acommerce marketing solutions - betagro case study
TRANSCRIPT
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aCommerce
aCommerce Solutions for Betagro | September 2016
Full Service E-commerce Solutions Provider in ASEAN
1 Market Overview & Trends
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The Procession of the Trojan Horse in Troy by Domenico Tiepolo (1773)
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“PayPal is a classic example. The
first high-growth segment was power
buyers and power sellers on eBay.
These people bought and sold a ton
of stuff. The high velocity of money
going through the system was linked
to the virality of customer growth.
By the time people understood how
and why PayPal took off on eBay, it
was too late for them to catch up.”
Source: http://blakemasters.com/post/22405055017/peter-thiels-cs183-startup-class-9-notes-essay
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Ant FinanceAlibaba’s Trojan Horse
• 2nd most valuable non-public tech
company at $60B valuation (#1 being
Uber at $62.5B)
• Alipay: 82% of China payments market
share
• 120m transactions per day (vs. 170m
through traditional banking system)
• Yu’e Bao: biggest mutual fund in China in
terms of investors with $108B USD; No
minimum deposits, withdraw cash
anytime
• Zhaocai Bao: P2P lending platform with
$32B in transactions in first year
• Small business lending services
• Sesame Credit: credit-scoring related
services based on ecommerce data
Source: http://knowledge.ckgsb.edu.cn/2015/08/05/finance-and-investment/can-alibabas-ant-financial-disrupt-chinas-financial-industry
"Ant Financial's goal is to build a new and truly
inclusive financial system on the internet that better
serves small businesses and the public“
-- Jing Xiandong, CEO Ant Financial
PAGE 10
Ant FinanceAlibaba’s Trojan Horse
PAGE 11
The Dis-Intermediation of Everything10-year returns for major retailers in US
Source: Yahoo Finance
+2,262% -13% -35% +121%+64% 0%
PAGE 12
The Dis-Intermediation of EverythingAmazon’s Trojan Horse
Source: https://stratechery.com/2016/walmart-and-the-multichannel-trap
“Amazon, meanwhile, is transitioning to a new model
completely. The vast majority of Amazon’s products are
increasingly sold with little to no margin at all: profitability
comes from fees paid by third-party merchants and Prime
subscriptions. It is a model that is completely dependent on
scale, and the lower the margin and thus prices, the higher
Amazon’s volume, which means ever more leverage from
Amazon’s massive fixed costs in infrastructure and logistics.”
PAGE 13
The Dis-Intermediation of EverythingDis-intermediation not just happening in retail ecommerce
TeslaCars$32B
UBERTransportation
$51B
XiaomiConsumer Electronics
$46B
AirBnBAccommodation
$26B
Ant FinanceFinance & Banking
$60B
ZhonganInsurance
$8B
Dollar Shave ClubConsumer Goods
$1.0B
The Honest Co.Consumer Goods (incl. diapers)
$1.7B
PAGE 14
The Dis-Intermediation of EverythingDollar Shave Club
Source: http://www.nytimes.com/2016/07/27/business/dealbook/1-billion-for-dollar-shave-club-why-every-company-should-worry.html
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The Dis-Intermediation of EverythingDollar Shave Club
“Gillette’s model and P&G’s formula generally cost a lot of money: R&D
cost money, TV advertising cost money, and wholesalers and retailers had
to earn a margin as well, and that’s before P&G realized the return on their
investment. The result was that cartridges that cost less than a quarter to
manufacture and package were sold for $4 or more. That worked as long
as P&G’s other advantages in technical superiority, advertising, and
distribution held, but were they ever to falter, it was eminently viable to sell
cartridges for less and still make a healthy margin.”
Source: https://stratechery.com/2016/dollar-shave-club-and-the-disruption-of-everything
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The Dis-Intermediation of EverythingDollar Shave Club changing distribution and advertising
“AWS and Amazon itself, having both normalized e-commerce amongst
consumers and incentivized the creation of fulfillment networks, made
the creation of standalone e-commerce companies more viable than
ever before. This meant that Dollar Shave Club, hosted on AWS servers,
could neutralize P&G’s distribution advantage: on the Internet, shelf
space is unlimited. More than that, an e-commerce model meant that
Dollar Shave Club could not only be cheaper but also better: having your
blades shipped to you automatically was a big advantage over going to
the store.
That left advertising, and this is why this video is so seminal: for
basically no money Dollar Shave Club reached 20 million people. Some
number of those people became customers, and through responsive
customer service and an ongoing focus on social media marketing,
Dollar Shave Club created an army of brand ambassadors who did for
free what P&G had to pay billions for on TV: tell people that their razors
were worth buying for a whole lot less money than Gillette was charging.
Source: https://stratechery.com/2016/dollar-shave-club-and-the-disruption-of-everything
PAGE 17
The Dis-Intermediation of EverythingDollar Shave Club: all about brand, experience and disruption
“Dollar Shave Club has over three million subscribers but only
about 190 employees. Its razors were made in South Korea by
Dorco. Distribution was initially handled in-house but
eventually was contracted to a third-party company in
Kentucky. What remained was a terrific design, marketing
and customer service shop; and a business that was easily
expandable to meet demand and that had a good niche with
men who do not like to shop.”
Source: http://www.nytimes.com/2016/07/27/business/dealbook/1-billion-for-dollar-shave-club-why-every-company-should-worry.html
PAGE 18
The Dis-Intermediation of EverythingUnilever’s next acquisition target: Honest Company
Source: http://www.wsj.com/articles/unilever-is-in-talks-to-acquire-jessica-albas-honest-co-1473981465
PAGE 19
The Dis-Intermediation of EverythingUnilever’s next acquisition target: Honest Company
Source: https://www.youtube.com/watch?v=HSrGFGJJwzA
PAGE 20
The Honest CompanyDis-intermediation & Product Innovation in Consumer Goods
PAGE 21
The Honest CompanyDis-intermediation & Product Innovation in Consumer Goods
PAGE 22
The Honest CompanyDis-intermediation & Product Innovation in Consumer Goods
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The Honest CompanyDis-intermediation & Product Innovation in Consumer Goods
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Monthly Visits
30.45%
3.83%
17.77%
6.45%
29.22%
11.51%
0.77%
0%
5%
10%
15%
20%
25%
30%
35%
Media Mix
10
50
170
250
0
50
100
150
200
250
300
2012 2013 2014 2015
Revenues
1) Subscription ecommerce service selling eco-friendly, non-toxic family-oriented products such as diapers, skin care and
cleaning products. Best known for its flagship line of baby products including baby wipes and diapers, Honest has
branched into other product categories over time
2) Founded in 2011 by Jessica Alba, Brian Lee (ShoeDazzle), Christopher Gavigan, and Sean Kane
3) Raised $222M so far and valued at $1.7B USD. Backed by General Catalyst Partners, Iconiq Capital, Lightspeed Venture
Partners
4) 80% of sales from online channels
Source: SimilarWeb Pro, Forbes, Privco
124% CAGR
Lazada SG
PAGE 24
The Honest CompanyInnovation in Customer Acquisition – Free Trial + Auto-Renewal
PAGE 25
The Honest CompanyInnovation in Merchandising – Bundling & Customization
PAGE 26
The Honest CompanyInnovation in Merchandising – Bundling & Customization
PAGE 27
The Honest CompanyHonest Beauty – Expansion into new product categories
“I suspect this sort of disruption will not be a one-off: the Internet (and e-commerce) has so profoundly
changed the economics of business that it is only a matter of time before other product categories are impacted, with all the second order effects that entails.”
Source: https://stratechery.com/2016/dollar-shave-club-and-the-disruption-of-everything
PAGE 28
Subscription Commerce Case StudyNescafe Red Cup by aCommerce
2 Betagro Digital Transformation Strategy
PAGE 30
Betagro Digital Transformation StrategyFood Manufacturers already moving online in mature markets
Yurun Group Ltd is the second-largest
meat supplier in China. It is
headquartered in Nanjing, Jiangsu. It
operates in two sectors, chilled and
frozen meat, and processed meat
products, which are marketed under
the brand names of Yurun, Furun,
Wangrun, and Popular Meat Packing.
Source: http://www.chinadaily.com.cn/bizchina/2014-09/19/content_18625695.htm
PAGE 31
Betagro Digital Transformation StrategyFood Manufacturers already moving online in mature markets
Digital coupons
Tmall Flagship Store
PAGE 32
Betagro Digital Transformation StrategyFood Manufacturers already moving online in mature markets
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Betagro Digital Transformation StrategyFood Manufacturers already moving online in mature markets
239 sold this month to date
PAGE 34
Betagro Digital Transformation StrategyBetagro Value Chain & Gap Analysis
TechnologyProduct Design
Manufacturing MarketingSales &
DistributionService
Demand Generation Demand Fulfillment
Educate Acquire Activate Engage Convert Monetize
As-Is
• Event marketing
(Roadshow,
University, Mall,
etc.)
• TVC
• OOH / Ambient
Advertising
• Music Videos
• CSR
• Free Sampling
in Supermarket
(booth), Events
• Free Sampling
in Supermarket
(booth), Events
• Betagro.com
• Betagro Society
(YouTube,
Facebook)
• Retail partners
(Tops, Lotus,
Big C,
FamilyMart,
etc.)
• Betagro Shops
• B2B (Horeca)
To-Be
• + Facebook Ads
• + Display Ads
(Vertical, GDN)
• + Influencer
Marketing
• + Google SEO
• + Google Paid
Search
• + Facebook Ads
• + Display Ads
(Vertical, GDN)
• + Influencer
Marketing
• + Google SEO
• + Affiliate
Marketing
• + Betagro.com
(revamped)
• + Betagro Blog
& Commmunity
• + Content
Marketing (e.g.
Tastemade,
Tasty, etc.)
Marketing
• + Betagro.com
(revamped)
• + Betagro Blog
& Commmunity
• + Content
Marketing (e.g.
Tastemade,
Tasty, etc.)
• Criteo
• Bluecore
• + Betagro
Ecommerce
Brand.com
• + Marketplaces
(e.g. Lazada,
etc.)
