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Category: Research

Retail News Asia is committed to providing both local and global retailers with the latest Research throughout the Asian market. This on a daily base.

  • Beware the Internet of Unpatchable Things: Akamai

    Beware the Internet of Unpatchable Things: Akamai

    A recent spate of attacks involving attackers using IoT devices to remotely generate attack traffic by using a 12-year old vulnerability in OpenSSH have been discovered by researchers at Akamai Technologies.

    Akamai notes that the research and subsequent advisory do not introduce a new type of vulnerability or attack technique, but rather a continued weakness in many default configurations of Internet-connected devices. These devices are now actively being exploited in mass-scale attack campaigns against Akamai customers.

    The Threat Research Team said it has observed incidents of what it has called SSHowDowN Proxy attacks originating from the following types of devices:

    • CCTV, NVR, DVR devices (video surveillance)
    • Satellite antenna equipment
    • Networking devices (e.g. Routers, Hotspots, WiMax, Cable and ADSL modems, etc.)
    • Internet connected NAS devices (Network Attached Storage)

    Compromized devices are being used for mounting attacks against a multitude of internet targets and internet-facing services, such as HTTP, SMTP and Network Scanning. It is also being used to launch attacks against internal networks that host these connected devices.

    Once malicious users access the web administration console, they have been able to compromise the device’s data and, in some cases, fully take over the machine.

    “We’re entering a very interesting time when it comes to DDoS and other web attacks; ‘The Internet of Unpatchable Things’ so to speak,” explained Ory Segal, senior director for threat research at Akamai.

    “New devices are being shipped from the factory not only with this vulnerability exposed, but also without any effective way to fix it. We’ve been hearing for years that it was theoretically possible for IoT devices to attack. That, unfortunately, has now become the reality.”

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  • Take a bite out of the Indonesian digital pie

    Take a bite out of the Indonesian digital pie

    Recent research has highlighted the potential increase in digital ad spend in Indonesia over the next five years. Brands yet to venture into Indonesia’s booming digital ecosystem must expedite their entry strategies to ensure getting a share of this lucrative pie.

    A report has highlighted the growing potential of digital retail from Indonesia. This is attributed to the increasing use of mobile devices, especially with cheaper smartphones enabling a greater population to access the digital sphere. This rapid growth projects digital ad spending to increase to 20.4% of all media ad spending by 2018, up from 10.7% in 2016. This report illuminates the expanse of Indonesia’s digital ad market that could be further developed, and have an emergent interest in the technology amongst local advertisers.

    With the largest population in Southeast Asia, an exponential increase in digital adoption, and a seemingly insatiable appetite for e-commerce and social media, Indonesia is the puzzle every brand wants to solve.

    However, does this mean the death of the traditional advertising and offline retail? Are you as a marketer confident in leaving your brand in the hands of the bots?

    While digitisation has revolutionised the marketing function in Indonesia, brands cannot assume that a digital presence is the solution to building market share. Because of the increase in digital ad spending cited above, the question of effective brand engagement is more crucial than ever.

    So what can brands do to continue engaging their consumers beyond their finger-tips and into their hearts and minds? And more importantly, how can you build loyalty in a competitive market like Indonesia?

    Going beyond Digital

    The consumer journey is not limited to just the digital sphere. Rather than situating offline and online as extreme entities, they should be treated as a continuum. Take the example of Zalora. Marketed as the leading online apparel retailer in Asia, Zalora launched several pop-up stores in order to let consumers try their items before buying, thereby reducing return rates.

    Strategic alliances between logistic services and e-commerce consumer brands like Zalora are revolutionising the customer experience. The traditional is not dead. It is revamped with renewed excitement. Digital is an essential medium for marketers to reach out to their audience. This is more so imperative in the emerging scene of digital marketing in Indonesia to start with the right foot in.

    To take a first-hand look at how leading marketers are tackling Indonesia’s digital frontier, be involved in Digital Marketing Indonesia that is happening on 24th and 25th November at Mandarin Oriental, Jakarta.

