The ASEAN ecommerce Inflection Year 2015  is a report by aCommerce Founder and Group CEO Paul Srivorakul that includes details and demographics about the ASEAN market and  consumer behavior. It provides a much needed window into the fragmented ecosystem of ASEAN ecommerce. As we stand in 2016, the  landscape has remained consistent with insights from this report. Here’s what we think you’d like to know:

Thailand’s Consumer Demographic

Thailand's Consumer Demographic

Thailand’s Consumer Demographic

Indonesia’s Consumer Demographic

Indonesian ecommerce demographic

Indonesian ecommerce demographic

Retailers should not just focus on millennials

  • As consumers age, online prominence also increases
  • Focus on Customer Lifetime Value at the earliest stage, even at 65+
  • SEA online shoppers are driven by deals and promotions

ecommerce payment trends

  • Cash on Delivery (COD) & Card-Swipe-On-Delivery (CSOD) will grow
  • Over the next 5 years, 65% of transactions will start online and finish offline

Challenges for Retail players

  • Sales cannibalization of offline operations
  • Discounted prices and margin pressure
  • Overstated Offline store-opening opportunities
  • Profit focus can be a disadvantage

And lastly, some predictions for the next 5 years…

ASEAN ecommerce, ecommerceIQ, eIQ

ASEAN ecommerce predictions for the next 5 years

To access the full report, click here.

Innovation and Disruption: Industry experts weigh in on what it means

For those working in ecommerce, or are followers of tech related news, seemingly abstract buzzwords such as ‘innovation’ and ‘disruption’ often come up in research articles or in speeches. This article weighs in on what ‘innovation’ really means in relation to retail. Although peppered with US retail references, a lot of the content can be transferred to the Southeast Asian retail commerce landscape as well.  Read more

The Wall Street Journal recently published an opinion article on the fragmented boom of Southeast Asian ecommerce. There has been a recent influx in opinions regarding the setbacks that the region has experienced due to the fragmentation of our landscape, but this has not hindered the growth of the online retail market.

With the recent acquiring of Lazada in Thailand by Alibaba, JD.com’s entry into Indonesia and investments in Tokopedia, Indonesia’s biggest online marketplace, the list keeps growing.

However, Southeast Asia’s online retail penetration level is only at 3%, representing $6 billion in sales. Comparisons keep being made to the US and China, but Southeast Asia is made up of very different smaller countries and is in a league of its own. Read more

WeChat is struggling in countries beyond China. Despite global ambitions since 2013, investing in big scale marketing strategies such as signing up soccer star Lionel Messi and infiltrating India, and differentiating themselves from Whatsapp, the global push has not amounted to much.

“The network effects of chat apps like WhatsApp and WeChat is what drives adoption; if your friends are users of a particular chat client, you’re more likely to use that client to stay in touch with them,” says Sarah Matthews, associate content marketing manager at US-based Jana, makers of an Android app store aimed at emerging markets.

This means that in Thailand, the majority of people use LINE and Whatsapp, and BBM one of the most popular chat apps in Indonesia. What also hinders Wechat’s growth is ‘The Facebook Trifecta’, consisting of Whatsapp, Facebook and Facebook Messenger. This applies to India, as they are the top picks for communication methods right now. Wechat is also trailing behind The Facebook Trifecta in Hong Kong, Singapore, Philippines and Mexico, all the countries Wechat was aiming at.

They have to go back to the drawing board to figure out the next step for global expansion, if the trifecta can be beaten, that is.

Read the full article from Techinasia here

Southeast Asia’s internet economy is expected to grow to $200B by 2025, according to a new report by Google and Singaporean sovereign wealth fund Temasek. The report focuses on the $200 billion digital opportunity in Southeast Asia. Cultivating from 4 independent data sources, the two companies identified expected values  of different start-ups and sectors, and made calculated predictions about challenges in the ecosystem. Read on for key takeaways:

e-conomy prediction for 2025

e-conomy prediction for 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key Takeaways

  • Southeast Asia to be the fastest growing internet market in the world. With 480m users by 2020
  • Indonesia is the fastest growing nation in the world
  • Southeast Asia’s internet economy is ready to take off: 124k users coming online every day for the next 5 years
  • Southeast Asia currently houses 700m Mobile connections. This makes up 130% of the population
  • The ecommerce market is split into two key segments: First- hand goods and Second-hand goods (See figure 2)
figure two: ecommerce segments

Figure 2: Ecommerce segments

  • Investment flow is growing, but activity is concentrated to Singapore and Indonesia, with the majority of funding going to a few prominent startups.
  • A total of $40-$50B of investments must be injected over the next 10 years to make Southeast Asia a $200B internet economy in 2025.
  • Investment levels in India are higher than Southeast Asia. SEA had a GDP of $2.4T while India had $2.1T in 2014, it received less than a fifth of the funding.
  • Southeast Asia will face four key challenges (See figure 3).
ecommerce challenges for the region

Figure 3: Ecommerce challenges for the region

To access the whole report, click here

 

 

The 2016 A.T. Kearney Achieving Excellence in Retail Operations (AERO) study explores the pros and cons of store operations in the digital era, as retailers focus on Omnichannel strategy with a move towards ‘Bricks and Clicks’.  In an age where retailers are are revolutionizing themselves to meet more fragmented consumer demands, integration with technology becomes investment priority. However, this does not mean that the human aspect of the retail industry should be left behind…

Here are the key findings:

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Figure one: Consumer feedback on social media impact and social media usage

Fulfillment

  • 24% of people are happy with three-day shipping for ecommerce
  • 42% of people consider ‘delivery made during promised window’ more important than fast shipping

Technology

  • 60% of retailers admit that their companies struggle with executing and measuring their ROI.
  • 78% of retailers are focusing on inventory management. With 33% aiming to invest ‘ in inventory management technology soon’.

Social Media

  •  Over 60% of retailers say they are focusing on social media to create value. But two-thirds of consumers are not engaging at all.
  • Those that do engage with retailers on social media are mainly using it to obtain discounts.

Store Associates: The Unsung Heroes

The AERO findings show that despite investments being directed towards technology and social media engagement, consumers state that experience and service have the most impact on store productivity. However, retailers put too little investment focus on store associates. 70% of retailers expect spans of control to widen in the near future, and almost all express concern about the workforce adapting to omnichannel demands. This shows that retailers need to focus on properly supporting in-store staff, especially in customer service operations.

Bottom Line: Despite the focus on ‘bricks and clicks’ , retail is still a ‘people’ business. People are still a key ingredient to success.

To access the full report, click here