecommerce players e.g. Shopee and Line Shop

1%

1%

1%

2%

2%

2%

3%

4%

4%

7%

7%

13%

20%

34%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Moxy.co.th

Cdiscount.co.th

ShopAt7.com

Jib.co.th

Munkonggadget.com

Central.co.th

Zalora.co.th

Advice.co.th

Ensogo.co.th

iTruemart.com

Tarad.com

WeLoveShopping.com

Kaidee.com

Lazada.co.th

% of Total Ecommerce Traffic (excl. Mobile App)

1%

2%

2%

3%

3%

4%

5%

6%

13%

61%

0% 10% 20% 30% 40% 50% 60% 70%

Moxy.co.th

Cdiscount.co.th

ShopAt7.com

Jib.co.th

Munkonggadget.com

Central.co.th

Zalora.co.th

Advice.co.th

iTruemart.com

Lazada.co.th

% of Total B2C Ecommerce Traffic (excl. Mobile App)

Lazada, the Rocket Internet-backed venture, has leveraged it’s first mover advantage

and $710 million war chest to propel itself to a #1 position in Thailand

Ecommerce in ThailandWhat do people buy online?

Source: ecommerceIQ

91% 84%70% 68% 63% 57% 53%

42%

9% 16%30% 32% 37% 43% 47%

58%

0%

20%

40%

60%

80%

100%

120%

Home & Living Automotive Food &Beverage

Electronics Books Health &Beauty

Fashion &Apparel

Travel Services

Online shopping categories bought in-store vs. online

In-Store Online

1) Home & Living, Automotive and Food & Beverage are Top 3 for In-Store purchase

2) Typically, in early stages of ecommerce development consumers buy commodities (i.e. products easily

comparable such as mobile phones and electronics) and low price-point items such as fashion & apparel.

China went through the same phases and Thailand is going through the same now

3) Home & Living, despite online supply from players like Index and SB Furniture, struggles with the complexities

of fulfillment and logistics due to its bulky and heavy product nature

Ecommerce in ThailandWhy do people buy online?

Source: ecommerceIQ, Bain & Company

1) Convenience & choice are key driving forces for Thai online shoppers

2) “Not a price war: Choice and convenience matter” (Bain & Company: Can Southeast Asia Live

Up to Its E-commerce Potential?)

38%

28%

22%

12%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Convenience Selection Price I don't shop online

Top reasons why people buy online in Thailand (% of survey respondents)

Ecommerce in ThailandSocial commerce (unique to SEA excl. SG and MY)

Source: ecommerceIQ

1%

2%

5%

6%

6%

7%

16%

16%

19%

23%

Cdiscount

Moxy

Central Online

Zalora

Rakuten

Other (please specify)

Lazada

LINE

Instagram

Facebook

% of total responses

Buying and selling on social media platforms is big in Thailand. Based on a survey

done in Bangkok by ecommerceIQ, 48% of respondents indicated to have purchased

something on Facebook, Instagram, and LINE in the last 3 months.

Ecommerce in Thailand1/3 of Thailand ecommerce GMV estimated from social platforms

Source: AT Kearney, Tech in Asia, aCommerce internal data

Lazada isn’t Thailand’s biggest ecommerce platform; Facebook and Instagram are.

An estimated 1/3 of total Thailand ecommerce GMV comes from transactions on

“shadow marketplaces” – Instagram, Facebook, and LINE


Visit Instagram shop Browse products Inquire about product via LINE


Get payment details Confirm payment Ship & track order

Ecommerce in ThailandLINE jumping on the social commerce bandwagon

LINE launched its Flash Sale product in Q4, 2013, its first B2C ecommerce pilot globally due to the

popularity of LINE and social commerce in general in Thailand. LINE partnered with aCommerce

for this project and sold a variety of products from L’Oreal cosmetics to LINE merchandise to

offline vouchers.