• + On-demand
(HonestBee,
HappyFresh)
• + O2O (Online-
to-Offline)
• + B2B
Ecommerce
PAGE 35
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 36
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 37
Betagro Digital Transformation Strategy : AcquireGoogle SEO
SEO
Onsite
Technical
URL Structure
Page Titles
Meta Description
Site Speed
Content
Product Descriptions
SEO Footers
Cooking Blog (e.g. Tastemade)
Offsite
Backlinks
Advertorials
Social Signals
Content Shared on Facebook
PAGE 38
Betagro Digital Transformation Strategy : AcquireGoogle SEO : Cdiscount SEO footers example (by aCommerce)
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Betagro Digital Transformation Strategy : AcquireGoogle SEO : The Outlet 24 SEO footers example (by aCommerce)
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Betagro Digital Transformation Strategy : AcquireGoogle SEO : Cooking Blog
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Betagro Digital Transformation Strategy : AcquireGoogle SEO : Blog / Articles
Content Marketing Case Study: Headlines by ShopSmart.xyz
Headlines Shopping Guide &
Product Review launched
PAGE 42
Betagro Digital Transformation Strategy : AcquireGoogle SEO : Blog / Articles
Content Marketing Case Study: Headlines by ShopSmart.xyz
PAGE 43
Betagro Digital Transformation Strategy : AcquireGoogle SEO : Advertorials for backlinks – KingPowerOnline example
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Betagro Digital Transformation Strategy : AcquireGoogle SEO : Advertorials for backlinks – KingPowerOnline example
PAGE 45
Betagro Digital Transformation Strategy : AcquireGoogle SEO : Advertorials for backlinks – Nescafe example
PAGE 46
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 47
Betagro Digital Transformation Strategy : AcquireSEM : Campaign Structure
Betagro Adwords Account
Brand
Betagro
Betagro Deli
Betagro Shop
Products
Chicken
Wing
Drumstick
Breast
Liver
Egg
…
Pork Processed
Gyoza
Sausage
Popcorn
Spicy BBQ Chicken
…
Pet
Dog’n’Joy
Competitors
CP
CPF
Saha Farms
TGM
Belucky
S&P
…
Recipes
Chicken Breast
Chicken
Healthy
…
Retail
Tesco Lotus
FamilyMart
Big C
7-11
…
Generic Food
Fresh Food
Dairy
Bakery
Beverages
Snacks
Desserts
…
Dynamic Search Ads
Example ad account structure. List not exhaustive
PAGE 48
Betagro Digital Transformation Strategy : AcquireSEM : Optimization Roadmap
Pre-Launch
Brandkeywords
Expanded Text Ads (ETA)
Categorykeywords
ConversionOptimizer
Dynamic KeywordInsertions (DKI)
Mobile Bid Adjustment Tools SEM
GenericKeywords
Search TermOptimization
Exact/Phrase/BroadMatch Type
DynamicSearch Ad
(DSA)
Conversion RateOptimization
Enhance ContentRelevancy(via GTM)
Landing Page Checker Error404, Out of stock
Remarketing lists for search ads
(RLSA)
1st month 3rd month Next step
SEMCompetitorKeywords
Ad CustomizerLocation, Price, Promotion
New Beta Features
AdWords Script
PAGE 49
Betagro Digital Transformation Strategy : AcquireSEM : Utilize Ad Extensions to Increase CTR
Sitelink ExtensionStructured Snippet
Callout ExtensionPhone Extension
Cost per click of ads with high CTR is
normally lower than that of ads with low CTR
PAGE 50
Betagro Digital Transformation Strategy : AcquireSEM : aCommerce is a Google Ecommerce Premier Partner
PAGE 51
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 52
Betagro Digital Transformation Strategy : AcquireFacebook : Campaign Structure
Betagro Facebook Account
Acquisition
Always On(e.g. free shipping, e-coupon
400 THB)
Competitors Fanpage
(e.g. CP Brand, CP Food)
Betagro Society Fanpage
Interest Targeting(e.g. Health, Parenting,
Cooking)
Promotion(e.g. Mother’s Day, Flash
Sale)
Competitors Fanpage
(e.g. CP Brand, CP Food)
Betagro Socienty Fanpage
Interest Targeting(e.g. Health, Parenting,
Cooking)
Retargeting
Non-Purchasers
Website Visitors(exclude purchaser)
Email Subscribers(exclude purchaser)
Offline CRM Database
Up-sell/Cross-sell
Website Visitors who visit product
page(s)
Website Visitors who add to cart
Previous Purchasers
PAGE 53
Betagro Digital Transformation Strategy : AcquireFacebook Video Ads can get massive reach in little time
Facebook already surpassed YouTube as most powerful video marketing channel
PAGE 54
Betagro Digital Transformation Strategy : AcquireFood Businesses in Thailand leveraging Facebook Video Ads
PAGE 55
Betagro Digital Transformation Strategy : AcquireFood Businesses in Thailand leveraging Facebook Video Ads
• 4.8M Views
• 234K Likes
• 50K Shares
PAGE 56
Betagro Digital Transformation Strategy : AcquireFacebook : Ad Mockup Example
PAGE 57
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 58
Betagro Digital Transformation Strategy : Acquire & ActivateOffer free samples for users who register on Betagro website
• Build online database for email marketing (educational emails, drive traffic to store)
• Sign up and get free sample product shipped to user
• Leverage users who got samples to write product reviews / social proof, displayed on Betagro site
• Activate member base for special events – pop up shop, etc.
8,000 New
Subscribers
2,000Store visits &
Sets of samples redeemed
10Online orders
(More orders offline too!)
Kiehl’s Thailand tapped into 5 million Line users to 1) build their member database and 2) drive offline foot traffic and orders by offering users who signed up free samples to be picked up in Kiehl’s offline retail stores
PAGE 59
Betagro Digital Transformation Strategy : Acquire & ActivateFree Trial + Auto-Renewal similar to Honest.com
PAGE 60
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 61
Betagro Digital Transformation Strategy : ActivateEmail Marketing : Why email marketing?
3%
4%
10%
11%
11%
17%
21%
24%
Referral
Facebook(Newsfeed)
SEO
Direct
Price Comparison
Retargeting
SEM
EDM
Share of Orders
101
134
143
167
217
231
237
332
Price Comparison
Retargeting
Referral
SEO
EDM
SEM
Direct
Average Order Value (AOV)
0.39%
0.47%
0.51%
0.57%
0.66%
0.83%
1.10%
2.17%
SEM
Retargeting
Facebook(Newsfeed)
SEO
Price Comparison
Direct
Referral
EDM
Conversion Rate (CVR)
$50
$46
$11
$10
$6
SEM
Retargeting
Price Comparison
Facebook(Newsfeed)
EDM
Cost Per Order (CPO)
Source: aCommerce internal data (etailer client sample, not brand.com. Fashion & apparel ecommerce will have higher share of Facebook)
Email = #1 revenue driver for ecommerce
PAGE 62
Betagro Digital Transformation Strategy : ActivateEmail Marketing : Nescafe Automated Welcome Email
PAGE 63
Betagro Digital Transformation Strategy : ActivateEmail Marketing : Nescafe Automated Welcome Email
PAGE 64
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 65
Betagro Digital Transformation Strategy : AcquireCooking Facebook Pages for Vertical Display & Affiliate
• Drive traffic via advertorials and shop now button on Facebook fan pages
• Page owners make money from sending conversions to Betagro
• Leverage aCommerce Affiliate Platform
PAGE 66
Betagro Digital Transformation Strategy : AcquireCooking Facebook Pages for Affiliate
PAGE 67
Betagro Digital Transformation Strategy : AcquireaCommerce Affiliate Platform case study: One2Car + Frank.co.th
PAGE 68
Betagro Digital Transformation Strategy : AcquireAffiliate Marketing & Vertical Sites
• Mai Yom Auon ไม่ยอมอว้น• กินขา้วกนั• Foodtravel.tv• กบัขา้วกบัปลาโอ• กน้ครัวไม่กลวัหิว (pantip's)• สร้างสรรคเ์มนูไข่ (egg menu)
• Easy cooking• Tasty Easy
PAGE 69
Betagro Digital Transformation Strategy : AcquireAffiliate Marketing & Vertical Sites
Affiliate Marketing &
Vertical Sites
Health
SiamHealth.net
HaaMor.com
ThaiLoveHealth.com
LoveFit.com
Fit-D.com
WomensHealthThailand.com
DooDeeDai.com
Parenting
Th.TheAsianParent.com
PregnancySquare.com
BreastFeedingThai.com
Maerakluke.com
Baby.Kapook.com
Female
Women.Mthai.com
Jeban.com
Cosmenet.in.th
Price Comparison &
Coupon
Priceza
Promotions.co.th
ShopSmart
DiscountCodeThai
Protook
Dealcha
Cooking
Mai Yom Auon ไม่ยอมอ้วน
กินข้าวกนั
Foodtravel.tv
กบัข้าวกบัปลาโอ
ก้นครัวไมก่ลวัหิว (pantip's)
สร้างสรรค์เมนไูข ่(egg
menu)
Easy cooking
Tasty Easy
PAGE 70
Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Health Publishers
Source: SimilarWeb Pro
PAGE 71
Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Parenting Publishers
Source: SimilarWeb Pro
PAGE 72
Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Female Publishers
Source: SimilarWeb Pro
PAGE 73
Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Price Comparison & Coupon Publishers
Source: SimilarWeb Pro
PAGE 74
Betagro Digital Transformation Strategy : AcquireAffiliates & Verticals : Cooking
Source: Facebook, SimilarWeb Pro
Cooking Vertical FB Likes Traffic URL
Mai Yom Auon ไมย่อมอว้น 968,157 https://www.facebook.com/MaiYomAuon
กนิขา้วกัน 1,367,524 https://www.facebook.com/kinkaokan
Foodtravel.tv 750,904 440,600 https://www.facebook.com/FoodTravel.tv
กับขา้วกับปลาโอ 904,090 https://www.facebook.com/Plaocooking
กน้ครัวไมก่ลวัหวิ (pantip's) 547,328 https://www.facebook.com/pantipfoodstuff
สรา้งสรรคเ์มนูไข ่(egg menu) 908,312 https://www.facebook.com/Sangsanmenukai
Easy cooking 1,891,829 https://www.facebook.com/easycookingmenu
Tasty Easy 1,138,055 https://www.facebook.com/tastyeasycooking
8,476,199
PAGE 75
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 76
Betagro Digital Transformation Strategy : Activate + EngageTastemade & Tasty on Buzzfeed
Source: SimilarWeb Pro
PAGE 77
Betagro Digital Transformation Strategy : Activate + EngageRecipes on BestFoods.com
PAGE 78
Betagro Digital Transformation Strategy : Activate + EngageSearch traffic to BestFoods.com from content created
Source: SimilarWeb Pro
PAGE 79
Betagro Digital Transformation Strategy : Activate + EngageNutricia: HIQ Kids Club - www.hiqkidsclub.com
PAGE 80
Betagro Digital Transformation Strategy : Activate + EngageArticles & Content Marketing to drive traffic
PAGE 81
Betagro Digital Transformation Strategy : Activate + EngageFacebook Fanpage with 258,000 followers
PAGE 82
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 83
Betagro Digital Transformation Strategy : Convert99% of users don’t buy in their first visit -> convert via retargeting
PAGE 84
Betagro Digital Transformation Strategy : Convert99% of users don’t buy in their first visit -> convert via retargeting
PAGE 85
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 86
Betagro Digital Transformation Strategy : ConvertBluecore : What is Bluecore?
PAGE 87
Betagro Digital Transformation Strategy : ConvertBluecore : How does it perform?
PAGE 88
Betagro Digital Transformation StrategyOptimal media mix throughout Betagro user journey
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Online-to-
Offline
Ecommerce
(B2C, B2B,
Marketplaces,
On-Demand)
Sampling
Influencer
Marketing
PAGE 89
Betagro Digital Transformation Strategy : MonetizationB2C Ecommerce (Brand.com, Marketplaces)
PAGE 90
Betagro Digital Transformation Strategy : MonetizationB2C Ecommerce (Brand.com, Marketplaces)
PAGE 91
Betagro Digital Transformation Strategy : MonetizationB2C Ecommerce (Brand.com, Marketplaces)
Lazada stores managed
by aCommerce:
• Store Design & Setup
• Store Operations (Day-
to-Day)
• Merchandising
• Marketing
• Customer Service
PAGE 92
Betagro Digital Transformation Strategy : MonetizationMarketplace Flagship Store Example: Yurun.Tmall.com
Yurun Group Ltd is the second-largest
meat supplier in China. It is
headquartered in Nanjing, Jiangsu. It
operates in two sectors, chilled and
frozen meat, and processed meat
products, which are marketed under
the brand names of Yurun, Furun,
Wangrun, and Popular Meat Packing.
Source: http://www.chinadaily.com.cn/bizchina/2014-09/19/content_18625695.htm
PAGE 93
Betagro Digital Transformation Strategy : MonetizationMarketplace Flagship Store Example: Yurun.Tmall.com
Digital coupons
PAGE 94
Betagro Digital Transformation Strategy : MonetizationMarketplace Flagship Store Example: Yurun.Tmall.com
PAGE 95
Betagro Digital Transformation Strategy : MonetizationMarketplace Flagship Store Example: Yurun.Tmall.com
239 sold this month to date
PAGE 96
Betagro Digital Transformation Strategy : MonetizationOnline-to-Offline
• Build online database for email marketing (educational emails, drive traffic to store)
• Sign up and get free sample product shipped to user
• Leverage users who got samples to write product reviews / social proof, displayed on Betagro site
• Activate member base for special events – pop up shop, etc.
