$300 Billion by 2025. Southeast Asia’s Internet Economy. Victorian eCommerce Network 26 August 2020
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
$300 Billion by 2025. Southeast Asia’s Internet Economy.
Victorian eCommerce Network
26 August 2020
Overview of Southeast Asia
11 countries
World’s
5th largest economy
Victoria’s
2nd largest trading partner
660 million people
5 FTAs with Australia
Middle class to grow
3x by 2030
Global Victoria’s Southeast Asia Team
Leigh HowardA/g Commissioner to South East Asia
A Growing e-Conomy
Note: Figures refer to gross merchandise value in USD
Source: Google & Temasek/Bain, e-Conomy SEA 2019
$300 Billion by 2025. Southeast Asia’s Internet Economy.
Hans-Peter Ressel, August 26th 2020
SEA internet economy hits $100 bn - $300 bn in 2025
SEA Internet economy breakdown
• ID is the largest e-Commerce market in SEA, growing 12x in the last 4 years, driven by competition between local and regional players
• Growth of e-Commerce is powered by fundamental changes in consumer behaviour and platform investments in shopping festivals, in-app entertainment, seller development and logistics infrastructure
Source: Google/Temasek/Bain e-Conomy SEA 2019
• e-Commerce already accounts for 38% of the SEA Internet economy and has overtaken Online Travel; further increase to 51% by 2025
• Active e-Commerce users have increased from 49m in 2015 to 150m in 2019
SEA e-Commerce market
Southeast Asia - 4th largest trade bloc by 2030
SEA macro numbers
• GDP growth in SEA has consistently outpaced the world GDP growth by c.a. 2pp since 2010
• This growth reflects strongly in the internet economy even when compared against stalwarts like the US and China
• The solid user base will continue to grow strongly. A young and growing population, with e-commerce users growing 3x since 2015, and almost 30% of the population is < 15 years old
• Although Indonesia and Vietnam are particular standouts with CAGR 38~49% from 2015 –2019, the other SEA countries are still performing strongly with 17~32% CAGR
• All trends point towards a continued fast SEA internet economy growth pace
Source: Google/Temasek/Bain e-Conomy SEA 2019
Ecommerce in Malaysia (1/2)
Malaysia - Overview
• Low market entry barriers for foreign companies and investors in most industry sectors
• Min. paid up capital RM 1; much higher for certain industries and if work permits have to be given out
• 24% corporate tax rate; 0% capital gains tax• EUR 900 avg. monthly salary, EUR 550 for fresh graduates; strong
talent pool with high share of international education
• Malaysia has a very diverse population of 32m people and a 11bn USD internet economy (>2x vs. 2015) which is expected to hit 26bn USD by 2025
• B2C E-Commerce market size was 3bn USD in 2019 (3x vs. 2015) and is expected to hit 11bn USD by the year 2025
• Metropolitan areas in Klang Valley, Penang and Johor Bahru account for >65% of the E-commerce volumes, East Malaysia still under-indexed
Doing Business in Malaysia
Regional Hub: KLIA Aeropolis, total of 8,548 acres
• In 2017, Alibaba Group set up their first DFTZ (Digital Free Trade Zone) outside of China in Malaysia at KLIA Aeropolis (eCom park, logistics park, etc.)
• Port Klang amongst the top 15 global container ports• Almost 1m annual cargo tonnes and 50% increase expected in the next 10 years• 20 out of top 25 freight forwarders with a base in MY• Big cross-border market with ca. 50% of the E-Commerce volumes being sourced from China
Market Environment
Ecommerce in Malaysia (2/2)
Cross-border Logistics Current Developments during Covid-19
• Very strict MCO in multiple waves so far, with limited mobility (<10km away from home) and strong enforcement by army and policy in the beginning
• MCO starting to be lifted from May 4th onwards almost across all industries with strict SOP’s in place
• E-Commerce volumes doubled in April 2020 compared to January 2020 with strong demand surge for personal care / FMCG products & food deliveries
• In general different duties & taxes based on HS code• De minimis rate (price threshold below which no taxes are charged) is
RM 500 / EUR 106 for B2C air freight• Above RM 500: SST 5-10%, Import duties 0-25%• For products on prohibited / restricted list, addtl. permits, documents
and licenses may be required• Very strict regulation on food & fashion products to be “halal” due to
predominantly muslim population
• Local E-Commerce is very fragmented, yet with only a handful of dominant players
• Fashion, Home & Living & FMCG biggest categories in terms of volumes; Electronics in terms of revenues
• Internet penetration of 81%, thereof 80% with E-commerce shopping experience• Only 3m unbanked people; still 9m underbanked
Complex entry barriers for SMEs to enter SEA
Market entry models
• Southeast Asia (SEA) is one of the fastest growing consumer markets in the world. Brands & SMEs must participate in the SEA economy to continue to grow and capture new consumers
• Traditional go-to-market routes are too costly & too slow ⇒ B2C Crossborder has the lowest entry barriers but can be complex
Both platforms and logistics players operate a regional network that enables regional presence
Regional fulfilment solution - *Example*
● >4m sqft storage space
● >100k daily in- /outbound capacity
● AEO (Authorized Economic
Operator) and PBWH (Public
Bonded Warehouse) licences allow
for fast clearance & reduce tax
burden
● 99% same day processing of
customer orders and returns
B2C ‘Brand E-commerce’ is the dominant mode in a maturing & more sophisticated E-commerce market
E-commerce market segmentation
