Here are today’s most news worthy ecommerce headlines.

1. Rocket Internet says it lost $682m so far this year

More financial earning reports from Rocket:

The earnings statement touts several achievements, such as improving profit margins and net revenue, bragging that selected companies have reached record revenue in the year so far.

Read the rest of the story here

 

2. Singapore becomes a test bed for Citi Pay e-wallet

Entering the already crowded e-wallet marketplace is Citi with the official launch of Citi Pay, a digital wallet developed by the bank. It says Singapore is the first country in the world to have Citi customers have access to its new e-wallet facilities.

Read the rest of the story here

 

3. New study encourages Amazon restrictions

Within the company, the report claims that Amazon is driving down wages of manufacturing and delivery jobs with a long-term goal of automating thousands of positions. And the company is doing this while taking millions in public subsidies to build warehouses around the country.

Read the rest of the story here

It is hardly a secret anymore – ecommerce in Southeast Asia is an enormous $238 billion opportunity that has been under the global radar in the recent years. It’s no longer about whether businesses should have an online presence, but instead how they can stay relevant to their audience in a quickly crowding space.

Indonesia Ecommerce Landscape

ECOMScape: Indonesia details the growing ecommerce ecosystem as of 2016. Source: eIQ

One market that has time and time again stood out is Indonesia thanks to more accessibility to mobile devices, affordable data plans and a youthful demographic propelling social channels and social commerce to the leading activity on the internet. It is a clear goldmine for brands, retailers and investors alike to unlock over 250 million unrealized online shoppers.

So how are they going to do this? Well, Indonesia is a mobile-first country and its citizens update their social networking apps twice more frequently than games and fives times more than music/video apps according to a study by Baidu.

In the next three years, Indonesia is expected to have over 92 million smartphone users, up 67% from 2015. This will push many startups to skip desktop entirely and focus on smartphone friendly ecommerce products. New apps have been the popular way to reach customers, but large spending for development, maintenance, and marketing have restricted companies from finding long-term success. And what happens when app downloads start to slow down as currently happening in the US?

wearesocial-indonesia-eiq

The rising global resistance to new apps

Almost 50% of smartphone users in the US did not install a new app last month while less than 25% of the ones who did returned to it after the first use. What’s even more shocking is a full 94% of revenue in the App Store comes from only 1% of all publishers, think Google and Facebook.  

Mobile isn’t dead but the opportunity is shrinking. So what does this mean for businesses scrambling to capture the attention of the world’s fourth largest population who prefers to use on average only 6.7 apps?

You don’t chase customers, you find them where they already are.

For the first time, messaging apps have surpassed social networks and that’s where chat commerce comes into the story.

Chatbot, chat commerce

Chat commerce isn’t the future, it is the present.

Chat commerce or conversational commerce is the intersection of messaging apps and shopping and is already a very familiar concept in the West. Businesses understand the importance of being readily available to their customers, especially as a poor customer service experience will drive 89% of them to a competitor.

According to Facebook, more than 50 million companies operate on its platform and send more than 1 billion business messages every month.

But having properly trained customer service reps to support hundreds to millions of personal conversations in parallel is difficult to scale for any business. Solution? Chatbot.

A chatbot is an AI (artificial intelligence) feature of a chat or messaging platform that simulates a human conversation with the user in order to provide them with the information or service they’re looking for.

Brands overseas like Taco Bell have partnered with Slack to allow customers to order and pay through the team communications platform.

Think about Siri who has been helping Apple users carry out tasks since 2011 or Amazon Echo, an at-home device by Amazon, which encompasses a chatbot named Alexa to read aloud weather reports, set alarms and more importantly, help customers order new products from Amazon.

chat-bot-amazon

Screenshot from Amazon Echo commercial.

These are only a few of many examples. Facebook Messenger also opened its platform earlier this year for businesses to build chatbots through its Messenger Send/Receive API.

The API will support sending and receiving text and also images and interactive rich bubbles containing multiple calls-to-action.

chat-bot-benefits, southeast asia chatbot

A chatbot can clearly offer a business great benefits to get closer to customers in a medium they are already familiar with, so why has there been little activity in Southeast Asia?

Call all chatbots

Southeast Asia has largely mirrored the West and particularly China in development of its ecommerce maturity. Yet, current chatbot growth has been stuck at the ‘idea phase’ – a lot of chatter and buzz about its revolutionary importance but no product.

“The reason why companies in Southeast Asia haven’t created chatbots isn’t because they don’t think the opportunity is there, but they lack the resources and most fundamentally – AI talent to build it,” comments Lingga Madu, Sale Stock co-founder.

No company has released a true commercial-scale, transaction-enabled MVP, that is, until now.

Sale Stock case study: Facebook Messenger’s first chatbot in Southeast Asia

One lesser talked about company has already begun testing its chatbot with Facebook, Indonesia’s most popular social channel. Sale Stock, the mobile first shopping platform widely popular among Indonesia’s young females, has become SEA’s first company to launch a chatbot that can handle end-to-end transaction on Facebook’s Messenger Platform.