8,000 New
Subscribers
2,000Store visits &
Sets of samples redeemed
10Online orders
(More orders offline too!)
Kiehl’s Thailand tapped into 5 million Line users to 1) build their member database and 2) drive offline foot traffic and orders by offering users who signed up free samples to be picked up in Kiehl’s offline retail stores
PAGE 97
Betagro Digital Transformation Strategy : MonetizationOn-Demand (Betagro Shops, Supermarkets)
• Drive traffic / orders to
Betagro Shops
• Promote Betagro products in
supermarkets
• Advertise / create brand
awareness for new Betagro
products and brands
PAGE 98
Betagro Digital Transformation Strategy : MonetizationaCommerce Case Study: PokeSurance with Asia Insurance
PAGE 99
Betagro Digital Transformation Strategy : MonetizationaCommerce Case Study: Phatra Leasing
PAGE 100
Betagro Digital Transformation StrategyBetagro Value Chain & Gap Analysis
TechnologyProduct Design
Manufacturing MarketingSales &
DistributionService
Demand Generation Demand Fulfillment
Educate Acquire Activate Engage Convert Monetize
As-Is
• Event marketing
(Roadshow,
University, Mall,
etc.)
• TVC
• OOH / Ambient
Advertising
• Music Videos
• CSR
• Free Sampling
in Supermarket
(booth), Events
• Free Sampling
in Supermarket
(booth), Events
• Betagro.com
• Betagro Society
(YouTube,
Facebook)
• Retail partners
(Tops, Lotus,
Big C,
FamilyMart,
etc.)
• Betagro Shops
• B2B (Horeca)
To-Be
• + Facebook Ads
• + Display Ads
(Vertical, GDN)
• + Influencer
Marketing
• + Google SEO
• + Google Paid
Search
• + Facebook Ads
• + Display Ads
(Vertical, GDN)
• + Influencer
Marketing
• + Google SEO
• + Affiliate
Marketing
• + Betagro.com
(revamped)
• + Betagro Blog
& Commmunity
• + Content
Marketing (e.g.
Tastemade,
Tasty, etc.)
Marketing
• + Betagro.com
(revamped)
• + Betagro Blog
& Commmunity
• + Content
Marketing (e.g.
Tastemade,
Tasty, etc.)
• Criteo
• Bluecore
• + Betagro
Ecommerce
Brand.com
• + Marketplaces
(e.g. Lazada,
etc.)
• + On-demand
(HonestBee,
HappyFresh)
• + O2O (Online-
to-Offline)
• + B2B
Ecommerce
PAGE 101
Betagro Digital Transformation StrategyProposed Digital Transformation Roadmap
Phase 1
Q4 ’16 – Q1 ‘17
Phase 2
Q1 ’17 –
Phase 3
Q2 ’17 –
Marketing
• Brand awareness
• Build email database
(samples, Lazada voucher)
• Content marketing (onsite
articles, advertorials)
• Performance marketing
• Brand.com development
• Performance marketing
• Content marketing (onsite
articles, advertorials)
• Performance marketing
Sales & Distribution
• Betagro Lazada Flagship
Store
• WindowShop
• O2O
• Betagro Corporate Website
Revamp
• Betagro Blog & Community
• Other marketplaces
(WeMall, 11street, etc.)
• Brand.com (E2E
ecommerce)
• B2B Ecommerce
• On-Demand (Honestbee,
Happy Fresh)
PAGE 102
Betagro Digital Transformation StrategyBetagro Corporate Website Revamp
PAGE 103
Betagro Digital Transformation StrategyBetagro Corporate Website Revamp
3 aCommerce Marketing Solutions Intro
PAGE 105
Marketing VisionTo moneyball traditional digital marketing in Southeast Asia
The way ‘Moneyball’ changed the game of baseball, we are disrupting traditional digital marketing in SEA
PAGE 106
Marketing VisionFinancial and mathematical approach towards marketing
PAGE 107
Marketing#1 Ecommerce marketing agency in SEA
Fastest growing ecommerce marketing agency in SEA
5
75
2013 2015
Active marketing clients
12
22
2015 2016e
Marketing billings ($M)
Unique value prop: full-stack ecommerce performance marketing
Strategic partnerships and proprietary demand gen products
Trusted by blue-chip SEA ecommerce retailers and global brands
Data-driven, end-to-end approach towards marketing
CPA, CAC, CLV optimization, not vanity metrics
PAGE 108
MarketingOur Approach: Mathematics of Marketing
ROI
CLV
ARPU
Gross Margin
Avg. Customer Lifetime 1 / (1-r)
Retention Rate (r)
CAC
CPC
CPM
CTR
CVR
PAGE 109
MarketingOur Approach: Optimize for CLV, not just CAC
PAGE 110
MarketingOur Approach: Full-Stack, Full-Cycle Media Planning
Acquire Activate Engage Convert Monetize
Marketing
Content Marketing
E.g.
Affiliate
Marketing
Data
Financial
Services
(Residential
Insurance, Fire
Insurance, Loans /
Installment, etc.)
Advertising
Services
(Home
Improvement,
Design, etc.)
PAGE 111
MarketingHolistic, data-driven approach towards ecommerce marketing
Strategy &Customer Research
Customer Acquisition &
Activation
Site Landing
Product Discovery
Product Presentation
Shopping Cart Management
Checkout
Order Fulfillment
After-Sales Service
• Homepage• Landing pages• Offers and promotions• User special pages
• Search and filtering• Category browsing• Sorting and ordering• Product previews• Personalization &
recommendations
• Product description• Images and other media• Reviews & recommendations• Product configuration
• Cart management• Shipping options• Wish list• Personalization &
recommendations
• Guest checkout• Payment options• Shipping options• Promo codes• Order confirmation
• Shipping & delivery• Real-time order tracking• Packaging• Notifications
• Search & display• Re-marketing• Word-of-mouth• Email• Social• CRM
• Order cancellation & refunds• Return shipping• Personalization & recommendations• Customer surveys & feedback
Data
• Demographics & psychographics• Media consumption• Purchasing behavior• Customer lifecycles
DW, DMP & BI Tools
PAGE 112
aCommerce Marketing Solutions
Performance Marketing Solutions
Acquisition Marketing
Activation Marketing
Mobile App Marketing
WindowShop (PH)
LaunchPad (TH)
Marketing Technology
ShopSmart
B2C (Price Comparison &
Coupon)
B2B (Data & Audiences)
Headlines & Trending (Content
Marketing)
Facebook Chat Bot
aCommerce Affiliate Network
Bluecore
B2B Marketing & Demand
Generation
ecommerceIQ
aCommerce.asia
MarketingServices & Product Overview
PAGE 113
aCommerce Marketing Solutions
(Sheji)
Performance Marketing Solutions
Thailand
(Ten)
SG, MY, VN
(Sheji, acting)
Indonesia
(Adit)
Philippines
(Kat)
Corporate Marketing & eCommerce IQ
(Felicia)
Thailand
(Felicia)
Indonesia
(Stephanie)
Marketing Technology
(Sheji)
ShopSmart
(Pat)
Headlines & Trending
(Pat)
Bluecore
(Bom)
Affiliate
(Bo & Intan)
Regional teams
• Sheji Ho, Group CMO
• Gilt Groupe, Moda Operandi, Groupon, Dell
• MBA, New York University, Stern School of Business
• Felicia Moursalien, Head of Corp. Marketing & eCommerce IQ
• Zalora, United Nations
• BA, University of Toronto, Trinity College
• Ten Chantaramungkorn, Head of Marketing, Thailand
• Lazada Regional
• MS, Imperial College London
• Katrina Cruz, Head of Marketing, Philippines
• Lazada Regional
• BA, University of Philippines
• Aditya Jamaludin, Head of Marketing, Indonesia
• Lazada Indonesia
• BS, Universitas Gadjah Mada (UGM)
11
5
5
4
5
MarketingRegional & Country Team Leads
PAGE 114
Director of Internet
Marketing
Head of Internet Marketing
Senior Internet Marketing Manager
Internet Marketing Managers
(Sr.) Internet Marketing Analysts
Internet Marketing Managers
(Sr.) Internet Marketing Analysts
Senior Internet Marketing Manager
Internet Marketing Managers
(Sr.) Internet Marketing Analysts
Internet Marketing Managers
(Sr.) Internet Marketing Analysts
Head of Marketing Operations
Project Manager
Data Analytics Manager
Tech Manager
Billing/Invoicing Manager
Head of Digital Design
Digital Design Manager
Digital Designers
Digital Design Manager
Digital Designers
Head of Acquisition Marketing
SEM Team Lead
SEO Team Lead
Social Media Team Lead
Affiliate Marketing Team
Lead
Mobile Marketing Team
Lead
Head of Activation &
Retention Marketing
EDM Team Lead
Remarketing Team Lead
Loyalty & Retention Team
Lead
Onsite Optimization Team Lead
Head of Product
Product Manager –
Partnerships (Bluecore,
Shopline, etc.)
Product Manager –
ShopSmart (B2C)
Product Manager –
ShopSmart (B2B)
Product Manager –Headlines &
Tredning
Product Manager –Affiliate Platform
Country marketing solutions team structure
Experienced brand and technical marketers from leading ecommerce and digital agencies
MarketingCountry Team Structure
PAGE 115
Marketing TechnologyLeveraging existing Best-of-Breed (BoB) platforms
SEM
Google Adwords
DoubleClick
Analytics
Google Analytics Campaign Monitor
Mixpanel
Facebook Marketing
Facebook / FBX
Mouseflow
Email Marketing
Retargeting
Criteo
Business Intelligence
RJ Metrics
LeftronicTesting & Optimization
Optimize.ly
Affiliate Marketing
Interspace
aCommerce
Google Adwords
Personalization
Scigineer
aCommerce
Bluecore
Upcast
Price Comparison & Coupon
ShopSmart
PAGE 116
Marketing TechnologyBluecore: Automated, Personalized Trigger Emails
http://marketing.acommerce.asia/marketing/bluecore/tommy%20abandon%20search.gif
PAGE 117
Marketing TechnologyBluecore: Automated, Personalized Trigger Emails
http://marketing.acommerce.asia/marketing/bluecore/mataharimall%20window%20shopping.gif
PAGE 118
Marketing TechnologyBluecore: Automated, Personalized Trigger Emails
PAGE 119
Marketing TechnologyBluecore: Why email marketing?
3%
4%
10%
11%
11%
17%
21%
24%
Referral
Facebook(Newsfeed)
SEO
Direct
Price Comparison
Retargeting
SEM
EDM
Share of Orders
101
134
143
167
217
231
237
332
Price Comparison
Retargeting
Referral
SEO
EDM
SEM
Direct
Average Order Value (AOV)
0.39%
0.47%
0.51%
0.57%
0.66%
0.83%
1.10%
2.17%
SEM
Retargeting
Facebook(Newsfeed)
SEO
Price Comparison
Direct
Referral
EDM
Conversion Rate (CVR)
$50
$46
$11
$10
$6
SEM
Retargeting
Price Comparison
Facebook(Newsfeed)
EDM
Cost Per Order (CPO)
Source: aCommerce internal data (etailer client sample, not brand.com. Fashion & apparel ecommerce will have higher share of Facebook)
Email = #1 revenue driver for ecommerce
PAGE 120
Marketing TechnologyShopSmart: Price Comparison Engine for Thailand and Indonesia
PAGE 121
Marketing TechnologyHeadlines & Trending by ShopSmart – Gadget & Lifestyle Portal
PAGE 122
Marketing TechnologyHeadlines & Trending by ShopSmart – Gadget & Lifestyle Portal
• Over 1 million sessions per month
• Proprietary marketing channel & content marketing opportunity for 11street
PAGE 123
Marketing TechnologyaCommerce Affiliate Platform & Network
Clients:
PAGE 124
Marketing TechnologyATT Skybox
• O2O marketing channel
• TVC, NFC, voucher distribution, offline branding
• Current clients: Lazada, Central Online
PAGE 125
Marketing TechnologyATT Skybox
PAGE 126
Strategic PartnershipsaCommerce x Google
PAGE 127
Strategic PartnershipsaCommerce x Facebook
aCommerce is chosen as a case study for Facebook as it proves to deliver business results – by optimizing Facebook campaigns in real time and delivering personalized ads to match the fast-moving pace of retail environment
PAGE 128
Case Studies – O2O (Vouchers)Leveraging online demand into offline foot traffic and sales
• Build online database for O2O activation
• Sign up and get voucher or QR code emailed to user
• Redeem voucher in purchase in offline store
• Leverage online database to drive foot traffic to offline stores
• Activate member base for special events – pop up shop, collaborations, etc.