Source: Tech in Asia, LINE, aCommerce

Ecommerce in ThailandLINE jumping on the social commerce bandwagon

Following up on its Flash Sale success, LINE launched a grocery shopping and

delivery project, partnering up with aCommerce again for fulfillment and logistics.

Source: Techcrunch

Ecommerce in ThailandA peek into the future – Thai college student’s homescreen

1) No commerce apps – all buying and selling done inside Instagram, Facebook, and LINE

2) No Google apps – direct discovery through apps; less searching on mobile (web)

Future of Ecommerce in ThailandStages of development for ecommerce

Source: ChannelAdvisor, aCommerce

Classifieds

US:Craigslist

China:Ganji, 58

Thailand:OLX/Kaidee

C2C

US:eBay

China:Taobao

Thailand:Tarad, WeLoveShopping, Shopee, LINE Shop

B2C

US:Amazon (41%), Shopbop

China:JD.com

Thailand:iTruemart, Central Online, Cdiscount, Sephora, Lazada (30%), Zalora

B2B2C

US:Amazon (59%)

China:Tmall (100%), JD

Thailand:Lazada (70%)

Brand.com

US:Estee Lauder, Dell, Nike, Under Armour

China:Lancome, Estee Lauder, Dell, Nike

Thailand:Maybelline, Kiehl’s, Estee Lauder, Adidas

1) All markets typically go through the same stages of ecommerce development, moving from classifieds to C2C to B2B2C and brand.com. The

difference between Thailand (and SEA) vs. mature ecommerce markets like US and China is that the timeline is much more compressed here

i.e. everything is happening in a much shorter period (and sometimes all at once)

2) Being a truly mobile-first market, traditional business models are moving much faster to mobile. For example, Shopee, a mobile-only C2C

marketplace by Garena is rapidly eclipsing traditional desktop C2C platforms like Tarad and WeLoveShopping.

3) In China, brands progressed from selling via Tmall as a stepping stone towards operating their own brand.com site. In Thailand, we see

brands doing both at the same time, selling via Lazada as well as their brand.com stores. This is driven by technology making it much easier

to sell through different channels but also by the high degree of fragmentation in the ecommerce market (consolidation happening soon

though).

4) Other leapfrogging happening is the accelerated move towards B2B2C (3P vs. 1P) with Lazada getting over 70% of GMV from third-party

marketplace sellers vs. Amazon’s 59%

Future of Ecommerce in ThailandStages of development for ecommerce – Ecommerce 1.0 vs. 2.0

Source: https://medium.com/@dunn/e-commerce-is-a-bear-d233f02d52a5#.3nbomul3e

Andy Dunn, Founder & Chairman of Bonobos.com:

On Ecommerce 1.0:

“If you’re selling other people’s brands, you are competing not via a local group of competitors but with

everyone. In this type of market, you might imagine having one large national winner. You might imagine that

winner is ruthless about scale and cost, and is run by a visionary leader who with an extreme long-term

focus. Such a company might not make real money for a long time —but when it does — it will be incredibly

powerful.”

On Ecommerce 2.0:

“When I got to New York in 2007 as founding CEO of Bonobos, many people asked me if I’d heard of Gilt

Groupe. I said no. Next thing I knew they had five hundred employees. Their rise is well documented as

they’re one of the largest e-commerce 2.0 players in the US.”

Future of Ecommerce in ThailandEcommerce 1.0

Competitive advantage:

• Economies of scale

• Long-term focus (losses

in short-term)

• Acquire competitors that

are a threat

• Exceptional loyalty

program to lock

customers in

• Deep pockets / lots of

funding

Future of Ecommerce in ThailandEcommerce 2.0

Competitive advantage:

• Proprietary pricing

• Proprietary selection

• Proprietary experience

• Proprietary merchandise

Future of Ecommerce in ThailandEcommerce 2.0 in Thailand & Indonesia – Proprietary Merchandise


0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2015-9 2015-10 2015-11 2015-12 2016-1 2016-2

Traffic sessions to Pomelo Fashion

Founded by the ex-Thailand Lazada founding team, Pomelo Fashion is one of the first “Ecommerce 2.0”

companies in Southeast Asia. Rather than selling other brands’ products with low margins, Pomelo Fashion

has taken a M2C/D2C (Manufacture/Direct-to-Consumer) approach, focusing on building its own fashion

brand and vertically integrating its supply chain, going as far as manufacturing its own clothing and apparel.

