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Here’s what you need to know today.

1. Thai conglomerate CP Group set to buy 7-Eleven franchise in Indonesia

Charoen Pokphand Indonesia, an affiliate of Thai conglomerate Charoen Pokphand Group poised to buy 7-Eleven franchise in Indonesia for $75 million. The objective is to revive the convenience store chain. Although the franchise is top-of-mind for Thais, its presence in Indonesia is overshadowed by local players such as Indomaret and Alfamart.

Indonesia’s 2015 decision to ban alcohol sales at small retail stores dealt a major blow to 7-Eleven. Modern Sevel said it closed around 25 locations in 2016.

CP Indonesia is the country’s top poultry producer, logging $2.9 billion in revenue in 2016. The acquisition is expected to boost its downstream business.

Another interesting development that could come out of the acquisition is CP Group’s partnership with Ant Financial, and the existence of True Money in Indonesia. It seems like CP Group is already laying out plans to cater to the country’s unbanked population.

Read the rest of the story here.

 

2. Myanmar’s Shop.com.mm to launch online payment platform

Shop.com.mm now has more than 500 local partners selling on the website and are forging international partnerships to bring on more partners to sell on its platform. Aside from partnership expansion plans, the ecommerce platform is poised to launch its own online payment system.

The firm is cooperating with several banks to launch its online payment system, in addition to using existing services such as AGD Pay, OK Dollar, and Wave Money.

Currently, customers can pay via cash on delivery or swipe on delivery. Bringing in an online payment option may take some time, as trust is a big hurdle to ecommerce in the country.

Read the rest of the story here.

 

3. Recommended Reading: How in-home package delivery can save ecommerce

Would you allow UPS to drop off a package inside your home when you’re not there?

That question is at the heart of a three-month pilot program that smart lock maker August tried out last winter with 76 of its users in an attempt to see if the company could help jumpstart the ecommerce industry.

“It’s a question of working with those providers to make this something that’s commercialized, with training,” the company said. “We’ve already completed trials with some, and some are moving toward commercialization plans. The trick will be to get people to the point where they take such things for granted, much as we all do now with things like taking rides with Uber or Lyft, or staying in people’s homes via Airbnb.”

Read the rest of the story here.

 

 

 
 
 
 
 

 

There’s increasing pressure for ecommerce companies to offer customers “value-added services” such as same-day delivery or offline pick-up points thanks to a growing generation expectant of instant gratification – waiting even 3 days for a package isn’t going to cut it.  

Online brands and retailers end up working with a variety logistics companies to deliver orders across urban and rural areas in a quick fashion to appease customers. This is a trend not only in developed economies, but demanded in developing countries such as Thailand and Indonesia as well.

Progression of logistics in Southeast Asia

Southeast Asia is poised to become one of the world’s fastest growing market for ecommerce, estimated to exceed $238 billion by 2020. Known to be ridden with infrastructure challenges such as fickle trade regulations and lack of roads, government initiatives across the region are being put in place to improve logistics.

An example is the Indonesian government’s push to increase accessibility of islands in the country by constructing a road alongside the Malaysian border and building seaports.

“If you look at the roads, airports and railways, things are improving and will continue to. Infrastructure spend in Indonesia is expected to reach $165 billion by 2025 and the spend in public investment expected to increase by 7% per year,” says Charles Brewer, CEO at DHL Ecommerce.

Thailand also has a $50 billion infrastructure budget as the country plans to improve roads, highways and railways in the upcoming years.

But long term changes will take both investment and time before the region’s infrastructure can catch up to “same-day appetite” in developing markets and at a relatively inexpensive cost.

The ‘Light’ Model

In the meantime, online players can rely on the rise of an on-demand, lighter logistics model that tackles issues of long delivery periods and limited distribution in rural locations.

According to real estate consulting firm CBRE, modern logistics services are shifting away from big box warehouses, bulky deliveries and in turn, expanding their networks with existing infrastructure or building small counters across the country to meet the demands of clients.

Examples of this in Bangkok include SKYBOX pickup and dropoff kiosks, located at the city’s public train stations and Zalora Thailand that uses 7-Eleven as return points.