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  • Great Potential in Indonesia’s Modern Retail, Food & Beverage Sectors

    Great Potential in Indonesia’s Modern Retail, Food & Beverage Sectors

    In 2017 turnover in Indonesia’s processed food and beverage industry is expected to grow by 8 percent (y/y) to IDR 1,400 trillion (approx. USD $108 billion) from an expected IDR 1,300 trillion in 2016. Meanwhile, the nation’s modern retail industry is projected to expand in the range of 10 – 15 percent (y/y) to IDR 225 trillion (approx. USD $17.3 billion).

    Tutum Rahanta, Deputy Chairman of the Indonesian Retailers Association (abbrev. Aprindo), says the combination of accelerating macroeconomic growth and controlled inflation are the main supporters for growth of Indonesia’s modern retail sector. In 2016 Indonesia’s gross domestic product (GDP) is expected to expand by 5.1 percent (y/y) up from the realization of 4.79 percent (y/y) in 2015. Recently, the World Bank announced it sees the Indonesian economy growing further by 5.3 percent in 2017 and 5.5 percent in 2018.

    Aprindo Chairman Roy Nicholas Mandey added that after several years of economic slowdown, the retail sector of Indonesia has been recovering in 2016 on the back of low domestic energy prices (electricity, gas and fuel), the stronger rupiah exchange rate (versus the US dollar), rising government spending (on infrastructure development), low inflation (around 3 percent y/y), and accelerating economic growth. Due to these factors members of Aprindo have been eager to expand their businesses this year.

    Based on a Bank Indonesia (BI) survey, Indonesia’s retail sales grew 14.4 percent (y/y) in August 2016, supported by sales of non-food items, extending the promising trend recorded in the preceding month (retail sales growth at +15.7 percent y/y). However, this survey also signals that retailers expect retail sales to slow in November 2016 due to rising inflation (a seasonal phenomenon).

    Adhi Lukman, General Chairman of the Indonesian Food and Beverage Association (GAPMMI), agrees and expects the processed food and beverage Industry of Indonesia to rise by at least 8 percent (y/y) provided the government will not implement any policies that could undermine this growth (for example, the government once uttered the idea to implement a plastic excise tax). Besides the five above-mentioned factors, Lukman added that rebounding commodity prices also boost people’s purchasing power.

    Lukman is also optimistic that direct investment in Indonesia’s processed food and beverage industry will surpass IDR 50 trillion in 2016, up 16 percent from IDR 43 trillion in 2015. However, investors urge authorities to lower interest rates as that would make business expansion much more affordable. Lukman emphasized that Indonesian authorities need to be consistent and committed (for example through effective implementation of the economic policy packages) in order to support this industry and thus be able to compete with counterparts in Malaysia and Thailand.

    Indonesian Modern Retail Industry:

    2013 2014 2015 2016¹ 2017¹
    Turnover
    in IDR trillion
    		  148  168  181  200  225

    ¹ indicates forecast

    Indonesian Food & Beverage Industry:

    2015 2016¹ 2017¹
    Sales
    in IDR trillion
    		 1,209 1,300 1,404

    ¹ indicates forecast

  • Telecoms billing market on pace to $14b in 2022

    Telecoms billing market on pace to $14b in 2022

    The global telecom billing and revenue management market is expected to reach$14.2 billion in 2022 with a CAGR of 8% from $7.6 billion in 2014.

    The factors that are favoring the market growth include, hastily growing telecommunication sector, deployment of innovative services and increasing number of customers, whereas factors such as quick growth of subscribers, network clogging, plunge in quality of services, and fallout of services area are inhibiting the market growth.

    North America and Europe have the highest adoption of billing and revenue management in the telecom ecosystem and regions such as Asia-Pacific, Middle East and Africa along with Latin America offer a lot of opportunities for the vendors.

    Countries in Asia Pacific such as China and India have large subscriber bases and ever changing regulatory scenarios, thus creating demand for billing and revenue management solutions.

    The global telecom billing and revenue management market is segmented on the basis of deployment type, service, software, and geography. On the basis of deployment, the market is segregated into on-site and cloud.