Future of Ecommerce in ThailandEcommerce 2.0 in Thailand & Indonesia – Proprietary Merchandise

Inspired by Warby Parker’s success in the US, Glazziq.com and FrancNobel.com are applying the

proprietary merchandise model in the eyewear space in Thailand and Indonesia, respectively. Glazziq

adds a local spin by positioning itself as prescription eyewear for Asians.

Future of Ecommerce in ThailandEcommerce 2.0 in Thailand – Proprietary Selection

Motif Official is a fashion retailer based in Bangkok focusing on proprietary merchandise and selection.

Their ‘Motif Official’ label is designed and manufactured in-house. For their ‘Motif Select’ range, they select

and curate minimalist brands from across the world. Motif’s ecommerce strategy eerily resembles that of

Nasty Gal in the US, where founder Sophia Amoruso started the business in 2006 by curating vintage

clothing sourced from second hand stores.

Following pure play ecommerce companies in the US like Warby Parker and Birchbox who went offline to

augment their brand, Motif also operates physical stores in Central World and Siam Discovery in the heart

of Bangkok.

Future of Ecommerce in SEAEcom 2.0 still early in SEA, but it WILL happen

Source: SimilarWeb Pro; Note: Groupon and Ensogo both shut down or sold in SEA

Global SEA

Ecom 1.0 (generic) Amazon, Tmall, JD.com Lazada, MatahariMall,

Central.co.th, iTruemart,

Cdiscount, Sephora, Shopee,

Line Shop

Ecom 1.0 (mid- high-end

fashion)

Shopbop, ASOS Zalora

Ecom 2.0:

Proprietary pricing Gilt, Zulily, One King’s Lane,

Ideeli, Mogujie

Ensogo, Groupon

Proprietary selection ModCloth, Nastygal Motif Official, Orami (Moxy)

Proprietary experience Birchbox, ShoeDazzle

Proprietary merchandise Bonobos, Warby Parker,

Dollar Shave Club

Pomelo Fashion, Glazziq,

Franc Nobel, Sale Stock

Future of Ecommerce in Thailand2016-2020 predictions

Source: Techcrunch, Tech in Asia

Prediction Why? Examples / Pioneers

1. Brand.com Is Poised To Be The New Black

The evolution of e-commerce commonly follows the trajectory of P2P and C2C to B2C to eventually Brand.com. The U.S. went from Craigslist and eBay to Amazon to brand sites like Nike, J.Crew and Gap. China went from Taobao to Tmall and JD to the many standalone and marketplace brand sites, like Estee Lauder, Burberry and Coach. Today’s Southeast Asia is following a similar pattern, yet at a much faster pace due to “1 to n,” horizontal progress and the resulting leapfrogging behavior. In our region, we have P2P (OLX), C2C (Rakuten, Tokopedia, Shopee), B2C (Lazada, Zalora, MatahariMall) and Brand.com (L’Oreal, Estee Lauder) all happening at once within a very short time frame.

Estee Lauder, L’Oreal, Adidas

2. Omni-Channel Awakens: “There Will Be No More E-Commerce, Only Commerce”

Traditional offline retailers like Central and Big C have a leg up vs. ecommerce pure players due to the existing offline footprint alreadyavailable. These assets can be used for O2O commerce e.g. pick up in store, pay in store, order in store/delivery at home, etc. Also, having this infrastructure enables these players to fulfill and deliver much faster than pure players as stores are the new fulfilment centers.