8,000 New
Subscribers
2,000Store visits &
Sets of samples redeemed
10Online orders
(More orders offline too!)
Kiehl’s Thailand tapped into 5 million Line users to 1) build their member database and 2) drive offline foot traffic and orders by offering users who signed up free samples to be picked up in Kiehl’s offline retail stores
PAGE 129
Case Studies – O2O (Vouchers)Leveraging online demand into offline foot traffic and sales
aCommerce’s Huawei Thailand Line Hot Brand campaign targeting 5 million Line users and offering free Bluetooth speakers for members resulted in long lines in Jaymart, an official offline retailer for Huawei mobile phones.
PAGE 130
Case Studies – O2O (Gift Cards)Sell H&M gift cards online, driving offline redemptions
• Order H&M gift cards online
• Redeem gift cards in offline stores
• “Test” apetite for ecommerce and performance of marketing channels prior to full E2E ecommerce launch
• Track customer LTV and marketing channel efficiency via unique gift card IDs
• Build business case for full E2E ecommerce
Global search volume for H&M gift cards and vouchers growing YoY, with peaks during gifting seasons. Selling H&M gift cards online in Indo will boost offline sales.
Starbucks selling gift cards online with customizable amount and gifting options.
PAGE 131
Case Studies – Chat / Conversational Commerce“2016 will be the year of conversational commerce”
Source: https://medium.com/chris-messina/2016-will-be-the-year-of-conversational-commerce-1586e85e3991
• Messaging apps have already surpassed social networks in terms of MAUs
• Standalone, concierge apps looking to tap into chat commerce trend – Magic (US), Operator (US), and
YesBoss (ID)
• FB Messenger Platform launched at F8 in 2016 – APIs and tools to build and automate commerce in
messaging apps (already used by Uber, Spring & More)
• Leapfrogging in SEA – Whilst still a novelty in the West, chat commerce is already a reality in SEA: 33% of Thailand ecommerce GMV through Facebook, Instagram, and Line
Animated GIF demo – view full screen to play
PAGE 132
Case Studies – Chat / Conversational CommerceConversational commerce process for H&M Indonesia
Pay via FB or COD
(aCommerce)
Collect cash (optional)
Dispatch aCommerce
messenger to pick up in
store
Bring products to central
packing location (incl.
consolidation of SKUs from
multiple stores)
Deliver to end consumer
Chat agent manned by aCommerce CS staff + FB Messenger
Platform A.I. developed by aCommerce (e.g. latter for browsing
product catalog in chat)
PAGE 133
Case Studies – Chat / Conversational CommerceShopSmart Price Comparison & Coupon FB Chatbot
Animated GIF, full screen to play
PAGE 134
Case Studies – CRM / Loyalty H&M Mobile Loyalty App
• Create and launch H&M mobile loyalty app via Flok
• Leverage online database & app install marketing to drive adoption of H&M loyalty app
• Increase customer LTV through reward points for purchases in H&M offline retail
• Leverage push notifications to activate member base for special events – pop up shop, collaborations, etc.
• Geo-targeting users based on proximity to H&M offline stores
“Create your own virtual zone around your business with a neighborhood perks. Any time a regular enters that area they will automatically get this push notification. It is a great way to target customers close to your business or at a particular event.”
PAGE 135
Marketing – How do we work with our partners?The Mathematics of Marketing: Marketing Biz Plan
ROI
CLV
ARPU
Gross Margin
Avg. Customer Lifetime 1 / (1-r)
Retention Rate (r)
CAC
CPC
CPM
CTR
CVR
PAGE 136
Marketing – How do we work with our partners?The Mathematics of Marketing: Marketing Biz Plan
ROI
CLV
ARPU
Gross Margin
Avg. Customer Lifetime 1 / (1-r)
Retention Rate (r)
CAC
CPC
CPM
CTR
CVR
Traditional agency focus (vanity metrics)
PAGE 137
Marketing – How do we work with our partners?Marketing Business Plan
Summary (Year 1)
Budget Marketing $4,287,875
Orders 212,117
Revenue $12,177,815
AOV $57
ROI (Revenue) 184%
ROI (Gross Margin, assuming 30%) -15%
Marketing Metrics (Year 1)
Budget $4,287,875
Clicks 27,208,326
Sessions (Blended) 19,575,778
Email Subscribers 731,470
Orders (Blended) 212,117
CPC $0.16
CPS $0.22
CVR (Email Subscribers) 3.7%
CVR (Orders, incl. repeat) 1.1%
CPA (Email Subscribers) $6
CPA (Orders, incl. repeat) $20
COS (Cost of Sales) 35%
COS (Cost of Sales, incl. coupon code cost) 40%
Songkran 11/11 12/12 Low Season
M1 = March 2016 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total
Phase 1
Phase 2
Phase 3
Phase 4
Promotions/Coupons
MARKETING
I. Customer Acquisition Search engine marketing (SEM) $40,000 $40,000 $40,000 $60,000 $60,000 $60,000 $100,000 $100,000 $100,000 $80,000 $80,000 $80,000 $840,000
& Demand Harvesting Facebook marketing (incl. Instagram) $120,000 $120,000 $120,000 $60,000 $60,000 $60,000 $100,000 $100,000 $100,000 $80,000 $80,000 $80,000 $1,080,000
Remarketing $53,333 $106,667 $106,667 $80,000 $80,000 $80,000 $133,333 $133,333 $133,333 $106,667 $106,667 $106,667 $1,226,667
Afilliate marketing $0 $10,000 $15,000 $20,000 $30,000 $40,000 $50,000 $60,000 $60,000 $60,000 $60,000 $60,000 $465,000
SEO - Offsite $5,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $115,000
Partnerships (Line, Telco, Banks, etc.) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $218,333 $286,667 $291,667 $230,000 $240,000 $250,000 $393,333 $403,333 $403,333 $336,667 $336,667 $336,667 $3,726,667
II. Customer Activation Email platform and sending $699 $1,199 $1,999 $2,299 $2,969 $3,349 $3,789 $4,749 $5,229 $5,709 $5,709 $5,709 $43,408
Marketing emails produced per month 0 4 8 12 16 20 24 24 24 24 24 24
Trigger emails produced per month 2
Email production $600 $1,200 $2,400 $3,600 $4,800 $6,000 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $61,800
Bluecore $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $10,000 $118,000
% of Orders activated with promo code 95% 86% 77% 69% 62% 56% 50% 45% 41% 37% 33% 30%
First order promocode 15% (recommended) $48,889 $61,298 $61,709 $32,915 $34,007 $34,690 $47,792 $70,547 $66,403 $54,912 $34,885 $33,299 $581,345
Subtotal (excl. promo codes) $1,299 $2,399 $16,399 $17,899 $19,769 $21,349 $22,989 $23,949 $24,429 $24,909 $24,909 $22,909 $223,208
III. Onsite / Conversion Optimization Email capture popup $2,000 $2,000
SEO - Onsite (setup and ongoing maintenance) $10,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $21,000
Subtotal $12,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $23,000
IV. Tracking, Configuration & Dashboards Google Analytics (Enhanced EC tracking) $2,000 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $7,500
XML product feed development $2,000 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $7,500
Subtotal $4,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $15,000
V. Media Buying, Optimization & Management (fixed fee) $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $300,000
Effective % 11% 9% 9% 11% 10% 10% 6% 6% 6% 7% 7% 7% 8%
Total $260,632 $316,066 $335,066 $274,899 $286,769 $298,349 $443,322 $454,282 $454,762 $388,576 $388,576 $386,576 $4,287,875
Est. CPCs Search engine marketing $0.15 $0.15 $0.15 $0.15 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.13 $0.14
Facebook marketing $0.10 $0.10 $0.10 $0.10 $0.10 $0.10 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09 $0.09
Remarketing $0.20 $0.20 $0.20 $0.19 $0.19 $0.19 $0.19 $0.19 $0.18 $0.18 $0.18 $0.18 $0.19
Affiliate marketing $0.15 $0.15 $0.15 $0.15 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.14 $0.13
Est. Clicks Search engine marketing 266,667 269,360 272,081 412,244 416,408 420,614 708,105 715,257 722,482 583,824 589,721 595,678 5,972,442
Facebook marketing 1,200,000 1,212,121 1,224,365 618,366 624,612 630,921 1,062,157 1,072,886 1,083,723 875,736 884,582 893,517 11,382,988
Remarketing 266,667 538,721 544,162 412,244 416,408 420,614 708,105 715,257 722,482 583,824 589,721 595,678 6,513,884
Affiliate marketing 0 67,340 102,030 137,415 208,204 280,410 354,052 429,154 433,489 437,868 442,291 446,759 3,339,012
Total 1,733,333 2,087,542 2,142,639 1,580,269 1,665,633 1,752,560 2,832,419 2,932,555 2,962,177 2,481,252 2,506,315 2,531,632 27,208,326
Est. Visits Search engine marketing 177,778 179,574 181,387 274,829 277,605 280,410 472,070 476,838 481,655 389,216 393,148 397,119 3,981,628
Facebook marketing 800,000 808,081 816,243 412,244 416,408 420,614 708,105 715,257 722,482 583,824 589,721 595,678 7,588,658
Remarketing 177,778 359,147 362,775 274,829 277,605 280,410 472,070 476,838 481,655 389,216 393,148 397,119 4,342,589
Affiliate marketing 0 44,893 68,020 91,610 138,803 186,940 236,035 286,103 288,993 291,912 294,861 297,839 2,226,008
Partnerships (Line, Telco, Banks, etc.) 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 360,000
Organic (incl. direct, SEO, EDM) 1,000 10,000 30,000 38,400 49,152 62,915 78,643 98,304 122,880 153,600 192,000 240,000 1,076,894
Total 1,186,556 1,431,695 1,488,426 1,121,913 1,189,574 1,261,288 1,996,923 2,083,341 2,127,665 1,837,768 1,892,877 1,957,754 19,575,778
% paid visits 97% 97% 96% 94% 93% 93% 95% 94% 93% 90% 88% 86% 81%
% organic visits 3% 3% 4% 6% 7% 7% 5% 6% 7% 10% 12% 14% 19%
Est. CVR (Customers) Search engine marketing 0.80% 0.82% 0.83% 0.85% 0.87% 0.88% 0.90% 0.92% 0.94% 0.96% 0.98% 0.98% 0.91%
Facebook marketing 0.50% 0.51% 0.52% 0.53% 0.54% 0.55% 0.56% 0.57% 0.59% 0.60% 0.61% 0.62% 0.56%
Remarketing 0.70% 0.71% 0.73% 0.74% 0.76% 0.77% 0.79% 0.80% 0.82% 0.84% 0.85% 0.86% 0.79%
Partnerships (Line, Telco, Banks, etc.) 0.60% 0.61% 0.62% 0.64% 0.65% 0.66% 0.68% 0.69% 0.70% 0.72% 0.73% 0.75% 0.67%
Organic 1.50% 1.52% 1.53% 1.55% 1.56% 1.58% 1.59% 1.61% 1.62% 1.64% 1.66% 1.67% 1.63%
Blended CVR 0.58% 0.66% 0.70% 0.82% 0.88% 0.93% 0.89% 0.93% 0.94% 0.99% 1.01% 1.02% 0.98%
Est. CVR (Subscribers and Registered Users) Search engine marketing 4.00% 4.08% 4.16% 4.24% 4.33% 4.42% 4.50% 4.59% 4.69% 4.78% 4.88% 4.92%
Facebook marketing 2.50% 2.55% 2.60% 2.65% 2.71% 2.76% 2.82% 2.87% 2.93% 2.99% 3.05% 3.08%
Display re-marketing 3.50% 3.57% 3.64% 3.71% 3.79% 3.86% 3.94% 4.02% 4.10% 4.18% 4.27% 4.31%