Logistics providers are also introducing collection points at existing locations such as shopping centers or office buildings in second and third tier cities as seen by DHL Ecommerce’s recent nationwide expansion in Thailand. The company’s aim is to decrease the time SMEs take to ship parcels.

According to a DHL survey, 55% of SMEs cite logistics as a time killer.

It’s resource heavy to build new hubs and roads and companies can’t afford the time needed to see infrastructure improvements and capture market share. By turning to a light model, logistics services can provide efficient, speedy services without big investments.

Adapting to (on) demand

Southeast Asia’s increase in delivery expectancies could be attributed to the fact that mobile subscriptions are ahead of the global average with 854 million mobile connections. These mobile first users can easily request for on-demand groceries, t-shirts and hot meals on the go with their phones.

Next day delivery account for 95% of existing logistics services in Thailand, while the remaining 5% is filled by on-demand delivery services. There’s still a vast opportunity for logistics players to service ecommerce companies that require speed and efficiency.

In Indonesia, there are PopBox lockers designed to make last mile more convenient for shoppers and merchants. According to William Tanuwijaya, CEO of B2C marketplace Tokopedia, “courier businesses will grow as they are needed to deliver products sold on marketplaces. The promise of fast delivery is also appealing to locals.”

In order to fully serve Southeast Asia’s growing customer demand for faster deliveries, logistics companies need to offer localized, out of the box solutions such as pick-up points in parcel shops, partnerships with convenience stores, lockers or risk being left behind.

 

Here’s what you should know before the weekend starts.

1. Fintech hub Lattice80 expands to build ties between Singapore and India

Singaporean Fintech hub Lattice80 has signed an MOU with the Andhra Pradesh state government to open a fintech hub in the Indian city of Vizag.

As part of the agreement, Lattice80 will run training programmes to train 1,000 ICT professionals in India every year. The two sides will also co-research and develop key fintech technologies, including digital and mobile payments, blockchain and big data.

Read the rest of the story here.

 

2. Citi and Visa launch an e-procurement platform in Singapore

Thailand’s robust mobile payment landscape has given rise to convenient payment methods that range from mobile payments via one of Thailand’s leading mobile networks, AIS’s mPay to top-up kiosks scattered around public transport platforms and 7-Eleven.

Despite the wide range of attractive post-paid plans offered by mobile network companies, a large fraction of Thais still prefer to use pre-paid plans by regularly “topping” up their mobile credit because of it’s flexibility for those with small budgets.

Companies running the kiosks are also capitalizing on their popularity by offering other services in hopes of maturing the users’ digital habit. Long-standing kiosks such as Boonterm provides a money transfer service and even vending machines that dispenses drinks.

With Thailand’s top-up kiosk market worth approximately $1.9 billion, it’s no surprise more payment options are popping up but who are the country’s main players? And what’s True Money’s role in all of this? eIQ explores Thailand’s mobile top-up landscape.

Boonterm

Boonterm operates under “Forth Smart Service” plc. and offers a pre-paid mobile top-up service to Thai consumers nationwide and owns 45% market share. It also offers online money transfers under the brand “F-Smart”, the user simply inserts cash or coins. F-Smart can also facilitate real time verification of payment and displays past transactions.

The company’s 90,000 kiosks kiosks are available nationwide at convenient locations such as 7-Eleven, Tesco Lotus, Family Mart, Big C, Jiffy Gas Station and Bangkok’s public transportation systems (BTS/MRT).

 

AJ Termsabuy

AJ Termsabuy initially offered a pre-paid mobile top-up service as its main ventricle but has since offered other features such as online mobile games top-up (via True Money), mobile phone bill, insurance and credit card payments.

The company’s key advantage is demographic reach because its 3,7000 kiosks kiosks are installed with five languages: Thai, Burmese, English, Cambodian and Bahasa Melayu.

 

Singer

Singer Thailand plc. is a distributor for electronic products from fridges to sewing machines. The company also owns 20,000 mobile top-up kiosks across Thailand. Jaymart, one of Thailand’s biggest mobile distributors, bought 25% of Singer in 2015 for $30 million. The plan was to combine Singer’s 200 distribution outlets nationwide with Jaymart’s 250 distribution channels to own more of its value chain. Singer’s key target is customers upcountry unlike the other two mentioned.

