CHAIR CO-CHAIR RESEARCH PARTNER Dr. James T. Riady, Arthur Tan, A.T. Kearney CEO, Lippo Group CEO, IMI
Lifting-the-Barriers Roundtable Role of E-Commerce in ASEAN Integration (Retail) ABC Forum Presentation Singapore, September 8 th 2014
Roundtable Agenda Introduction and roundtable set-up Presentation by Geir Olsen, Partner at A.T. Kearney Perspectives from Chair and Co-Chair Floor discussion Closing remarks 2 A.T. Kearney - ABC Forum Presentation
Introducing today’s speakers Chair Co-Chair Moderator Dr. James T. RIADY Arthur R. TAN Geir OLSEN CEO, Lippo Group CEO, IMI Partner, A.T. Kearney Arthur R. Tan is the Chief Geir Olsen is Partner at Dr. James T. Riady is the Chief Executive Officer of IMI and a A.T. Kearney and Head of the Executive Officer of Lippo Group of Senior Managing Director of Ayala Consumer and Retail practice in Companies. Corporation Asia Pacific He is also the Founder and He is also the Chairman of Chairman of Pelita Harapan He led some of the firm’s largest the Semiconductor Electronics Educational Foundation and the Industries in the Philippines Inc. and most successful global client Deputy Chairman of The (SEIPI), a Director of Renewable relationships in consumer goods, Energy Test Center (RETC LLC). retail and high technology. Indonesian General Chamber of Commerce and Industry. Arthur R. Tan is a member of the Board of Trustees of Philippine Geir Olsen was also Managing As a member of the National Quality and Productivity Movement Director of A.T. Kearney Nordics Economic Council, Dr. James T. (PQPM) & Philippine Development region and a Senior Partner at a Riady contributed as part of the Foundation (PhilDev) major global advertising agency Special Advisory Team to the network. President of Indonesia. 3 A.T. Kearney - ABC Forum Presentation
Objectives and set-up of the roundtable Key objectives Set-up of the roundtable 1 Key facts on E-commerce Discuss role of E-commerce into in ASEAN ASEAN integration 2 Perspectives from Chair Review key barriers to and Co-Chair E-commerce growth in ASEAN 3 Discuss key interventions to drive Open discussion between participants E-commerce in the region 4 A.T. Kearney - ABC Forum Presentation
Roundtable Agenda Introduction and roundtable set-up Presentation by Geir Olsen, Partner at A.T. Kearney Perspectives from Chair and Co-Chair Floor discussion Closing remarks 5 A.T. Kearney - ABC Forum Presentation
In the past 5 years, the ASEAN online retail market has grown at a 14.1% CAGR with particularly strong growth in Indonesia ASEAN online retail market 1 growth (US$ Mn, 2008-2013) CAGR (%) 2,547 Key growth drivers 252 13% +14.1% 2,237 • High economic growth 2,024 221 384 15% • Changing consumer 187 1,753 335 preferences 293 164 510 55% 1,503 • Improvement in 411 252 1,316 143 321 technology options 137 217 243 189 147 648 10% • Regional government 596 58 610 526 alignment 449 405 753 7% 673 614 569 527 547 2008 2009 2010 2011 2012 2013 Philippines Malaysia Indonesia Thailand Singapore 1. Online retail market defined by all the sales of consumer goods to the general public via internet; online retailing market size here only covers Indonesia, Singapore, Malaysia, Thailand and Philippines 6 Source: Euromonitor, EIU, A.T. Kearney A.T. Kearney - ABC Forum Presentation
Retail E-commerce market is expected to keep growing across South East Asia in the coming years Indonesia online retail market forecast Example (2013-2018e, US$ Mn) 983 Key drivers 898 14% • Increase in internet users 810 - +20% year-on-year mainly due 699 to proliferation of cheap smartphones 608 • Expending middle class 510 - Rapidly grows discretionary spending • Entry of high profile players - e.g. Rakuten, Zalora, Sukamart etc... 2013 2014e 2015e 2016e 2017e 2018e 7 Source: Euromonitor, Financial Times, A.T. Kearney A.T. Kearney - ABC Forum Presentation
ASEAN integration is coming and will form one single market with a free-flow of goods, services and investments Benefits of ASEAN integration Free trade in goods (Eliminate tariffs, simplify procedures,…) Freer flow of Free trade in capital services (Facilitate capital market (Facilitate cross-borders access, …) interactions, …) ASEAN Economic Community Free flow of Free flow of skilled labor investment (Manage mobility, ease (Harmonize and streamline work permits issuance,…) investment policies, …) 8 A.T. Kearney - ABC Forum Presentation