Meet Soraya AI, a relatable, cheery chatbot who handles 100% of queries coming to Sale Stock’s Facebook Page and the brainchild of Facebook, Google, Palantir, and NASA engineers recruited by Sale Stock around the world.
sale-stock-chat-2, southeast asia chatbot

Soraya uses machine learning to shuffle through queries and decide whether to answer it autonomously or give recommendations to an agent instead.

Frequently asked questions such as “do you offer cash on delivery?” or “do you sell high heels?” are replied to almost instantly. In development since 2015, she can already handle 22% of all queries autonomously.

The beauty of machine learning is that the more information she receives, the smarter she becomes and the more accurate her answers will be.

Soraya has already improved response time by 20 – 40 times and currently replies within 60 s. That has granted Sale Stock a response time badge on their official Facebook page.

sale-stock-fb, southeast asia chatbot

Soraya has also been fed large amounts of past Sale Stock customer queries to enhance her intelligence. This combined with recent purchasing behavior and browsing history allow her to recommend consumers personalized products.

Buying the product is even more simple. Soraya asks for confirmation of the item, correct size and color, all within Messenger, and requests address and payment method. If it is a returning shopper, all previous payment information is saved so purchase is simply a click of yes.

sale-stock-chatbot, southeast asia chatbot

“Soraya was created to meet the needs of our customers, many of whom are living outside major cities on limited social media data plans where chat is free but browsing is not. Some have never even been exposed to digital shopping carts but chatting is second nature,” – Jeffrey Yuwono, Sale Stock President.

Trust is also a major concern that holds many Indonesians back from trying ecommerce. By creating a personable chatbot on a familiar channel, brands hope customers will feel comfortable sharing their personal details.

sale-stock-chat, southeast asia chatbot

Chatting with Soraya on Facebook Messenger

Sale Stock chat bot, Indonesia

What’s next for Sale Stock?

The company is already working to create viable chatbots for WhatsApp, LINE, BBM and SMS as they are the most popular messaging platforms their shoppers use. Sale Stock strongly believes in the Lean Startup methodology, “getting it out there as soon as possible to collect real, user feedback”.

“We’re still in the very early stage of our product and ironing out the bugs and adding features iteratively,” comments Madu.

All inquiries going to Sale Stock are monitored, independent of the channel source, on one platform created in house to control flow and fix any arising bugs.

The team hopes to fine-tune its technology to quite possibly launch SaaS in the future.

“The success of chat commerce depends on how well the machine can distinguish the details: context, intention, the slang, mix of dialects, and even the use of emojis so the customer never feels like they are chatting with a bot. The platform has to be robust enough to handle these typos and fringe use cases,” says Madu.

The future of chatbots

There has always been a fear of AI replacing tasks typically performed by humans, but customer support is a tricky area since personalization is at the core.

“As brand loyalty and exceptional customer service become the main priority for brands, companies simply cannot afford for bots to completely handle customer service and risk creating a negative experience. With that said, the live customer service representative will always have a place with the overall customer experience,” says Mayur Anadkat, Vice President of Product Marketing at call center software provider Five9.

The moment has not yet been reached when machine learning enables 100% accurate and instant replies to customers no matter the language, mix of dialect, slang or emojis – but it is in the foreseeable future. AI is here to enhance, not replace.

Not only will the rise of chatbots improve the reputations of brands but it will be expected of businesses by the next generation of shoppers. As Uber product manager Chris Messina put it, bots present a new, unpolluted opportunity to build lasting relationships with people.

Ultimately, the lack of friction is what makes the shopping experience a pleasant one and what will drive the A players to the head of the game.

By: Cynthia Luo

It’s all about payments today. Read below for today’s biggest headlines.

1. GoSwiff partners with UnionPay to increase mobile transactions in Thailand

GoSwiff, a global leader in digital payments, announced a partnership with UnionPay International (UPI), a global payment network, to enable merchants on Nimmanahaeminda Road in Chiang Mai to accept UnionPay cards. Using GoSwiff’s mobile point of sale (mPOS) solution, micro merchants can now accept and process secure PIN-based card transactions in Thailand.

Read the rest of the story here

 

2. GrabPay just got easier to use

Users can now top up their credit balance inside the app through various channels: credit card, ATMs, internet banking, or through the cashier system at convenience store chain Alfamart.

GrabPay credits can then be used for cashless payment for any service ordered through the app, such as a car ride or food delivery.

Read the rest of the story here

 

3. Digital payments fueling fintech investments in APAC

The emergence of new business models is enabling players to innovate and invest in technologies such as Blockchain, digital payments, cloud services, cyber security, product lines and solutions. Players must rethink strategies and align their business vision with technology goals to define their value proposition to customers and survive in the rapidly evolving digital ecosystem.

Read the rest of the story here

Here are the key ecommerce headlines you need to know.

1. Indonesia to set up crowdfunding platform for ecommerce startups 

Indonesia’s ministry of cooperatives and SMEs has announced plans to set up a crowdfunding platform to fund startups as part of its broader e-commerce roadmap introduced earlier this month. The government will join hands with the University of Indonesia (UI) to build the site.

