Digital Innovations in Asia Looking back, looking ahead Mark Inkster Chief Digital Officer Aegon Asia Singapore, 7 November 2014 Asia Distribution Conference
Jul 12, 2015
Digital Innovations in Asia Looking back, looking ahead
Mark Inkster
Chief Digital Officer
Aegon Asia
Singapore, 7 November 2014
Asia Distribution Conference
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The Asian Internet landscape was vastly different from today
In 2000, Asia had less than 1/3 of the world’s users
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The largest number was in Japan
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The number of users has grown exponentially. Now nearly half the world’s Internet users are in Asia, mostly in China and India.
Since then, the Internet has exploded in Asia
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Japan 1999: very heavy use of message boards / forums
Korea 2002: cafes, avatars, knowledge search
► Emergence of Naver and Daum as leaders
China 2005: ubiquitous message boards; QQ growing from IM to a social portal
Southeast Asia 2008: MSN, Y! Messenger, Friendster
Today
► India & Indonesia #2&4 countries in the world for Facebook, and in top 5 for Twitter
► Indonesia global #1 in terms of Twitter penetration of total iPhone users
Social media has often been the starting point, with local innovations
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Situation
► Relatively low amount of Korean language content to index
► “Netizen” culture of user-generated content
► Naver looking for a competitive edge
Solution
► Naver launched “Knowledge Search” and got rapid traction
• Users asked questions
• Community provided answers
• Community up-voted best answers
• Points awarded for asking questions, answering questions, having best answers, etc.
• Daum and Yahoo! rapidly copied
• Yahoo! rolled out to Taiwan and Japan, then US and rest of world
Case study: Knowledge Search
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Japan
► Yahoo! Auctions; Rakuten; Amazon
Korea
► eBay; Gmarket; Coupang
India
► eBay; MakeMyTrip; Flipkart; Amazon; JustDial (local)
China
► Early battles around C2C ~2000-2005, now dominated by Alibaba / Taobao
► C-Trip dominates travel
► Baidu does not play the same role in commerce that Google does
E-commerce has evolved very differently on a market-by-market basis
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eBay acquired Chinese online auction leader Eachnet in 2002 / 2003
Alibaba, which had a B2B offering, entered the C2C space with Taobao in 2004
Taobao innovated and localized very intelligently
► Streamlined design / user experience
► No listing fees – helped create critical mass of sellers
► Enabled buyer-seller direct communication through IM tool (Wang-wang)
► Built “escrow-style” payment system (Alipay)
► Employed low-cost students to migrate sellers’ listings from eBay / Eachnet
► Found marketing channels not covered by eBay
Case study: eBay versus Taobao
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Goal was to build an online travel agency, but users and infrastructure were not
ready
Started with membership cards, call center, web site
Added travel guides and reviews
Set up physical desks at airports
Over time, traffic shifted from call-center to web / mobile
Case study: Ctrip
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Nearly half of the top 20 Internet
companies (by market value) are
based in Asia
Most others have large Asia
operations
Note that none are from Europe
10-20% of global venture capital
goes into Asian companies
Innovation has created value
Source: Statista.com Note: Alibaba IPO’d in September 2014; Market cap 6-Nov $270B
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Internet users will continue to grow
quickly in many countries with low
Internet penetration
South Asia and Southeast Asia
likely to have the fastest growth
But still room for growth in East
Asia
This will drive continuing
“Internet booms” as countries
go through predictable cycles
E-commerce generally grows at
a lag behind Internet growth
Most Internet user growth will come from Asia
Source: Statista.com
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Relatively self-contained ecosystems in China, Japan and Korea
Australia tightly integrated with the global system
India big enough that there will be local giants, but integrated enough with the
global Internet system that some global players will also win
Southeast Asia will be a mix of local, regional and global winners
Asia will evolve along different paths than the US or Europe have taken
► Mobile-centric
► More online/offline combined models, especially in emerging markets
► Skipping generations (e.g., Facebook instead of message boards)
The Internet will continue to be complex in Asia
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Lesson one: innovate in Asia
► Asia is big enough and different enough that models will develop in Asia that differ from
the ones in the US or Europe
Lesson two: significant localization will be required – from global systems and
also country-by-country
► The models and the ecosystems will be different across countries, especially China /
Japan / Korea
Lesson three: plan for growth
► The Internet user “S-curve” is still steep in places like India and Indonesia
► E-commerce lags Internet user growth, so another “S-curve” is likely
What does all of this mean for the life insurance industry?