Central Online, Big C, MatahariMall(Indonesia), Nguyen Kim (Vietnam)

3. Niche-Commerce Models Will Evolve To Avoid The B2C Bloodbath

With B2C ecommerce being a winner-takes-all game, new entrants looking for opportunities will have to find them in emerging Ecommerce 2.0 models.

Pomelo Fashion, Sale Stock Indonesia (Indonesia)

4. Cross-Border E-Commerce Will Be Driven By Silk Road 2.0, Not AEC

Despite all the media hype and lofty expectations, the ASEAN Economic Community (AEC) will not have a significant impact on e-commerce in 2016.

Governments are too fragmented on policy; coupled with the immediate growth opportunity within the domestic markets, it doesn’t make sense to focus on cross-border within ASEAN, as evidenced by companies such as Lazada and MatahariMall doubling-down on Indonesia’s e-commerce opportunity.

Cross-border e-commerce in 2016 will be driven mainly by what we call “Silk Road 2.0.” These are Greater China-based companies that will bring their products into Southeast Asia, laying the foundation for our generation’s version of the Silk Road and attempting to expand China’s soft power and hegemony through commerce and digital.

Alibaba, JD, merchants selling on Facebook and Instagram who source their products from China

5. Payments: COD Will Continue Its Reign While Third-Party Payments Struggle

The next double-digit billion dollar opportunity in Southeast Asia e-commerce is the third-party online payment space. US has PayPal and China has AliPay; what does Southeast Asia have?

Contrary to what many people believe, building a successful payment product isn’t about technology, it’s about distribution. Payment technology is a commodity; everyone’s building the same thing, including banks (SCB UP2ME), telcos (TrueMoney, PAYSBUY), media (LINE Pay, AirPay by Garena), retailers (helloPay by Lazada) and payment-focused startups (2C2P, Omise).

The hard part is distribution. How do you reach critical mass in order to cruise off network effects? Until this happens, COD will remain the dominant payment method in Southeast Asia. Based on aCommerce’s latest aggregated numbers, COD made up 74 percent of transactions in Southeast Asia, up from 53 percent the year prior. This validates the importance of COD to e-commerce in our region, and already exceeds the COD penetration rate at the height of its popularity in China back in 2008.

Eventually, COD will naturally reach its shelf life and be replaced by a “modern” third-party online payment product. Even then, the most likely scenario will be one leading payment product per country in Southeast Asia due to the region being fragmented.

Lazada, aCommerce

6. The Fizzle Of Fast Fashion E-Tailers We’ll see mass, fast-fashion players like Zalora struggle and either fizzle out or be rolled into cousin Lazada. People familiar with the history of e-commerce in China will see similarities between Zalora and VANCL. VANCL, a mono-brand fast-fashion retailer founded by Chen Nian (who sold his previous business, Joyo, to Amazon), rose to prominence in 2009, raised up to $570 million and even planned for an IPO, but then gradually faded away. Selling your own fashion products is less about retail economics and much more about brand building.

In addition, VANCL suffered from competition from Taobao merchants who sold similar products for higher quality at lower prices. Replace Taobao with Instagram and Facebook and you’ll understand the pain that Zalora and other mono-brand, mass-fashion retailers are going through in Southeast Asia.

Zalora


Source: Techcrunch, Tech in Asia, Business of Fashion


7. New Channels Will Emerge To Challenge Google And Facebook’s Dark Side

Unfortunately for e-commerce players in our market, the range of channels available is quite limited due to historical and socio-economic factors unique to Southeast Asia. The appearance of a “no-tail” landscape in terms of publishers severely hampers the effectiveness of traditional tools, such as affiliate marketing and programmatic display.

In Southeast Asia, players are already exhausting the “usual suspect” channels, such as Google Search, Facebook and Criteo, with the result being CPCs rising to all-time highs and companies tapping into offline marketing to seek better returns. This is Andrew Chen’s “Law of Shitty Clickthroughs” in full effect.