    On the basis of service, the market is categorized into system integration, planning and consulting services, operations and maintenance services, managed services and others. The market is segmented on the basis of software into negotiation, revenue assurance, partner management, fraud management, billing and charging and others.

    The key players in the global telecom billing and revenue management market include Accenture, Cisco, Oracle, Ericsson, Hewlett-Packard (HP), SAP, Huawei Technologies, NEC, Amdocs and Comverse.

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  • Public cloud market set to grow 17% in 2016

    Public cloud market set to grow 17% in 2016

    The worldwide public cloud services market is projected to grow 17% in 2016 to $208.6 billion, according to Gartner.

    The highest growth will come from IaaS, which is projected to grow 43% in 2016. SaaS, one of the largest segments in the global cloud services market, is expected to grow 22% in 2016 to reach $38.9 billion.

    “There’s no question there is great appetite within organizations to use cloud services, but there are still challenges for organizations as they make the move to the cloud,” said Sid Nag, research director at Gartner. “Even with the high rate of predicted growth, a large number of organizations still have no current plans to use cloud services.”

    IT modernization is currently the top driver of public cloud adoption, followed by cost savings, innovation, agility and other benefits. The focus on IT modernization indicates a more sophisticated and strategic use of public cloud services.

    Security and/or privacy concerns continue to be the top inhibitors to public cloud adoption, despite the strong security track record and increased transparency of leading cloud providers.

    Most organizations are already using a combination of cloud services from different cloud providers. While public cloud usage will continue to increase, the use of private cloud and hosted private cloud services is also expected to increase at least through 2017.

    The increased use of multiple public cloud providers, plus growth in various types of private cloud services, will create a multi-cloud environment in most enterprises and a need to coordinate cloud usage using hybrid scenarios.

    Although hybrid cloud scenarios will dominate, there are many challenges that inhibit working hybrid cloud implementations. Organizations that are not planning to use hybrid cloud indicated a number of concerns, including integration challenges, application incompatibilities, a lack of management tools, a lack of common APIs and a lack of vendor support.

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  • How 3D printing will shake up the supply chain

    How 3D printing will shake up the supply chain

    Consumers today are already familiar with personalizing their favorite treats by molding them into unique shapes or printing edible messages on cakes, chocolate and flowers, among others. What if you could customize any product in the future to suit your preference – from shoes to even houses? While some may perceive this to be a pipe dream, the fact is that this is actually a reality. New Balance just introduced 3D printed shoes last April, and in China, Huashang Tengda successfully built a two-storey house in just under two days!

    3D printing is also known as additive manufacturing, a process that allows us to seemingly create objects such as bicycle frames and toys out of thin air. Manufacturing and supply chains have typically been all about assembly lines, warehousing and shifting products outwards from the point of manufacture. 3D printing is now revolutionizing the way products are manufactured and distributed.

    With the advent of 3D printing, individualized products can be designed, produced, delivered, and serviced in new ways. To start, organizations can leverage a product innovation platform that supports direct communication with customers and network partners from conceptualization to production. Consumers today love to customize everything and anything, and 3D printing makes this both possible and affordable. Organizations can now evolve beyond demand-driven supply chains to enable demand-driven manufacturing, furthering customer centricity and personalization.

    3D printing is also transforming the manufacturing industry, making it more digitized and in the process throwing out all the traditional rules of the game. Essentially, 3D printing changes who is in control. Analog manufacturing used to be the realm of huge companies that have the resources to invest and produce large quantities of the same good. These companies need to have the capital to support research, prototyping and focus groups to identify products that will please the critical mass, and marketing to promote that same product to large volumes of consumers. On top of that, delivering the products to consumers requires complex supply chain and retail channels.

    In contrast, 3D printing allows complex items to be produced on demand, eliminating the need for assembly lines. With 3D printing, the supply chain has the potential to become more efficient, more local and globally connected. Manufacturers are using 3D to respond to dynamic, real-time customer demands, reduce inventory and slice into transportation costs while dramatically compressing the time needed to ship products.