Affiliate marketing 4.00% 4.08% 4.16% 4.24% 4.33% 4.42% 4.50% 4.59% 4.69% 4.78% 4.88% 4.92%
Partnerships (Line, Telco, Banks, etc.) 3.00% 3.06% 3.12% 3.18% 3.25% 3.31% 3.38% 3.45% 3.51% 3.59% 3.66% 3.73%
Organic 4.50% 4.55% 4.59% 4.64% 4.68% 4.73% 4.78% 4.82% 4.87% 4.92% 4.97% 5.02%
Blended CVR 2.89% 3.07% 3.17% 3.51% 3.62% 3.73% 3.77% 3.87% 3.95% 4.08% 4.17% 4.23%
Est. Paid Orders (last touch attribution) Search engine marketing 1,422 1,465 1,510 2,333 2,404 2,477 4,253 4,382 4,515 3,721 3,834 3,911 36,227
Facebook marketing 4,000 4,121 4,246 2,187 2,254 2,322 3,987 4,108 4,233 3,489 3,594 3,667 42,208
Display re-marketing 1,244 2,564 2,642 2,042 2,103 2,167 3,721 3,834 3,950 3,256 3,355 3,422 34,302
Affiliate marketing 0 980 1,442 1,885 2,772 3,623 4,440 5,223 5,121 5,021 4,922 4,826 40,254
Partnerships (Line, Telco, Banks, etc.) 180 184 187 191 195 199 203 207 211 215 219 224 2,414
Total Paid Orders 6,847 9,315 10,027 8,638 9,727 10,788 16,604 17,754 18,029 15,702 15,925 16,050 155,405
Est. Organic Orders 15 152 459 593 767 992 1,252 1,581 1,996 2,520 3,181 4,016 17,525
Est. Total Orders (Paid + Organic Orders) 6,862 9,466 10,486 9,231 10,495 11,779 17,856 19,335 20,025 18,221 19,106 20,067 172,930
Est. Total Daily Orders 229 316 350 308 350 393 595 645 668 607 637 669 5,764
Existing Email Subscribers 0
Est. Registered Users & Email Subscribers 34,278 43,958 47,133 39,435 43,091 47,055 75,211 80,543 84,074 74,919 78,933 82,840 731,470
Est. Registered Users & Email Subscribers (Cumulative) 34,278 78,237 125,370 164,805 207,896 254,950 330,161 410,704 494,778 569,697 648,630 731,470 731,470
Est. Total Customers (New + Repeat Customers) 6,862 9,466 10,486 9,231 10,495 11,779 17,856 19,335 20,025 18,221 19,106 20,067 172,930
Est. % of New Customers in Cohort 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% 90% 94%
Est. New Customers 6,862 9,372 10,277 8,957 10,081 11,202 16,811 18,022 18,478 16,646 17,279 17,966 161,953
Est. New Customers (Cumulative) 6,862 16,233 26,511 35,468 45,549 56,751 73,562 91,584 110,062 126,708 143,987 161,953 895,228
Est. Repeat Customers 0 95 209 274 414 577 1,045 1,314 1,547 1,576 1,827 2,100 10,977
Est. Lifetime Orders Per New Customer (1-year) 1.5 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.8 1.8 1.8 1.9
Est. Total Realized Orders 6,862 9,778 11,241 10,491 12,211 14,030 20,723 23,160 24,915 24,243 26,184 28,280 212,117
Est. Total Realized Orders / Day 229 326 375 350 407 468 691 772 831 808 873 943
Est. Total Realized Revenue $343,083 $498,690 $584,743 $556,651 $660,890 $774,510 $1,166,854 $1,330,165 $1,459,600 $1,448,629 $1,595,884 $1,758,116 $12,177,815
Avg. Month-on-Month Total Orders Growth 38% 11% -12% 14% 12% 52% 8% 4% -9% 5% 5%
Avg. Paid CPA $32 $31 $29 $27 $25 $23 $24 $23 $22 $21 $21 $21 $20
Avg. Blended CPA $38 $33 $32 $30 $27 $25 $25 $23 $23 $21 $20 $19 $25
Est. Average Order Value (AOV) $50 $51 $52 $53 $54 $55 $56 $57 $59 $60 $61 $62
Est. Revenue $343,083 $482,783 $545,477 $489,815 $567,984 $650,270 $1,005,460 $1,110,500 $1,173,142 $1,088,810 $1,164,495 $1,247,517 $9,869,337
Est. ROI (Realized Revenue) 32% 58% 75% 102% 130% 160% 163% 193% 221% 273% 311% 355% 184%
Est. ROI (Gross Margin, assuming 30%) -61% -53% -48% -39% -31% -22% -21% -12% -4% 12% 23% 36% -15%
Est. ROI (Gross Margin, assuming 30%, minus coupon code cost) -79% -72% -66% -51% -43% -34% -32% -28% -18% -2% 14% 28% -28%
Est. COS (Cost of Sales) 76% 63% 57% 49% 43% 39% 38% 34% 31% 27% 24% 22% 35%
Est. COS (Cost of Sales, incl. coupon code cost) 90% 76% 68% 55% 49% 43% 42% 39% 36% 31% 27% 24% 40%
Dependencies:
Organic traffic 1,000 10,000 30,000 38,400 49,152 62,915 78,643 98,304 122,880 153,600 192,000 240,000
SKUs required 333 3,333 10,000 12,800 16,384 20,972 26,214 32,768 40,960 51,200 64,000 80,000
Organic traffic : SKU ratio 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00
Cohorts:
Monthly orders 6,862 9,466 10,486 9,231 10,495 11,779 17,856 19,335 20,025 18,221 19,106 20,067
Avg. monthly orders 312 443 505 457 534 616 958 1,065 1,132 1,056 1,135 1,222
312 443 505 457 534 616 958 1,065 1,132 1,056 1,135
312 443 505 457 534 616 958 1,065 1,132 1,056
312 443 505 457 534 616 958 1,065 1,132
312 443 505 457 534 616 958 1,065
312 443 505 457 534 616 958
312 443 505 457 534 616
312 443 505 457 534
312 443 505 457
312 443 505
312 443
312
Launch + Branding + First Time Customer Promos
15% Off for First Time Customers
Customer Activation
Optimization
11/11 + 12/12 Campaigns
10% Off for First Time Customers15% Off for First Time Customers10% Off for First Time Customers
PAGE 138
Marketing – How do we work with our partners?Marketing Business Plan – Actuals vs Targets Monitoring
PAGE 139
Marketing – How do we work with our partners?Marketing Business Plan – Actuals vs Targets Monitoring
PAGE 140
Marketing – How do we work with our partners?Marketing Business Plan – Actuals vs Targets Monitoring
PAGE 141
Marketing – How do we work with our partners?Engagement Model
Traditional Digital Agencies aCommerce
Remuneration • Management fee % of media spend + CPC/CPM markup
• Retainer
• Classic: management & optimization fee % of media + a la carte services (onsite SEO, analytics, dashboards, CRO, CRM)
• Hybrid: classic + performance bonus• Performance: COGS + CPA
Partnership Relationship-based (with agency rebates)
Performance-based (hitting marketing business plan targets)
Scope of Work Top of Funnel (ToFu) – media buying, impressions, CPM, impression share
ToFu, MoFu (Mid of Funnel) & BoFu (Bottom of Funnel)
Objective Driving impressions (i.e. getting client to spend as much as possible)
Driving sales @ positive ROI @ scale
Team Communications, advertising, marketing & language majors
Comms, Marketing, Business, Finance,Engineering, Math, Stats, Computer Science majors
PAGE 142
Marketing – How do we work with our partners?Launch Phase
Marketing Service Details
Tracking & Analytics • Set up and configure Google Analytics (incl. e-commerce tracking) via Google Tag Manager
• Set up and configure Mixpanel tracking• Implement UTM tracking in the database• Add Adwords, Facebook, and Retargeting tracking and conversion pixels• Create dashboard for day-to-day performance tracking
SEM • Create master sheet with account structure, keywords and ad copies• Upload master sheet into Google Adwords
SEO • Perform full site audit and create document with detailed recommendation regarding page titles, meta descriptions, etc.
• Reach out to bloggers, webmasters, and publishers for linkbuilding
Facebook • Create master sheet with account structure• Create banners• Set up ads in Facebook
Retargeting (Facebook & Display) • Create XML product feed and integrate into retargeting platforms• Create dynamic creatives
Email Marketing • Set up and configure Campaign Monitor for marketing emails• Design and code email templates• Work with client team to implement automated trigger emails
Personalization • Set up and configure TargetingMantra tags• Implement TargetingMantra personalization widgets on client site
PAGE 143
Marketing – How do we work with our partners?Steady-state phase cadence
MarketingService
Daily Weekly Monthly
Tracking & Analytics
• Daily performance dashboard shared with client team
• Pull data from database and other sources for analysis
• Weekly meeting with client to go over dashboard
• Monthly meeting with client to review actuals vs. target, lessons learned, and next month’s action items
• Cohort and LTV analysis (via Mixpanel, database)
SEM • Monitoring and optimization (budget re-allocation, pause/unpause campaigns/keywords, adjust bids and bidding strategies)
• Weekly keyword re-feed (from actual searches and new SKUs)
SEO • Linkbuilding • Linkbuilding • Monthly SEO performance report (ranking for keywords, inbound links, organic orders and revenue, etc.)
Facebook • Monitoring and optimization (budget re-allocation, pause/unpause campaigns, adjust bids and bidding strategies)
• Refresh ads 2-3 times a week• Creative testing
Retargeting (Facebook &Display)
• Monitoring and optimization (budget re-allocation, pause/unpause campaigns, adjust bids and bidding strategies)
• Refresh templates once a month
Email Marketing • Daily performance dashboard shared with client team
• Design, code, and send out weekly campaign marketing email
• Monitor transactional and trigger email performance
• Monthly EDM performance report to review results, learnings, and action items
4 Southeast Asia Ecommerce Macro-Level Overview
PAGE 145
Southeast Asia macroeconomic and industry landscapeSEA slated to become a top 3-4 largest ecommerce market globally
Source: Google x Temasek, “e-conomy SEA: Unlocking the $200 billion digital opportunity in Southeast Asia”
0.40.5
0.9
1.0
1.0
5.5
1.7
TotalSGTHID PHVN MY
7.5
9.7
11.1
8.2
87.9
46.0
PH
5.4
VNID TotalTH SGMY
By 2025, all SEA countries will have an ecommerce market >$5 billion;
Thailand and Indonesia expected to reach $11.1 and $46 billion
Ecom
% of
retail
0.6% 0.6% 0.5% 0.8% 1.1% 2.1% 0.8% 8.0% 4.7% 4.7% 5.5% 5.4% 6.7% 6.4%
Ecommerce market ($ billion)
2015 2025
CAGR: 32%
PAGE 146
Southeast Asia macroeconomic and industry landscapeHowever: Google-Temasek projections for SEA too conservative
$13.2$17 $22 $28 $36 $46 $58 $75 $96$123$157
$3 $6 $15 $30 $52 $88$145$218
$310$419
$509$618
$750
$910
$1,104
$1,264
$1,446
$1,655
$1,894
$2,168
$98$120$155$197$248$310
$380$454$467$476
$552$644
$734$835
$959$1,087
$1,219$1,296
$1,503
$1,656
$1,825
$1,992
$2,175
$2,375
$2,592
$2,830
0
500
1000
1500
2000
2500
3000
Ecommerce Retail Sales / Capita ($ USD)
Thailand Indonesia China United States
Source: eMarketer, China Internet Watch, Census.gov, World Bank, Google x Temasek
China 2006 2016 Change
Ecom Retail
Sales / Capita$4 $509 127x
Ecom % of
Total Retail0.3% 13.8% 46x
Total Retail %
of GDP48% 45%
GDP / Capita $2,082 $8,236
Thailand 2016 2025 Change
Ecom Retail
Sales / Capita$13 $157 12x
Ecom % of
Total Retail0.8% 5.5% 7x
Total Retail %
of GDP34% 43%
GDP / Capita $6,230 $6,649
Based on China benchmarks (Total Retail % of GDP and Ecom Retail Sales / Capita), Thailand ecommerce
GMV by 2025 should be at least 3x the Google-Temasek projection, i.e. $33 billion, not $11 billion.