 

True

Thailand’s largest communications conglomerate that owns TrueVisions, TrueMobile and TrueMoney (the latter now tied with Alibaba’s Alipay), True, announced the launch of 40,000 “TrueMoney” kiosks that will allow True users to top-up their mobile accounts and pay online game credit.

Last year, TrueMoney introduced TrueMoney Transfer, an offline remittance service that allows Burmese workers in Thailand to transfer money to families in Burma safely. Prior to this, most workers would ask friends travelling back to Burma to deliver the money in person but there is no guarantee that the money will ever reach the intended receiver.

TrueMoney Transfer has 681 physical counters, or transfer spots, in Myanmar, where family members across the country can pick-up money sent from Thailand with a secure 8-digit code. Workers in Thailand simply visit any of the 250 transfer spots in Thailand, Bangkok, Samut Sakhon, Samut Prakarn, Tak, Ranong, Kanchanaburi, and Phuket, to complete a real-time transaction.

Currently, this service is available through only TrueMoney Transfer service points and the TrueMoney mobile app.

 

True’s move: Another step towards monopolization?

It gets more interesting when we take into account that True owns 9,000 7-Eleven branches nationwide. A True spokesperson declared that for phase I of “TrueMoney Kiosk”, the company will only be placing a handful of kiosks at 7-Eleven and coffee shops to test out the public’s reception to its mobile top-up service.

However, the power of a wide offline footprint and its convenience factor makes it hardly surprising if TrueMoney kiosks did end up at all of the 7-Eleven branches and effectively squeeze out Boonterm from its usual turf. Last year, 7-Eleven made headlines when it discontinued its partnership with AIS, which meant that 1-2-call mobile top-up cards could no longer be purchased from any of the convenience stores across Thailand.

As True has not yet begun introducing phase I, smaller “top up” players have time to push more aggressive marketing initiatives, one that typically begins with education or others will simply have to adapt or die.

 

Welcome back from the weekend. Here’s what you need to know.

1. Drone delivery startup Flirtey raised $16 million

What has Flirtey done? Last year, Flirtey generated a buzz in food and retail when its unmanned aerial vehicles began delivering Slurpees from 7/11 to thirsty denizens of Nevada. The startup has also flown pizzas to Dominos customers in New Zealand.

Who did they raise money from? VC’s are bullish on drone related tech and services, 95 drone tech companies raised equity funding rounds of at least $500,000 in 2016.

Flirtey’s Series A round was led by the company’s seed investors, Menlo Ventures and Qualcomm Ventures.

What will the funding be used for? Run more deliveries for its existing clients, and to get in front of new potential customers in retail in the US, New Zealand and later, in Japan.

Read the rest of the story here.

 

2. Malaysia’s RHL Ventures invests in Beyonce backed Sidestep

Malaysia-based venture capital firm RHL Ventures has invested an undisclosed amount in US-based technology startup Sidestep Technologies Inc along with other A list co-investors in Hollywood.

What is Sidestep? Sidestep is a mobile commerce application with the slogan “Skip the Line” and creates a platform that allows their users to skip long queues during live music events when buying merchandise and other exclusive items.

What is RHL aiming to do now? Expand their investments further into Southeast Asia, meaning that Sidestep is their first foray into the west.

Read the rest of the story here.

 

3. Recommended Reading: Retailers turn to Silicon Valley to attract customers

What’s the secret? Personalization “is the Holy Grail,” says Salesforce Commerce Cloud Chief Executive Jeff Barnett, who works with brands such as L’Oreal and Under Armour.

Amazon: Deep-pocketed Amazon has been investing in technologies like these for years, aiming to make it easy to find items and click buy. Tech providers are filling that gap for other traditional retailers that don’t necessarily have the means to do the same.

Nordstorm: The retailer is now piloting in-store beacon technology that will direct shoppers to express checkout lines or alert them when a fitting room opens up via an app on their phone with Bluetooth turned on.

 Read the rest of the story here.

2016 was a buzz year for drone crafts. The technology gained instant coverage across different industries and media sites as more companies created drones or were rumored to have one in the works.