    Imagine this: Without the need for huge capital outlay, manufacturers do not need to set up factories at permanent locations. All manufacturers need is a 3D printer in local markets or regional production hubs, solving a number of large problems. The ability to bring manufacturing local will provide a way to significantly reduce carbon footprint. If you add the benefits of timeliness, cost reduction, and the freedom to print multiple materials and properties, you start to understand the impact 3D printing can have on society.

    Supply chains have a reputation for being boring, complicated, and uninteresting. But with the advent of the digital economy and 3D printing technologies, all of this is about to change. As the digital supply chains become both disruptive and important within the next few years, supporting the supply chain and the manufacturing floor to boost productivity will have ripple effects throughout any industry. The future of supply chain will be more collaborative and integrated with suppliers, retailers and even product planning and design.

    Where supply chain used to be the most inelastic piece in the journey from manufacturing to customer delivery, 3D printing will be the catalyst and enabler to reimagine a supply chain that can dynamically respond to customer requirements and expectations. In addition, we are going to see more of these advanced efficiencies permeating production activities as 3D printing continues to rise past the hype and into everyday manufacturing.

    In 2013, Wohlers Associates, a consulting firm that specializes in 3D printing, predicted that the sector would grow to $10.8 billion by 2021. The firm now forecasts even greater and faster growth, with the industry reaching $21.2 billion in 2020. That’s because while the firm is skeptical about the value of low-end, consumer-oriented printers, they are positive that more and more industrial clients – especially manufacturers – will be buying and implementing high-end, expensive 3D printers.

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  • Smartphone sales growth continues to slow

    Smartphone sales growth continues to slow

    The global smartphone market is on track to grow just 4.5% during 2016, rocked by a decline in sales in the premium segment, Gartner predicts.

    The research firm estimates that premium smartphone sales will decline 1.1% for the year, with owners having less incentive to upgrade to the latest models.

    Overall smartphone sales are on track to reach 1.5 billion units in 2016. While the market is slowing as smartphones reach global saturation, Chinese vendors are stimulating sales in the Android segment of the market by offering more affordable premium devices.

    But Gartner expects the market for premium smartphones to return to 3.5% growth next year as stronger replacement cycles emerge.

    The predicted upswing is also in anticipation of Apple’s expected launch of a new iPhone with a new design and features attractive enough to convince smartphone owners to upgrade.

    Total mobile phone shipments are meanwhile on place to fall 1.6% in 2016, while tablet sales are set to decline from 196 million units in 2015 to 177 million in 2016.

    Worldwide combined device shipments – which also include PCs, laptops and related devices, are expected to decline for the second consecutive year, falling 3% to 2.34 billion units.

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  • APAC consumers shop more on mobile

    APAC consumers shop more on mobile

    Mobile users in APAC purchase more frequently from their devices, but are less satisfied than their counterparts elsewhere, according to a new survey.

    The in-depth survey of mobile users from around the world was conducted by the Interactive Advertising Bureau (IAB).

    APAC consumers take the lead

    The IAB surveyed 3,800 respondents in 19 countries, including regional countries such as Singapore, China, Japan and Australia, and found that APAC consumers take the lead in frequent mobile purchases.

    Specifically, a third of mobile users make a weekly purchase on mobile in APAC, which is higher than the worldwide average of a quarter of mobile users. China in particular boasts of a 47% weekly purchase rate on mobile.

    On the flip side, respondents in APAC are 50% more likely to have a previous negative purchase experience, with only three in four consumers satisfied with their mobile purchase in the region compared to four in five globally.

    As a result, APAC consumers are also 11% less likely to make a repeat mobile purchase in the next 6 months, says the IAB report.

    The findings underscore the need for marketers in the region to be more transparent in their marketing efforts, and to address the negative purchase experiences cited as a key barrier to repeat purchase.

    “Many markets in APAC are mobile-first, and consumers are now mature online buyers with more discerning tastes than the global average,” says Miranda Dimopoulos, CEO IAB Singapore.

    “Advertisers who make an effort to understand their needs and craft the right messages have a tremendous opportunity to cut through the noise and seize market share.”

    “While mobile purchasers are high in APAC, poor buying experiences have dampened initial enthusiasm,” says Regina Goh, IAB mobile committee chair and managing director at ad-tech provider Blis. “Sellers in the region need to consider the consumer’s journey from the first click to post-purchase to ensure customers are delighted and come back for more.”