Read the rest of the story here
 

2. Dentsu Aegis Network acquires ecommerce solution firm Bluecom

 Dentsu Aegis Network (DAN) announced the acquisition of Bluecom Group. The firm will become part of DAN’s digital arm Isobar China Group and will be rebranded as “Isobar Commerce”, in a bid to strengthen the network’s position.
Read the rest of the story here

 

3. Thailand’s Kasikorn Bank joins with IBM for blockchain

Kasikornbank will be the first Thai bank to apply the blockchain technology and aims to start the services in the first half of 2017, Somkid Jiranuntarat, vice chairman of Kasikornbank’s technology group, told reporters.

Blockchain is a web-based transaction-processing and settlement system whose efficiency banks say could slash costs. It creates a “golden record” of any given set of data that is automatically replicated for all parties in a secure network, eliminating any need for third-party verification.

Read the rest of the story here

Lazada Indonesia co-CEO Florian Holm shares what the marketplace has learned since launching in Southeast Asia’s largest market four years ago. These are the most important highlights:

1. Growth lies outside Greater Jakarta

Florian: Growth was seen when we began to extend our free shipping outside of Greater Jakarta. 

Good to know:

  • LEX (Lazada Express) – the company’s 2 – 3 year old logistics arm – subsidizes costs for lower shipping costs and allows them to offer free shipping to approximately 30 cities outside Greater Jakarta.
  • The company has also extended cash on delivery payment option and created initiatives to aid social commerce.
  • Logistics companies and ecommerce solutions providers, like aCommerce, have launched over 10 hubs in cities such as Medan and Jayapura to shorten the last mile process and cut down cash-on-delivery reconciliation. [source]

 

2. Logistics is still the bottleneck

Florian: I think logistics is the biggest challenge; everything else comes afterward. Logistics is not discussed much because it’s a long-term game. You need to be cheap, reliable and fast. If you take 10 days to ship, customers might go to other platforms even though shipping costs more.

Good to know:

  • President Joko “Jokowi” Widodo has a goal of turning Indonesia into the biggest digital economy of the region by 2020 with a targeted value of $130 billion. The government plans to improve eight sectors in the country, including logistics. [source]
  • “In terms of logistics, this is interesting, because we have already decided to reposition [state-owned postal company] Pos Indonesia as a logistical platform for Indonesian ecommerce,” said Indonesia Communications and Information Minister Rudiantara. [source]

 

3. Ecommerce will grow, but there will be fewer players

Florian: I also think that like in every other market, there will be consolidation. There will be fewer players as time goes by.

Good to know:

  • Lazada acquired Singaporean e-groceries startup RedMart to prepare for Amazon’s arrival in Southeast Asia, namely to compete with Amazon Fresh.
  • While Indonesia has Southeast Asia’s highest number of startups, it also faces a big gap in funding. [source]
Indonesia Ecommerce Landscape

ECOMScape: Indonesia gives a snapshot of the country’s ecommerce ecosystem.

4. Lazada is neck to neck for market share

Florian: We have run the first 700 meters, I don’t care for now if I’m only ahead by a little.

Honestly, it’s not bad to be neck and neck with your competition. That inspires you.

Good to know:

  • MatahariMall.com, Blibli.com and Lazada Indonesia have similar traffic numbers per month – deep pockets mean more marketing spend to acquire customers.

ecommerceiq-indonesia-b2c-traffic

  • MatahariMall.com received $100 million in funding in October.

5. It’s too early for brick and mortar retail disruption 

Florian: We are too small right now to make the big retail chains feel it. But maybe the effects will be felt in two or three years?

Good to know:

  • Ecommerce penetration is now around 1 percent in Indonesia, as reported in that Google-Temasek report but expected to grow. Its value tripled 3X since 2013.
  • It’s like Amazon [in the USA]. In the first two, three years they were okay, but in five years, bookstores actually started closing. It took Amazon 15 years to do that.

 

What do you think?

The original interview can be found on Jakarta Globe and published November 29.

Here are the ecommerce news you should know for today.

1. Bank Mandiri partners with LINE for e-transactions

State-owned lender Bank Mandiri has joined hands with chat app operator LINE Indonesia to integrate its Mandiri e-cash product with LINE pay service. The partnership is aimed at facilitating LINE users in carrying out electronic transactions.

Read the rest of the story here.

 

2. Amazon reportedly in talks to acquire Dubai ecommerce site, Souq for $1 billion

Souq.com sells more than 1.5 million products online to customers in the United Arab Emirates, Egypt and Saudi Arabia, according to its website. Seattle-based Amazon is considering a bid for all of the site, which had initially planned to sell a stake of at least 30 percent, the people said, asking not to be identified as the information is private.

No final agreements have been reached and negotiations could still falter, the people said.

Read the rest of the story here.

 

3. Indonesian logistics service providers gear up for ecommerce boom

To help meet the target, the government has instructed state-owned postal service PT Pos Indonesia, which was founded in August 1746, to transform itself into the logistical backbone of Indonesian e-commerce from its current role as a company that heavily focuses on mail delivery.

Read the rest of the story here