Various logistics industry specialists also came out to assess the role of delivery drones in the landscape of logistics and last mile and predicted that drones have the potential to disrupt and reduce costs associated with traditional supply chain.

Logistics companies and retailers such as Amazon and Walmart have invested in pilot projects, but no drone has yet been commercialized. Logistics players such as DHL and Flirtey have successfully completed a few drone deliveries but are currently still in trial period.

With so much chatter in the drone conversation, which companies in our industry have actually shown progress in drone deliveries? We take a look:

1. DHL

Having operated a drone research project since 2013, DHL reportedly made a trip around a mountainous area in Bavaria, Germany area three times faster than cars with its “parcelcopter” in May 2016.

We have achieved a level of technical and procedural maturity to eventually allow for field trials in urban areas as well,” said DHL manager Jürgen Gerdes.

The delivery giant also reported to have built an automated system that can deliver packages such as medical supplies between two remote Bavarian villages. End-customers were able to visit a DHL “skyports” location where it stores the drones during the trial period in November 2016, insert their package into an allocated box and input a code that activates the drone.

DHL is also the first to apply to be a part of the mobile controlled UAV traffic research project, which will be effective this year.

 

2. Amazon

drone deliveries

Amazon already has a plane, a credit card, an employee-less grocery store so naturally the giant would have a drone delivery system they coin Prime Air. The company expects the drones to transport packages safely to customers within 30 minutes.

According to recent reports, Amazon has filmed for permission to run tests on experimental wireless communications technology – possibly to bolster Prime Air. Tests will take place at Amazon’s headquarters in Seattle before moving to its customer service facility in Kennewick, Washington.

If the requested tests are indeed related to Prime Air, it highlights how serious Amazon is about implementing drone delivery on a large scale. The senior manager of Amazon’s drone delivery service is Neil Woodward, a retired astronaut, and is listed as the primary contact on documents submitted by Amazon to the Federal Communications Commission regarding base stations for the wireless comms technology.

3. UPS

UPS made headlines in October 2016 when the package delivery giant sent a drone to deliver an asthma inhaler to a children’s summer camp on an island just off Massachusetts in the US.

According to UPS, the company is focusing on using drones to fly in remote locations to deliver emergency supplies. A more widespread delivery service is years away into the future.

 

 

4. Diamler

Diamler, the manufacturer of Mercedes Benz has been taking very active strides in drone innovation this past year. From its drone-equipped delivery van concept in September 2016 to its most recent $17 million investment in London based Startship technologies, a delivery drone startup.

Diamler’s drones aim to change last mile deliveries by integrating an advanced routing solution, which will provide information on where to place a package or whether a signature is required. It will still have to maneuver between the drone regulations set by the FAA in the US though.

 

5. Walmart

In collaboration with the Federal Aviation Administration and NASA, Walmart was developing internally autonomous drone technology that allows a quad-copter drone to take 30 images per second from a top-mounted camera, as well as deliver parcels. This was back in June 2016.

The Walmart drone is most likely still in the development phase, but the company plans to integrate the drones into all of its distribution centers in the future.

 

6. Alibaba

The buzz surrounding Alibaba’s Taobao drone started to circulate last February. Taobao ran a real world test that lets 450 people in Beijing, Guangzhou and Shanghai order ginger tea and receive it within the hour. The test period only lasted for 2 days, but it was one of the first practical instances of drone delivery in urban areas.

Since then, the Taobao drone has been PR shy.

 

7. 7-Eleven/Flirtey

7-Eleven actually got a head start in the drone race, beating everyone by being the first to successfully complete a regular drone delivery to consumers in the US in December 2016. Approximately over 70 orders were placed in Reno, Nevada and received doorstep drone treatment.

According to Flirtey, the average delivery time was 10 minutes. Customers mainly ordered snacks and beverages, including over the counter medicine.

Slurpees and sandwiches could be widely delivered within the US via drones in the near future.

 

What’s next?

Which logistics company or retailer do you think should pilot drones next? Is Southeast Asia too far away from launching commercial drones or would the bustling streets of Bangkok and Jakarta be prime locations for drones in the future? Let us know in the comments.