    The full IAB report can be downloaded here.

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  • More than half on online viewing done on mobile devices

    More than half on online viewing done on mobile devices

    Mobile devices, for the first time, now account for more than half of all online viewing, and compares video engagement between iOS versus Android users, according to the second-quarter 2016 Global Video Index from Ooyala.

    The report continues a quarterly analysis of the growth of programmatic trading, as well as highlights how subscription services can reduce churn.

    Findings show that heavy users visit advertising video-on demand (AVOD) news sites 37% more during the work week than on weekends, according to the second-quarter.

    These “power users” also prefer computers to consume content for longer periods, compared to the average user who uses a mobile phone.

    As for AVOD entertainment sites, power users watch 17% more content on Thursdays and Fridays than Monday through Wednesday, and 37% more than on Saturday and Sunday.

    Also, for subscription VOD (SVOD) entertainment sites, 76% of power users visit two to three days a week, with peak viewing occurring Friday and Saturday. Mondays see the least traffic from power users.

    In transaction-based VOD (TVOD) sites, power users produce the slowest traffic early in the week, but on the weekend stream about 13 times more content than during the week.

    For the first time, mobile devices now represent more than half of all online viewing, reaching nearly 51%. This is a 15% increase from one year ago and 203% from 2014.

    Smartphones made up 43% of all video views, a 10% increase from one year ago, while tablets made up the other 8%, which is a 51% increase from the same time period.

    “The findings in the report further manifest the utmost importance of having a proper analytics solution that gives granular insight into your video business,” said Belsasar Lepe, Ooyala co-founder and SVP of products and solutions.

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  • Enhancing last mile delivery, consumer experience with SMS Services

    Enhancing last mile delivery, consumer experience with SMS Services

    E-commerce is a fast-moving game and major forces are changing the rules. Forward-thinking retailers are investing to maximize the potential of both physical and digital channels. Global players that once stood on the sidelines are now poised to compete in South East Asia. Just recently, Indonesian department store chain MatahariMal raised $500 million to develop their e-commerce venture. Alibaba too, has invested $249 million in SingPost to expand their delivery network in SEA.

    As the world’s fastest growing internet region with 260 million users, South East Asia is fast becoming a unique e-commerce market. Primed for tough competition, e-commerce companies are fast prioritizing customer service as a way to stand out from their competitors. Keeping customers at the heart of their business strategy, and delivering the best possible value to them is becoming more important than ever.

    Today, last-mile delivery has become a priority for both e-commerce companies and their customers. Ensuring speedy, but prompt delivery has been proven to give companies an edge in the competitive landscape, while showing customers that companies could go the extra mile for them.

    In fact, local and regional players have still emerged as early winners, largely due to their ability to provide a better-tailored experience for local consumers than what global competitors usually offer. For instance, Singapore-based Lazada built local logistics footprints in each market to increase delivery reliability, and added motorbike fleets to provide speedier options to traditional truck deliveries.

    That said, enhancing last-mile delivery for consumers in the region comes with its own set of challenges.

     Consumer trust, diversity, slow infrastructure serve as roadblocks

    Firstly, the lack of consumer trust is one of the challenges the Southeast Asian e-commerce market is facing. Consumers today are wary of making transactions online due to various security issues such as fraud. According to the e-conomy SEA report by Google and Temasek Holdings, 58 percent of citizens in South East Asia expressed concerns over financial information being shared online. With cyber attacks on the horizon, trust between customers and e-commerce companies have been shaken and today, assurances must be given to customers on a consistent basis to maintain strong relationships.

    The region also encompasses a wide range of ethnicities, languages, consumer preferences and regulations, coupled by a politically and economically complex landscape. With such diversity, consumers in different markets have conflicting preferences and expectations, which means more time and money must be invested carefully into business planning to ensure that this is addressed adequately.

    Despite the immensely positive steps taken towards ASEAN economic integration, there are still socio-political and economic issues that can put a dampener on overall business growth of regional delivery companies.