$3.9 $8 $19 $39 $69$118$196
$296$422
$575$701
$855
$1,043
$1,272
$1,551
$1,784
$2,052
$2,359
$2,713
$3,120
$28 $34 $45 $57 $73 $91$113$137$142$146$171$201$231$264$306$349$394$423$494$548$609$669
$736$810
$891$980
0
500
1000
1500
2000
2500
3000
3500
Retail Ecommerce Sales ($ billion)
Thailand Indonesia China United States
PAGE 147
Southeast Asia macroeconomic and industry landscapeSEA ecommerce fragmented but consolidation will happen
Source: iResearch, Google Trends
Dangdang, 16.2%
Amazon/Joyo, 15.4%
360buy, 15.0%
m18, 10.8%
139shop, 8.8%Redbaby, 4.6%
99read, 3.8%
PPG, 2.7%
Menglu, 2.5%
7cv, 0.8%
MainOne, 0.5% Others, 18.9%
China 2008Q1
Tmall, 50.6%JD.com,
23.3%VIP.com, 3.0%
Yixun.com, 2.6%
Amazon, 2.1%
Suning.com, 2.0%
Dangdang, 2.0%
Yhd.com, 1.9%
Gome, 1.7%
Vancl, 0.5%
Others, 10.4%
China 2014Q1
Like China in ‘08, ecommerce market still fragmented –
1-2 key players to emerge within the next 5 years
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20
04
-2
20
04
-10
20
04
-18
20
04
-26
20
04
-34
20
04
-42
20
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-50
20
05
-6
20
05
-14
20
05
-22
20
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-30
20
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-38
20
05
-46
20
06
-1
20
06
-9
20
06
-17
20
06
-25
20
06
-33
20
06
-41
20
06
-49
20
07
-5
20
07
-13
20
07
-21
20
07
-29
20
07
-37
20
07
-45
20
07
-53
20
08
-9
20
08
-17
20
08
-25
20
08
-33
20
08
-41
20
08
-49
20
09
-5
20
09
-13
20
09
-21
20
09
-29
20
09
-37
20
09
-45
20
09
-53
20
10
-9
20
10
-17
20
10
-25
20
10
-33
20
10
-41
20
10
-49
20
11
-5
20
11
-13
20
11
-21
20
11
-29
20
11
-37
20
11
-45
20
11
-53
20
12
-8
20
12
-16
20
12
-24
20
12
-32
20
12
-40
20
12
-48
20
13
-4
20
13
-12
20
13
-20
20
13
-28
20
13
-36
20
13
-44
20
13
-52
20
14
-8
20
14
-16
20
14
-24
20
14
-32
20
14
-40
20
14
-48
20
15
-4
20
15
-12
20
15
-20
20
15
-28
20
15
-36
20
15
-44
20
15
-52
20
16
-8
Thailand Ecommerce Google Search Interest
lazada itruemart tarad kaidee weloveshopping ensogo advice zalora jib shopat7 cdiscount moxy central online
PAGE 148
Southeast Asia macroeconomic and industry landscapeBack of the envelope calculations for Thailand ecommerce…
Total market:
• Let’s say $1B market size today (AT Kearney / Google x Temasek)
• AOV of $20 (incl. C2C transactions which are typically smaller)
• $1B / 365 / $30 = 91K orders per day
B2C:
• Let’s say $1B market size today
• 50% B2C
• AOV of $50 (due to more electronics/mobile phones in B2C)
• $0.5B / 365 / $50 = 27K orders per day
C2C:
• 91K – 27K = 64K orders per day
• $0.5B / 365 / 64K = $21 AOV
PAGE 149
Southeast Asia macroeconomic and industry landscapePredictions for SEA should be based on China, not global average
Source: https://www.youtube.com/watch?v=eh1c5G7gXQE
PAGE 150
Southeast Asia macroeconomic and industry landscapePredictions for SEA should be based on China, not global average
“Why did Internet e-commerce grow so much
faster in China than in the USA? Because the
infrastructure of commerce in China was bad.
Unlike here, where you have all the (physical)
shops: Wal-Mart, K-Mart, everything,
everywhere. But in China, we have nothing,
nowhere. So e-commerce in the US is just a
dessert; it's complementary to the main
business. But in China, it's the main course.” – Jack Ma
Source: https://www.youtube.com/watch?v=eh1c5G7gXQE
PAGE 151
Southeast Asia macroeconomic and industry landscapeEcommerce in SEA today is China circa 2007/08
Source: CNNIC, eMarketer
1.3%2.1%
3.5%4.4%
6.3%7.4%
12.4%
15.9%
19.6%
23.8%
28.6%
0%
5%
10%
15%
20%
25%
30%
35%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
China Ecommerce Penetration (% Online Retail / Total Retail)
SEA today
China Ecommerce SEA?
Lack of offline retail infrastructure
(especially outside Tier 1 cities)
Surging domestic consumption spurred
by growth in GDP / capita
Major capital investment into
ecommerce businesses
Young, digitally savvy consumers
COD as dominant payment method (in
the early days)
Lack of cross-border ecommerce due
to high import duties and taxes
“No-Tail” ecosystem
Hyper-competition
1) Based on ecommerce penetration, SEA is 8 years behind China. However, SEA will catch up faster due to leapfrogging – 5 years estimate
2) China is the model to predict SEA’s ecommerce future due to similarities in the ecosystem. US/EU/Japan/Korea/Singapore not the right models
for SEA
3) There are differences though: a) SEA is more mobile-first/mobile-only than China; b) China had a headstart in terms of logistics infrastructure
due to the top-down, planned economy nature of the government; c) China made the rapid transition from COD to Alipay as preferred payment
method due to the massive distribution power of Alibaba; d) SEA is more competitive due it being an open market vs. China’s closed market,
making it easier for foreign companies to enter SEA
PAGE 152
Southeast Asia macroeconomic and industry landscapeEcommerce in SEA today is China circa 2007/08
Source: Euromonitor, Planet Retail, eMarketer, iResearch, Technavio, A.T. Kearney
~5 years
PAGE 153
Southeast Asia macroeconomic and industry landscapeKey factors influencing ecommerce in SEA
Source: CLSA, aCommerce
• Large addressable markets with young populations
• Offline retail is underpenetrated
• Rising income levels
• Social media - well connected + social commerce
• High-degree of mobile Internet penetration (exceeding US and China)
• “No-Tail” ecosystem
• Online payment – still dominated by Cash-on-Delivery
• Logistics under-developed (especially B2C)
• Import duties, taxes and online prices – lack of cross-border ecom
(excl. Singapore)
• Open market (compared to China) – hyper-competition (easier for
global entrants to enter and compete)
• Private/direct equity funding – more money than talent available
PAGE 154
Key drivers for ecommerce in SEAOffline retail underpenetrated
Source: CLSA
32,473
6,415
2,178941
1,804847
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Total store count, top 10 retailers
157,631
34,666
3,999 2,698 1,736 4,702
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Total retail GFA, top 10 retailers
2.2
0.5
0.1
0.8
0.3
0.5
0
0.5
1
1.5
2
2.5
Total retail GFA / capita (RHS)
Offline retail in SEA under-developed (especially outside major metropolitan
areas). Lack of offline retail legacy will enable SEA ecommerce to accelerate
at rates similar to China levels (>30-40% CAGRs)
PAGE 155
Key drivers for ecommerce in SEAIncome levels – GDP growth
Source: World Bank
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
19
60
19
61
19
62
19
63
19
64
19
65
19
66
19
67
19
68
19
69
19
70
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19
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19
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19
92
19
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19
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19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
GDP per capita ($)
China Indonesia Malaysia Philippines Thailand Vietnam
Rising GDP per capita and income levels across Southeast Asia will spur
domestic retail consumption. Similar to China, most of this will happen via
ecommerce due to lack of offline retail infrastructure.
PAGE 156
Key drivers for ecommerce in SEASEA is the only truly “mobile-first” region
Source: Wikipedia, CTIA, Pew Research Center, NBTC, iimedia, ITU
28%34%
44%49%
64%
84%
98%104%
112%
121%
132%
143%
0%
20%
40%
60%
80%
100%
120%
140%
160%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mobile Phone Penetration (# mobile phone subscribers / population)
US China Thailand
Average Thai user has 1.4 mobile phones. Mobile phone penetration rate in
Thailand already exceeds that of developed countries like US and China.