E-commerce will play a key role in the integration of the ASEAN retail sector, providing major benefits across the value chain E-commerce benefits to major stakeholders • Access to > 600 million consumers in S.E. Asia Manufacturers (SMEs) • Promote local products to the international stage Value chain from production to sale • Provide an innovative medium to connect with consumers • Learn consumer behavior through data analytics Retailers • Optimize capex required to grow business Logistics • Access big revenue pie from E-commerce growth players • Access to more choices • Access to lower prices and better quality products Consumers • Offer maximum convenience 9 Source: A.T. Kearney analysis A.T. Kearney - ABC Forum Presentation
However challenges around culture, regulations & infrastructure need to be addressed to keep driving E-commerce growth Challenges among E-commerce stakeholders • Consumers preference for traditional store format Culture • SMEs manufacturers slow conversion to E-commerce mainly due to poor bandwidth, lack of financial support and concerns about security • Heterogeneous taxes and duties systems Regulation • Different legal approaches and political systems • Absence of independent regulators • Uneven technology infrastructure development • Undeveloped infrastructure in payment systems and data security Infrastructure • Large gap of logistics infrastructure between members 10 Source: A.T. Kearney A.T. Kearney - ABC Forum Presentation
Governments joint action is critical to make E-commerce a successful opportunity for ASEAN Illustration of actions taken by the European Union Example • Improved business and consumers Culture confidence by providing legal certainty Key benefits (Electronic Commerce Directive, 2000) • Increase in consumer revenues • Creation of new jobs • Improved administrative cooperation • Access to better products at Regulation • Protected intellectual property rights lower prices for consumers • Fought unfair business practices • Greater cultural and social exchanges • Access to new markets • Encouraged high-speed network investment beyond borders • Proposed an EU strategy on cyber security Infrastructure • Developed strategy for payment integration (card, internet and mobile) 11 Source: A.T. Kearney A.T. Kearney - ABC Forum Presentation
Discussion: How to lift the barriers of E-commerce in ASEAN? Preliminary levers to lift E-commerce barriers • Consumers habits • Manufacturers trust Culture “ A concrete measure from ASEAN • … governments would be to …” • Taxes and duties systems • Legal framework Regulation • Regulator • … • Technology “ It is crucial for future developments that • Payment systems and security Infrastructure retailers ...” • Logistics infrastructure • … 12 Source: A.T. Kearney A.T. Kearney - ABC Forum Presentation
Roundtable Agenda Introduction and roundtable set-up Presentation by Geir Olsen, Partner at A.T. Kearney Perspectives from Chair and Co-Chair Floor discussion Closing remarks 13 A.T. Kearney - ABC Forum Presentation
Perspectives from Chair and Co-Chair Chair Co-Chair Dr. James T. RIADY Arthur R. TAN CEO, Lippo Group CEO, IMI 14 A.T. Kearney - ABC Forum Presentation
Roundtable Agenda Introduction and roundtable set-up Presentation by Geir Olsen, Partner at A.T. Kearney Perspectives from Chair and Co-Chair Floor discussion Closing remarks 15 A.T. Kearney - ABC Forum Presentation
Discussion: How to lift the barriers of E-commerce in ASEAN? Preliminary levers to lift E-commerce barriers • Consumers habits • Manufacturers trust Culture “ A concrete measure from ASEAN • … governments would be to …” • Taxes and duties systems • Legal approaches Regulation • Regulator • … • Technology “ It is crucial for future developments that • Payment systems and security Infrastructure retailers ...” • Logistics infrastructure • … 16 Source: A.T. Kearney A.T. Kearney - ABC Forum Presentation
Roundtable Agenda Introduction and roundtable set-up Presentation by Geir Olsen, Partner at A.T. Kearney Perspectives from Chair and Co-Chair Floor discussion Closing remarks 17 A.T. Kearney - ABC Forum Presentation
Closing remarks 18 A.T. Kearney - ABC Forum Presentation
Recommend
More recommend