Companies and savvy entrepreneurs will start addressing this gap by designing and building new demand-generation platforms to offer an alternative to the Googles and Facebooks out there. Expect to see more e-commerce firms adding channels such as price comparison, coupon sites and cash-back sites, as well as innovative affiliate marketing solutions to balance their media mix.

Priceza, ShopSmart, Shopback

8.The Battle For The Last Mile Continues As 3PLs Fail To Adapt

Companies like Lazada (LEX), MatahariMall and aCommerce are investing in building out their own delivery fleet in order to help relieve the industry-wide capacity issues and serve the anticipated record-breaking transaction volume. The pressure will only become bigger in 2016 as transaction volume is expected to hit record highs in Southeast Asia.

Challenges with last-mile delivery in Southeast Asia, if not addressed properly, will become the biggest bottleneck to e-commerce growth in the region. The industry is currently witnessing industry-wide capacity bottlenecks beyond what the JNEs, Kerry Logistics and DHLs of this world are able to handle.

Part of this is the poor infrastructure to begin with. China, the world’s largest e-commerce market, never really had this issue because of the socialist and central government mindset of prioritizing infrastructure investments. By the time e-commerce took off, the infrastructure was already there, which resulted in last-mile delivery becoming a commodity service.

Also, many existing delivery companies were never built for B2C deliveries to begin with. Their core competencies are in B2B deliveries, which typically don’t face B2C headaches, like returns management, reverse logistics, pre-calling, multiple delivery attempts and cash on delivery.

Lazada Express, aCommerce, MatahariMall (Indonesia)

9. Channel Management Will Be The New “Programmatic” Ad Agencies Still Stuck In 2011

The real “programmatic” opportunity in Southeast Asia will be in e-commerce, not in display advertising. With the advent and fragmentation of online marketplaces, the challenge for brands will be to choose on which channels to be present and what products to push in each of these channels.

Business of Fashion predicts a near future where the retailer/vendor relationship will begin to look a lot more like a media buy than the wholesale product purchase agreement of today. Physical stores have the potential to be the most powerful and effective form of media available to a brand because it offers an experience, which if crafted properly, cannot be replicated online.

Branch8, aCommerce

10. The Talent War Will Inflate Salaries Faster Than Uber’s Valuation

One of the biggest issues faced by all e-commerce players in Southeast Asia is the lack of talent. In 2015, it was common to see employees being poached left and right with new salaries of 1.5-3x. Obviously, this isn’t sustainable, but it is the current foundation of the talent war in Southeast Asia.


Source: Techcrunch, Tech in Asia


11. B2C Bloodbath Will Drive Consolidation

Retail B2C is a winner-takes-all market. Players with the most long-term view and deepest pockets will survive. In US and China, B2C ecommerce has boiled down to a 1-2 player game (Amazon, JD, Tmall). SEA and Thailand are still fragmented but we’ll expect to see 1-2 clear leaders to emerge over the next five years as funding runs out for B2C and investors will look for returns, not growth.

• WhatsNew (Petloft, Venbi, Sanoga, Lafema) acquiring Moxy

• Moxy merging with Indonesia’s Bilna to become Orami

• Cdiscount sold to BJC (Asiabooks, Berlivery)

• Zalora Thailand and Vietnam sold to Thailand’s Central Group

12. C2C game will shift towards mobile, leaving behind traditional C2C platforms

Traditional C2C platforms like Tarad and WeLoveShopping have been running out of steam as they missed the shift towards mobile. With an estimated 1/3 of total Thailand ecommerce GMV happening on Instagram and Facebook, and supported by LINE messaging, Thai users have become accustomed to buying and selling on mobile. Mobile-only C2C platforms like Shopee and Line Shop have leveraged this opportunity to stake their claims and take C2C marketshare away from the desktop only platforms.

Shopee, Line Shop, Carousell (Singapore, Indonesia)

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Email: [email protected]: +66 9 2596 5656Skype: sheji_ho

Address: 33rd Floor, 689 Bhiraj TowerSukhumvit Road, Bangkok 10110, Thailand

Sheji HoGroup CMO

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