    Southeast Asia also lacks a solid regional payment and logistics infrastructure, which were the foundation for China’s astounding digital-retail growth. Even though larger businesses today are investing in the development of delivery infrastructure, they are still weak and getting your goods delivered affordably and efficiently may still be an issue. As a result, organisations often find it a challenge to make a scalable business model work, and to justify the high levels of initial investment.

    The use of SMS to represent reliability and optimization

    In order to manage deliveries in a reliable and robust manner while ensuring customer trust is being built, e-commerce companies are looking at the option of sending SMS notifications to customers, and are turning to SMS services to manage the surge in SMSs.

    SMS services have been selected over mobile apps as it is ideally equipped for both application-to-person (A2P) or machine-to-machine (M2M) applications. While not a popular choice of communication between people today, businesses still leverage SMS because it is always delivered even when customers do not have smartphones or data connection, representing reliability and consistency.

    This step is critical for business continuity as it helps to ensure continued trust with customers. To best manage their communication processes when it comes to delivery, e-commerce companies can consider working with a messaging solutions provider to create a reliable and efficient distribution process and enhance overall customer experience.

    By outsourcing their communication processes to messaging solutions, companies can efficiently manage the large volume of messages they send to customers and delivery partners, through unlimited scalability and transmission capacity.

    Through implementing SMS messaging services, delivery processes are more convenient and transparent for e-commerce companies, their business partners and customers. SMS services can not only be used during the registration process to authenticate customers’ account mobile numbers, but also more importantly, update recipients on specific parcel delivery information such as estimated time of arrival.

    By selecting a provider with high quality of service, reliability, security levels and transparency, e-commerce companies can experience increased customer and partner satisfaction as communication becomes more efficient with important messages being sent and delivered in seconds.

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  • Digital Revolution to Add $150b to Indonesia’s Economy by 2025

    Digital Revolution to Add $150b to Indonesia’s Economy by 2025

    Digitalization is expected to boost productivity, especially in five major sectors: manufacturing, retail, transportation, mining and agriculture.

    “Just as an example, a digital procurement system can predict demand for equipment in a factory and suggest replacements when necessary. Predictive maintenance can reduce machine downtime by 25 percent to 70 percent,” Tan said.

    According to McKinsey’s estimation, the manufacturing sector in Indonesia can earn an additional $34 billion from digitalizing its operations over the next decade, while mining and agriculture can see up to $15 billion and $11 billion in additional output respectively.

    Better stock and route management enabled by technologies like Google Maps can provide an extra $24 billion to Indonesia’s retail industry and $16 billion to the transportation sector. Other sectors like telco and media, healthcare, utilities and finance can boost their earnings by up to $21 billion, McKinsey claims.

    To unlock these potentials, Indonesia needs to improve its information technology infrastructure, broadband affordability and regulatory support.

    The study shows that Indonesia — although it has the second cheapest internet among the 20 countries studied — still struggles with poor connection, narrow bandwidth and slow speed. Overall, Indonesian is ranked 18 on a list that includes Malaysia, Singapore and other Asean states — all ranked above it.

    “E-commerce in Indonesia is growing rapidly but is constrained by limited access to technology, lack of tech-savviness and not enough credit cards,” Agung Nugroho, an e-commerce expert, said as quoted by McKinsey.

    According to McKinsey, Indonesian businesses should create cross-channel business models to encourage online and offline sales.

    Other strategies include establishing a two-fold cyber protection system, leveraging big data to drive real-time access across value chains and focusing on a customer-centric experience — coming up with innovative products and services to keep customers loyal.

    The study also suggests that digitalization can happen quicker if companies build strong and dedicated technology departments that integrate operations in all divisions of their businesses.

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  • Global e-commerce grocery market has grown 15% to $48bn North Asia

    Global e-commerce grocery market has grown 15% to $48bn North Asia

    Sales of groceries through e-commerce platforms reached $48 billion in the 12 months to June 2016, according to a new report by Kantar Worldpanel, published today.

    The third annual Future of E-commerce in FMCG study shows that e-commerce now accounts for 4.4% of all FMCG sales. Whilst the e-commerce channel is growing, the FMCG market as a whole is flat, increasing just 1.6% during the same period.

    Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel, comments: 

    “FMCG growth is slowing, but our data shows that people are looking for more convenience, which can be met by shopping online. Grocery e-commerce, although currently small, with only one in four people shopping online, is growing fast. We forecast it will grow to 9% of the market and be worth $150bn by 2025. With new entrants such as Amazon expanding rapidly, the industry is facing a shake-up.”

     

    “Although online sales have the potential to cannibalise in-store sales, it is vital that retailers act quickly to develop a strong e-commerce presence.  The retailer that goes online first in each market can enjoy a far higher market share – this can be a difference of at least 40% in France and up to three times more in the UK. In this report we’ve looked at how retailers and brands are finding ways to work across all channels.” 

    Rank

    Country

    E-commerce share of market 2016 (value)

    1

    South Korea

    16.6%

    2

    Japan

    7.2%

    3

    UK

    6.9%

    4

    France

    5.3%

    5

    Taiwan

    5.2%

    6

    China

    4.2%

    7

    Czech Republic

    2.1%

    8

    Spain

    1.7%

    9

    The Netherlands

    1.7%

    10

    USA

    1.4%

    Key findings from the report include:

    Global hotspots: a puzzle of performance

    E-commerce growth is not equal around the world and is not explained by connectivity.  It might not be surprising that digitally developed South Korea is the world’s largest online FMCG market by value share (16.6%). In the USA however, only 1.4% of groceries are bought online. China is the market which saw the biggest growth in the last 12 months, 47% – to a value share of 4.2%.  Europe has a relatively low adoption of e-commerce in all countries except the UK with 6.9% of the market and France which has 5.3%. France is a relatively unique e-commerce market as their success is with the Drive model whereby the online shop is collected from the store. Adoption across Latin America is currently very low with the exception of Argentina at 1%.

    Online generates more loyalty

    Once shoppers have begun shopping online they are more likely to continue doing so. Among this group in the UK, almost a quarter (23.3%) of all spend is through e-commerce, resulting in fewer trips to physical stores. 

    Impulse needs encouraging

    Comparative research across the UK, France and China has shown that one year after starting to shop online, shoppers in the UK and France spent less overall (-2.4% and -1.4% respectively), this is because there is less impulse shopping.  Brands need to work on driving impulse purchase online – for example by making suggestions for complementary products. In China, 50% of FMCG’s online sales is beauty, it is seen as a prestige occasion and they actually had an increase in sales after one year (+8.1%).

    Online shopping baskets are usually bigger

    Shoppers generally spend more per trip online than they do offline, so potentially this could be a lucrative group to win.  In the UK for example, the average shop online is $59 compared to $15 in-store.

    Brands that make it onto online shopping lists are more likely to stay there

    Kantar Worldpanel data shows that 55% of online shoppers use the same shopping list from one purchase to the next.  Brands need to focus their efforts on getting onto that list.

  • Marketers prefer prudent spending on mobile advertising

    Marketers prefer prudent spending on mobile advertising

    While penetration of smartphones and mobile services continues to increase in Asian markets, mobile advertising is not as prevalent as is assumed. Brand owners still allocate a substantial amount of money to advertise on conventional media.

    According to data from the Asia Pacific branch of the Mobile Marketing Association (MMA), the average company in Asia will spend only 7 to 10 percent of their marketing budgets on mobile advertising despite rising smartphone usage across the region.

    This is particularly apparent in Indonesia as some companies increase focus on mobile advertising, but it does not necessarily translate to higher marketing dollars.

    MMA Asia Pacific managing director Rohit Dadwal explained that despite an increased percentage in mobile ad spending, the format would likely end up as the third-largest ad platform in Indonesia after television and radio in the coming years due to the size and reach of conventional media in the country.

    Dadwal explained that the average brand in Indonesia allocated between 14 and 15 percent of their marketing budget for mobile-based advertising and spent the remaining budget on broader platforms, such as television, which is considered the most popular advertising platform in Southeast Asia’s largest economy.