PAGE 157
Key drivers for ecommerce in SEAMobile leapfrogging in SEA
Source: Wikipedia, CTIA, Pew Research Center, NBTC, iimedia, ITU, CNNIC, Nielsen, eMarketer, NSO, AIS, dtac, TRUE
Thailand already surpassed US and China in mobile Internet penetration in
less than 1 year after introducing 3G
1%3%
17%
30%
56%
0%
10%
20%
30%
40%
50%
60%
2006 2007 2008 2009 2010 2011 2012 2013
Mobile Internet Penetration (# mobile Internet users / population)
US China Thailand
3G launched in Thailand
PAGE 158
Key drivers for ecommerce in SEAHigh mobile Internet penetration driving mobile commerce
Source: Bain & Company
1) Mobile phone usage for shopping and research exceeding that of developed countries in SEA
like Singapore and Malaysia (urban areas)
2) Access to the rural and rapidly emerging consumer base – 85% mobile commerce penetration
in non-urban Thailand; 79% in non-urban Indonesia
PAGE 159
Key drivers for ecommerce in SEALazada getting over 50% of traffic from mobile only
Source: Lazada Group Investor Report
PAGE 160
Key drivers for ecommerce in SEA“No-Tail” ecosystem
Source: World Bank, Tech in Asia, Techcrunch
Thailand (and rest of SEA ex. Singapore and Malaysia) skipped Web 1.0/1.5 and
leapfrogged straight into Web 2.0. As a result, long-tail content creation nowadays is
mainly happening on closed, social media platforms like Facebook and Instagram
instead of blogs and websites. As a result, we’ll see accelerated development and
proliferance of ecommerce and other non-ad based business models in SEA.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Internet penetration as % of population
US China Thailand Indonesia
US: 30.1%TH: 1.1%ID: 0.3%
US: 61.7%TH: 9.3%ID: 2.4%
US: 75%TH: 20%ID: 5.8%
Web 1.0Homepages
Web 1.5“Self-Publishing/Blogging/UGC”
Web 2.0Social Media
PAGE 161
Key drivers for ecommerce in SEA“No-Tail” ecosystem implications
• Relatively simple ad tech environment
• Affiliate marketing still nascent
• Demand-side platform (DSP) market still nascent
• Accelerated development and proliferance of e-commerce and other non-ad based business models
• “Traditional” digital agencies’ scope reduced to executing global contracts and buying offline media (in US, these agencies still have a role to play due to complicated ad tech environment)
PAGE 162
Key drivers for ecommerce in SEALogistics under-developed
Source: World Bank Logistics Performance Index 2014
SEA ecommerce growth is highly dependent on fixing logistics and payments
1.77
3
3.08
3.08
3.15
3.43
3.53
3.59
3.92
4
4.12
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Somalia
Philippines
Indonesia
India
Vietnam
Thailand
China
Malaysia
United States
Singapore
Germany
LPI
PAGE 163
Key drivers for ecommerce in SEAImport duties and taxes – lack of cross-border ecom (excl. Singapore)
Source: Bain & Company
1) Singapore is the outlier in SEA – majority of transactions are cross-border, not domestic
ecommerce. Cross-border ecommerce driven by zero or low custom duties
2) SEA (excl. Singapore) mainly domestic (local leaders) and fragmented. AEC, while great on
paper, won’t move the needle in intra-SEA cross-border ecommerce
PAGE 164
Key drivers for ecommerce in SEAPrivate/direct equity funding
Source: Tech in Asia
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
2015 Asia VC funding by vertical ($billion)
$0
$100
$200
$300
$400
$500
$600
$700
5 top startup investment categories in SEA ($million)
2014 2015$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2010 2011 2012 2013 2014 2015
Tech investments in SEA ($million)
1) Tech investments in SEA on the rise peaking at 1.6 billion in 2015
2) Given hypergrowth projections, majority of Asia and SEA investments going into ecommerce,
with notable names such as Lazada, Tokopedia, and MatahariMall in SEA
PAGE 165
Ecommerce in ThailandKey players – Traffic
Source: SimilarWeb Pro; excluding mobile app only ecommerce players e.g. Shopee and Line Shop
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Traffic sessions to top ecommerce sites in Thailand (excluding mobile app only ecommerce players e.g. Shopee and Line Shop)
2015-9 2015-10 2015-11 2015-12 2016-1 2016-2
1) Overall, Lazada leads the pack among all types of ecommerce players
2) Among C2C platforms, Kaidee beats WeLoveShopping and Tarad
3) iTruemart (now WeMall) #2 in B2C but big gap between #1 (Lazada) and #2
4) Zalora biggest loser in terms of traffic loss over the last 6 months
PAGE 166
Ecommerce in ThailandKey players – Search interest
Source: Google Trends
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20
04
-22
00
4-1
32
00
4-2
42
00
4-3
52
00
4-4
62
00
5-5
20
05
-16
20
05
-27
20
05
-38
20
05
-49
20
06
-72
00
6-1
82
00
6-2
92
00
6-4
02
00
6-5
12
00
7-1
02
00
7-2
12
00
7-3
22
00
7-4
32
00
8-2
20
08
-13
20
08
-24
20
08
-35
20
08
-46
20
09
-52
00
9-1
62
00
9-2
72
00
9-3
82
00
9-4
92
01
0-8
20
10
-19
20
10
-30
20
10
-41
20
10
-52
20
11
-11
20
11
-22
20
11
-33
20
11
-44
20
12
-22
01
2-1
32
01
2-2
42
01
2-3
52
01
2-4
62
01
3-5
20
13
-16
20
13
-27
20
13
-38
20
13
-49
20
14
-82
01
4-1
92
01
4-3
02
01
4-4
12
01
4-5
22
01
5-1
12
01
5-2
22
01
5-3
32
01
5-4
42
01
6-3
20
16
-14
Google Search Interest
lazada itruemart tarad kaidee weloveshopping ensogo advice zalora jib shopat7 cdiscount moxy central online
lazadaweloveshopping
ensogo
jibzalora
advice
kaidee
col
itruemartcdiscount shopat7
tarad
moxy
Thailand ecommerce market has become more fragmented with new entrants coming in over time
and challenging incumbents. Based on search interest, Lazada is the clear market leader
PAGE 167
Ecommerce in ThailandLazada dominates all ecommerce traffic (34%) and B2C (61%)
Source: Crunchbase, SimilarWeb Pro; excluding mobile app only ecommerce players e.g. Shopee and Line Shop
1%
1%
1%
2%
2%
2%
3%
4%
4%
7%
7%
13%
20%
34%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Moxy.co.th
Cdiscount.co.th
ShopAt7.com
Jib.co.th
Munkonggadget.com
Central.co.th
Zalora.co.th
Advice.co.th
Ensogo.co.th
iTruemart.com
Tarad.com
WeLoveShopping.com
Kaidee.com
Lazada.co.th
% of Total Ecommerce Traffic (excl. Mobile App)
1%
2%
2%
3%
3%
4%
5%
6%
13%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Moxy.co.th
Cdiscount.co.th
ShopAt7.com
Jib.co.th
Munkonggadget.com
Central.co.th
Zalora.co.th
Advice.co.th
iTruemart.com
Lazada.co.th
% of Total B2C Ecommerce Traffic (excl. Mobile App)
Lazada, the Rocket Internet-backed venture, has leveraged it’s first mover advantage
and $710 million war chest to propel itself to a #1 position in Thailand
PAGE 168
Ecommerce in ThailandWhat do people buy online?
Source: ecommerceIQ
91% 84%70% 68% 63% 57% 53%
42%
9% 16%30% 32% 37% 43% 47%
58%
0%
20%
40%
60%
80%
100%
120%
Home & Living Automotive Food &Beverage
Electronics Books Health &Beauty
Fashion &Apparel
Travel Services
Online shopping categories bought in-store vs. online
In-Store Online
1) Home & Living, Automotive and Food & Beverage are Top 3 for In-Store purchase
2) Typically, in early stages of ecommerce development consumers buy commodities (i.e. products easily
comparable such as mobile phones and electronics) and low price-point items such as fashion & apparel.
China went through the same phases and Thailand is going through the same now
3) Home & Living, despite online supply from players like Index and SB Furniture, struggles with the complexities
of fulfillment and logistics due to its bulky and heavy product nature
PAGE 169
Ecommerce in ThailandWhy do people buy online?
Source: ecommerceIQ, Bain & Company
1) Convenience & choice are key driving forces for Thai online shoppers
2) “Not a price war: Choice and convenience matter” (Bain & Company: Can Southeast Asia Live
Up to Its E-commerce Potential?)
38%
28%
22%
12%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Convenience Selection Price I don't shop online
Top reasons why people buy online in Thailand (% of survey respondents)
PAGE 170
Ecommerce in ThailandSocial commerce (unique to SEA excl. SG and MY)
Source: ecommerceIQ
1%
2%
5%
6%
6%
7%
16%
16%
19%
23%
Cdiscount
Moxy
Central Online
Zalora
Rakuten
Other (please specify)
Lazada
LINE
% of total responses
Buying and selling on social media platforms is big in Thailand. Based on a survey
done in Bangkok by ecommerceIQ, 48% of respondents indicated to have purchased
something on Facebook, Instagram, and LINE in the last 3 months.
PAGE 171
Ecommerce in Thailand1/3 of Thailand ecommerce GMV estimated from social platforms
Source: AT Kearney, Tech in Asia, aCommerce internal data
Lazada isn’t Thailand’s biggest ecommerce platform; Facebook and Instagram are.
An estimated 1/3 of total Thailand ecommerce GMV comes from transactions on
“shadow marketplaces” – Instagram, Facebook, and LINE
PAGE 172
Ecommerce in Thailand1/3 of Thailand ecommerce GMV estimated from social platforms
Visit Instagram shop Browse products Inquire about product via LINE
PAGE 173
Ecommerce in Thailand1/3 of Thailand ecommerce GMV estimated from social platforms
Get payment details Confirm payment Ship & track order
PAGE 174
Ecommerce in ThailandLINE jumping on the social commerce bandwagon
LINE launched its Flash Sale product in Q4, 2013, its first B2C ecommerce pilot globally due to the
popularity of LINE and social commerce in general in Thailand. LINE partnered with aCommerce
for this project and sold a variety of products from L’Oreal cosmetics to LINE merchandise to
offline vouchers.
Source: Tech in Asia, LINE, aCommerce
PAGE 175
Ecommerce in ThailandLINE jumping on the social commerce bandwagon
Following up on its Flash Sale success, LINE launched a grocery shopping and
delivery project, partnering up with aCommerce again for fulfillment and logistics.
Source: Techcrunch
PAGE 176
Ecommerce in ThailandLINE jumping on the social commerce bandwagon
Following up on its Flash Sale success, LINE launched a grocery shopping and
delivery project, partnering up with aCommerce again for fulfillment and logistics.
Source: Techcrunch
PAGE 177
Ecommerce in ThailandA peek into the future – Thai college student’s homescreen
1) No commerce apps – all buying and selling done inside Instagram, Facebook, and LINE
2) No Google apps – direct discovery through apps; less searching on mobile (web)
PAGE 178
Future of Ecommerce in ThailandStages of development for ecommerce
Source: ChannelAdvisor, aCommerce
Classifieds
US:Craigslist
China:Ganji, 58
Thailand:OLX/Kaidee
C2C
US:eBay
China:Taobao
Thailand:Tarad, WeLoveShopping, Shopee, LINE Shop
B2C
US:Amazon (41%), Shopbop
China:JD.com
Thailand:iTruemart, Central Online, Cdiscount, Sephora, Lazada (30%), Zalora
B2B2C
US:Amazon (59%)
China:Tmall (100%), JD
Thailand:Lazada (70%)
Brand.com
US:Estee Lauder, Dell, Nike, Under Armour
China:Lancome, Estee Lauder, Dell, Nike
Thailand:Maybelline, Kiehl’s, Estee Lauder, Adidas
1) All markets typically go through the same stages of ecommerce development, moving from classifieds to C2C to B2B2C and brand.com. The
difference between Thailand (and SEA) vs. mature ecommerce markets like US and China is that the timeline is much more compressed here
i.e. everything is happening in a much shorter period (and sometimes all at once)
2) Being a truly mobile-first market, traditional business models are moving much faster to mobile. For example, Shopee, a mobile-only C2C
marketplace by Garena is rapidly eclipsing traditional desktop C2C platforms like Tarad and WeLoveShopping.
3) In China, brands progressed from selling via Tmall as a stepping stone towards operating their own brand.com site. In Thailand, we see
brands doing both at the same time, selling via Lazada as well as their brand.com stores. This is driven by technology making it much easier
to sell through different channels but also by the high degree of fragmentation in the ecommerce market (consolidation happening soon
though).
4) Other leapfrogging happening is the accelerated move towards B2B2C (3P vs. 1P) with Lazada getting over 70% of GMV from third-party
marketplace sellers vs. Amazon’s 59%
PAGE 179
Future of Ecommerce in ThailandStages of development for ecommerce – Ecommerce 1.0 vs. 2.0
Source: https://medium.com/@dunn/e-commerce-is-a-bear-d233f02d52a5#.3nbomul3e
Andy Dunn, Founder & Chairman of Bonobos.com:
On Ecommerce 1.0:
“If you’re selling other people’s brands, you are competing not via a local group of competitors but with
everyone. In this type of market, you might imagine having one large national winner. You might imagine that
winner is ruthless about scale and cost, and is run by a visionary leader who with an extreme long-term
focus. Such a company might not make real money for a long time —but when it does — it will be incredibly
powerful.”
On Ecommerce 2.0:
“When I got to New York in 2007 as founding CEO of Bonobos, many people asked me if I’d heard of Gilt
Groupe. I said no. Next thing I knew they had five hundred employees. Their rise is well documented as
they’re one of the largest e-commerce 2.0 players in the US.”
PAGE 180
Future of Ecommerce in ThailandEcommerce 1.0
Competitive advantage:
• Economies of scale
• Long-term focus (losses
in short-term)
• Acquire competitors that
are a threat
• Exceptional loyalty
program to lock
customers in
• Deep pockets / lots of
funding
PAGE 181
Future of Ecommerce in ThailandEcommerce 2.0
Competitive advantage:
• Proprietary pricing
• Proprietary selection
• Proprietary experience
• Proprietary merchandise
PAGE 182
Future of Ecommerce in ThailandEcommerce 2.0 in Thailand & Indonesia – Proprietary Merchandise
Source: SimilarWeb Pro
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2015-9 2015-10 2015-11 2015-12 2016-1 2016-2
Traffic sessions to Pomelo Fashion
Founded by the ex-Thailand Lazada founding team, Pomelo Fashion is one of the first “Ecommerce 2.0”
companies in Southeast Asia. Rather than selling other brands’ products with low margins, Pomelo Fashion
has taken a M2C/D2C (Manufacture/Direct-to-Consumer) approach, focusing on building its own fashion
brand and vertically integrating its supply chain, going as far as manufacturing its own clothing and apparel.