• Across SEA, E-commerce consumer interest for brands has grown fast, supported by promotional activities and co-marketing investments by brands
• While consumers enjoy high quality and authenticity of products, brand E-commerce also allows enables brands to engage directly with their consumers
Brand control
B2C
C2COfficial Brand.com platforms
Official marketplace
stores
Direct sales platforms
Classifieds
Brand challenges
× Limited brand control
× Lack of E-commerce expertise within own organization
× No direct customer relationships and lack of access to data
× High complexity due to multiple marketplaces/platforms and service providers in each market country
× Complex local regulation and localization requirements
× Lack of E-commerce talent in all markets
✓ Full brand control over assortment, pricing, merchandising, branding and customer experience
✓ Operational model that covers all aspects across the entire value chain to facilitate E-commerce the operations of online business activities
✓ Full access to customer data and ability to engage directly with own customers
✓ Integrated technology solutions across all channels, platforms, service providers and markets
B2C
Online stores of offline
distributors
Brand E-commerce
Key success factors
Complex & fragmented SEA e-Commerce landscape
Top 10 Total Monthly Average Visits (Desktop/Mobile) in Q1’19 (Source: iPrice Map Q1 2019)
• Multiple platform leaders in the market• Different stages of e-commerce evolution in different countries from C2C to B2B to more Brand focused • Vertical based sites (beauty, fashion only) vs general merchandise sites for all categories
Fragmented end-to-end service landscape
Malaysia eCommerce Landscape 2020 (Source: ECInsider)
• As most platforms run lean operations, there is no single one stop solution to address the entire market• Up to 30 different types of service providers for managing sales channels, marketing, branding, logistics, warehousing and delivery• Selling successfully across SEA requires SMEs to manage many different stakeholders in multiple countries
Momentum provides end-to-end services & solutions that create a bridge between brands and consumers
End-to-end solutions across e-Commerce value chain and multiple channels
Global household names are showing interest in SEA
$300 Billion by 2025: Southeast Asia’s Internet Economy
Cross Border Omnichannel FulfillmentAug 26 ,2020
Mr. David Wong Nan Fay
ASOCIO ChairmanChairman of SnT Global
Executive Committee MABC
Company Overview – SnT Global
Top 500 Deloitte Fastest Growing ICT
and Services companies in Asia
Pacific
Multi Super Corridor Status (MSC) in 2000
Winner of PIKOM-
CompuTimes IT Awards
Best Internet Application
MERIT Award at Asia Pacific ICT Awards for
Best of Business Application (Non-
Financial)
Awarded Grant for Asian E fulfilment Hub Set Up on 18th
Feb 2014
Awarded Integrated Logistics Status (ILS)
from Apr 2013 to 2018
➢ Established in year 2005
➢ Offices: Malaysia and Singapore
➢ Omnichannel Fulfillment – Warehousing and Fulfillment, Distribution and Cross Border Management
➢ Industry Focus – Retail , eCommerce , FMCG, Pharmacies and Beauty/Cosmetics
➢ Technology-focused
The Brand Laureate ICON of the Decade
Award
Malaysian Retail Chain Association (MRCA)
best CEO Award
Omnichannel – Market Analysis
• Pure e-commerce players are moving into brick and mortars and vice versa
• New Retail:Pure eCommerce will be reduced to a traditional business and replaced by the concept of New Retail – the integration of online , offline , logistics and data across a single value chain- Jack Ma
• Estimated New Retail Market Size by 2023Potential GMV size for Asia excluding China could be $16B15% 30% 55%
Pure EC Retail
New Retail Offline
Provide value added services such as kitting
and packing
Inter-retail store transfer
In-store pick up and easy returns
Transport Management System for tracking
capabilities
Omnichannel Fulfillment
CROSS BORDER FULFILLMENT
LOCALISED FULFILLMENT ( CENTRALISED VS MULTI LOCATION)
Southeast Asia Fulfillment
Summary
Business Model
Target
Fulfillment Strategy
Digital Strategy and Enablement
• Traditional B2B , B2B2C or B2C
• Decide where to focus (country, customer segment, value chain) taking into account market growth, competition and cost to deliver
• Source Strategic Partner- Cross Border Fulfillment, Centralised vs Multi Location Fulfillment Hubs
• Digital Strategy and Capabilities to support End to end Omnichannel Sales and Fulfillment including Return Management
Eating Better Together
eCommerce Journey
Eating Better Together
Humble beginnings; Big vision
This is a story of three young women who met in Kuala
Lumpur from different walks of life (catering,
consulting, startups).
Amazin’ Graze started in our home kitchen with the
goal to create the best tasting local snacks that are
actually good for you.
Amazin’ Graze was created by 3 young women
Eating Better Together
We create products that people love!
Our online store is our strongest sales channel
65% Generate 65% of total online revenue
5% Conversion RateHigher than industry average
A$40 Average Basket Size
Eating Better Together
Our 4-Step Digital Strategy
Awareness
Goal: Notice the
brand/products
Consideration
Goal: Click to view
website & Sign up for
newsletter
Purchase
Goal: Purchase
Retention
Goal: Repurchase
Eating Better Together
Our MY/SG eComm performance
Shopee SGLazada MY#1 in Cereal Category
Eating Better Together
Our MY eCommerce performance
Avg ROS: 250 units/SKU
Eating Better Together
Connecting with our customers
10 IGLive on AG’s Instagram
3 IGlive partnered with local brands on other’s platform
Leigh HowardA/g Commissioner to Southeast Asia
Global Victoria
Q&A
Related Documents