PAGE 183
Future of Ecommerce in ThailandEcommerce 2.0 in Thailand & Indonesia – Proprietary Merchandise
Inspired by Warby Parker’s success in the US, Glazziq.com and FrancNobel.com are applying the
proprietary merchandise model in the eyewear space in Thailand and Indonesia, respectively. Glazziq
adds a local spin by positioning itself as prescription eyewear for Asians.
PAGE 184
Future of Ecommerce in ThailandEcommerce 2.0 in Thailand – Proprietary Selection
Motif Official is a fashion retailer based in Bangkok focusing on proprietary merchandise and selection.
Their ‘Motif Official’ label is designed and manufactured in-house. For their ‘Motif Select’ range, they select
and curate minimalist brands from across the world. Motif’s ecommerce strategy eerily resembles that of
Nasty Gal in the US, where founder Sophia Amoruso started the business in 2006 by curating vintage
clothing sourced from second hand stores.
Following pure play ecommerce companies in the US like Warby Parker and Birchbox who went offline to
augment their brand, Motif also operates physical stores in Central World and Siam Discovery in the heart
of Bangkok.
PAGE 185
Future of Ecommerce in SEAEcom 2.0 still early in SEA, but it WILL happen
Source: SimilarWeb Pro; Note: Groupon and Ensogo both shut down or sold in SEA
Global SEA
Ecom 1.0 (generic) Amazon, Tmall, JD.com Lazada, MatahariMall,
Central.co.th, iTruemart,
Cdiscount, Sephora, Shopee,
Line Shop
Ecom 1.0 (mid- high-end
fashion)
Shopbop, ASOS Zalora
Ecom 2.0:
Proprietary pricing Gilt, Zulily, One King’s Lane,
Ideeli, Mogujie
Ensogo, Groupon
Proprietary selection ModCloth, Nastygal Motif Official, Orami (Moxy)
Proprietary experience Birchbox, ShoeDazzle
Proprietary merchandise Bonobos, Warby Parker,
Dollar Shave Club
Pomelo Fashion, Glazziq,
Franc Nobel, Sale Stock
PAGE 186
Future of Ecommerce in Thailand2016-2020 predictions
Source: Techcrunch, Tech in Asia
Prediction Why? Examples / Pioneers
1. Brand.com Is Poised To Be The New Black
The evolution of e-commerce commonly follows the trajectory of P2P and C2C to B2C to eventually Brand.com. The U.S. went from Craigslist and eBay to Amazon to brand sites like Nike, J.Crew and Gap. China went from Taobao to Tmall and JD to the many standalone and marketplace brand sites, like Estee Lauder, Burberry and Coach. Today’s Southeast Asia is following a similar pattern, yet at a much faster pace due to “1 to n,” horizontal progress and the resulting leapfrogging behavior. In our region, we have P2P (OLX), C2C (Rakuten, Tokopedia, Shopee), B2C (Lazada, Zalora, MatahariMall) and Brand.com (L’Oreal, Estee Lauder) all happening at once within a very short time frame.
Estee Lauder, L’Oreal, Adidas
2. Omni-Channel Awakens: “There Will Be No More E-Commerce, Only Commerce”
Traditional offline retailers like Central and Big C have a leg up vs. ecommerce pure players due to the existing offline footprint alreadyavailable. These assets can be used for O2O commerce e.g. pick up in store, pay in store, order in store/delivery at home, etc. Also, having this infrastructure enables these players to fulfill and deliver much faster than pure players as stores are the new fulfilment centers.
Central Online, Big C, MatahariMall(Indonesia), Nguyen Kim (Vietnam)
3. Niche-Commerce Models Will Evolve To Avoid The B2C Bloodbath
With B2C ecommerce being a winner-takes-all game, new entrants looking for opportunities will have to find them in emerging Ecommerce 2.0 models.
Pomelo Fashion, Sale Stock Indonesia (Indonesia)
4. Cross-Border E-Commerce Will Be Driven By Silk Road 2.0, Not AEC
Despite all the media hype and lofty expectations, the ASEAN Economic Community (AEC) will not have a significant impact on e-commerce in 2016.
Governments are too fragmented on policy; coupled with the immediate growth opportunity within the domestic markets, it doesn’t make sense to focus on cross-border within ASEAN, as evidenced by companies such as Lazada and MatahariMall doubling-down on Indonesia’s e-commerce opportunity.
Cross-border e-commerce in 2016 will be driven mainly by what we call “Silk Road 2.0.” These are Greater China-based companies that will bring their products into Southeast Asia, laying the foundation for our generation’s version of the Silk Road and attempting to expand China’s soft power and hegemony through commerce and digital.
Alibaba, JD, merchants selling on Facebook and Instagram who source their products from China
5. Payments: COD Will Continue Its Reign While Third-Party Payments Struggle
The next double-digit billion dollar opportunity in Southeast Asia e-commerce is the third-party online payment space. US has PayPal and China has AliPay; what does Southeast Asia have?
Contrary to what many people believe, building a successful payment product isn’t about technology, it’s about distribution. Payment technology is a commodity; everyone’s building the same thing, including banks (SCB UP2ME), telcos (TrueMoney, PAYSBUY), media (LINE Pay, AirPay by Garena), retailers (helloPay by Lazada) and payment-focused startups (2C2P, Omise).
The hard part is distribution. How do you reach critical mass in order to cruise off network effects? Until this happens, COD will remain the dominant payment method in Southeast Asia. Based on aCommerce’s latest aggregated numbers, COD made up 74 percent of transactions in Southeast Asia, up from 53 percent the year prior. This validates the importance of COD to e-commerce in our region, and already exceeds the COD penetration rate at the height of its popularity in China back in 2008.
Eventually, COD will naturally reach its shelf life and be replaced by a “modern” third-party online payment product. Even then, the most likely scenario will be one leading payment product per country in Southeast Asia due to the region being fragmented.
Lazada, aCommerce
6. The Fizzle Of Fast Fashion E-Tailers We’ll see mass, fast-fashion players like Zalora struggle and either fizzle out or be rolled into cousin Lazada. People familiar with the history of e-commerce in China will see similarities between Zalora and VANCL. VANCL, a mono-brand fast-fashion retailer founded by Chen Nian (who sold his previous business, Joyo, to Amazon), rose to prominence in 2009, raised up to $570 million and even planned for an IPO, but then gradually faded away. Selling your own fashion products is less about retail economics and much more about brand building.
In addition, VANCL suffered from competition from Taobao merchants who sold similar products for higher quality at lower prices. Replace Taobao with Instagram and Facebook and you’ll understand the pain that Zalora and other mono-brand, mass-fashion retailers are going through in Southeast Asia.
Zalora
PAGE 187
Future of Ecommerce in Thailand2016-2020 predictions
Source: Techcrunch, Tech in Asia, Business of Fashion
Prediction Why? Examples / Pioneers
7. New Channels Will Emerge To Challenge Google And Facebook’s Dark Side
Unfortunately for e-commerce players in our market, the range of channels available is quite limited due to historical and socio-economic factors unique to Southeast Asia. The appearance of a “no-tail” landscape in terms of publishers severely hampers the effectiveness of traditional tools, such as affiliate marketing and programmatic display.
In Southeast Asia, players are already exhausting the “usual suspect” channels, such as Google Search, Facebook and Criteo, with the result being CPCs rising to all-time highs and companies tapping into offline marketing to seek better returns. This is Andrew Chen’s “Law of Shitty Clickthroughs” in full effect.
Companies and savvy entrepreneurs will start addressing this gap by designing and building new demand-generation platforms to offer an alternative to the Googles and Facebooks out there. Expect to see more e-commerce firms adding channels such as price comparison, coupon sites and cash-back sites, as well as innovative affiliate marketing solutions to balance their media mix.
Priceza, ShopSmart, Shopback
8.The Battle For The Last Mile Continues As 3PLs Fail To Adapt
Companies like Lazada (LEX), MatahariMall and aCommerce are investing in building out their own delivery fleet in order to help relieve the industry-wide capacity issues and serve the anticipated record-breaking transaction volume. The pressure will only become bigger in 2016 as transaction volume is expected to hit record highs in Southeast Asia.
Challenges with last-mile delivery in Southeast Asia, if not addressed properly, will become the biggest bottleneck to e-commerce growth in the region. The industry is currently witnessing industry-wide capacity bottlenecks beyond what the JNEs, Kerry Logistics and DHLs of this world are able to handle.
Part of this is the poor infrastructure to begin with. China, the world’s largest e-commerce market, never really had this issue because of the socialist and central government mindset of prioritizing infrastructure investments. By the time e-commerce took off, the infrastructure was already there, which resulted in last-mile delivery becoming a commodity service.
Also, many existing delivery companies were never built for B2C deliveries to begin with. Their core competencies are in B2B deliveries, which typically don’t face B2C headaches, like returns management, reverse logistics, pre-calling, multiple delivery attempts and cash on delivery.
Lazada Express, aCommerce, MatahariMall (Indonesia)
9. Channel Management Will Be The New “Programmatic” Ad Agencies Still Stuck In 2011
The real “programmatic” opportunity in Southeast Asia will be in e-commerce, not in display advertising. With the advent and fragmentation of online marketplaces, the challenge for brands will be to choose on which channels to be present and what products to push in each of these channels.
Business of Fashion predicts a near future where the retailer/vendor relationship will begin to look a lot more like a media buy than the wholesale product purchase agreement of today. Physical stores have the potential to be the most powerful and effective form of media available to a brand because it offers an experience, which if crafted properly, cannot be replicated online.
Branch8, aCommerce
10. The Talent War Will Inflate Salaries Faster Than Uber’s Valuation
One of the biggest issues faced by all e-commerce players in Southeast Asia is the lack of talent. In 2015, it was common to see employees being poached left and right with new salaries of 1.5-3x. Obviously, this isn’t sustainable, but it is the current foundation of the talent war in Southeast Asia.
PAGE 188
Future of Ecommerce in Thailand2016-2020 predictions
Source: Techcrunch, Tech in Asia
Prediction Why? Examples / Pioneers
11. B2C Bloodbath Will Drive Consolidation
Retail B2C is a winner-takes-all market. Players with the most long-term view and deepest pockets will survive. In US and China, B2C ecommerce has boiled down to a 1-2 player game (Amazon, JD, Tmall). SEA and Thailand are still fragmented but we’ll expect to see 1-2 clear leaders to emerge over the next five years as funding runs out for B2C and investors will look for returns, not growth.
• WhatsNew (Petloft, Venbi, Sanoga, Lafema) acquiring Moxy
• Moxy merging with Indonesia’s Bilna to become Orami
• Cdiscount sold to BJC (Asiabooks, Berlivery)
• Zalora Thailand and Vietnam sold to Thailand’s Central Group
12. C2C game will shift towards mobile, leaving behind traditional C2C platforms
Traditional C2C platforms like Tarad and WeLoveShopping have been running out of steam as they missed the shift towards mobile. With an estimated 1/3 of total Thailand ecommerce GMV happening on Instagram and Facebook, and supported by LINE messaging, Thai users have become accustomed to buying and selling on mobile. Mobile-only C2C platforms like Shopee and Line Shop have leveraged this opportunity to stake their claims and take C2C marketshare away from the desktop only platforms.
Shopee, Line Shop, Carousell (Singapore, Indonesia)
PAGE 189
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