    Currently, in terms of an overall advertising budget, not a lot of local brands have moved into mobile marketing, as the share has yet to reach 5 percent of the marketing industry.

    “The main effect of the rise of mobile usage is that companies will start to allocate more money for mobile advertising from their budgets little by little, from 10 to 20 percent currently to about 30 percent in the near future,” Dadwal said during a recent discussion in Jakarta.

    A suitable strategy for mobile marketers, he added, is not to look at the landscape as a place where mobile advertising will triumph over other media but to see both mobile and more traditional media as integrated platforms where marketing campaigns can run parallel with each other.

    “It’s no secret that mobile advertising poses a threat to other forms of advertising. However, to succeed in marketing today, you shouldn’t use a completely mobile strategy. You need a marketing strategy that includes mobile because it will help you with your overall marketing objectives in the end,” Dadwal said.

    Previously, client leadership partner of Mindshare Indonesia media agency Wendy Soeweno commented that brands, conventional or digital, would still focus on television and radio advertising because of the scope and range television and radio provide in Indonesia.

    Television and newspapers used to be the biggest recipients of advertising spending. The tide is turning. Digital ads are poised to take 25 percent of ad spending in Indonesia by 2019 from 7.3 percent in 2015, according to forecasts by eMarketer.

    Digital ads almost tripled to US$835 million in 2015 from $234.2 million in 2013 and the figure is expected to increase more than four times to $4.9 billion by 2019.

    “We believe that communicating with consumers through the digital world is significant to building our brand,” corporate secretary of Unilever Indonesia Sancoyo Antarikso said recently.

    Unilever, one of the country’s biggest spenders on advertising, has been intensifying the placement of its product commercials through Google’s video sharing platform YouTube.

    In terms of strategies, Dadwal elaborated on how the integrated mobile-conventional approach was working currently and acknowledged that there could be a major shift to mobile marketing happening in the future.

    According to a joint study by Google and Singaporean investment company Temasek, Indonesia is poised to have the fourth-largest amount of internet users in the world with 215 million people connected by 2020. Meanwhile, smartphone usage in Indonesia currently includes approximately 43 percent of the population.

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  • Cyber attacks on the rise in Singapore

    Cyber attacks on the rise in Singapore

    Cyber attacks in Singapore are on the rise, with 72% of CIOs detecting more now than 12 months ago, according to research commissioned by specialist recruiter Robert Half.

    Findings show that 85% of Singaporean CIOs expect their companies will be attacked more often because they lack skilled IT security talent – well above the 78% average of the eight countries surveyed.

    The only two countries with a higher percentage than Singapore are Brazil (93%) and Japan (87%).

    Singapore has the highest percentage of CIOs predicting “significantly more” cyber-attacks in the next five years – 30% compared to the global average of 19%.

    “The fight against rising cyber threats is entering a critical phase as Singapore is experiencing a shortage of IT professionals with the right cyber security skills to defend companies against these attacks,” said David Jones, senior managing director of Robert Half Asia Pacific.

    “Companies know they need to take action to confront cyber attackers,” said Jones. “This means investing in a cyber-security strategy that brings together the right mix of technology and people.”

    IT leaders say the top three cyber security risks facing Singaporean organizations in the next five years are data abuse/data integrity (59%), spying/spyware/ransomware (54%) and cybercrime (53%).

    “New technologies raise new security concerns,” said Jones. “This can result in a skills gap where the available expertise has not kept pace with the evolving IT threats.”

    “As demand for new cyber-specialists entering the IT market outstrips supply, companies are being forced to reconsider their training and retention programs,” he said. “They are also recruiting from overseas, partnering with educational organisations, and developing flexible hiring strategies that include both permanent and contract specialists, including external risk agencies.”

    In response to the new wave of cyber-attackers, almost a quarter (23%) of Singaporean CIOs plan to add new permanent IT security professionals to their team in the next 12 months. One in three (29%) say they are planning to hire IT professionals for newly added contract positions within their team.

    Several specialised cyber-security roles are in high demand as organisations are confronted with additional security threats, including mobile, application and Big Data analytics security.

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  • GSMA details industry’s impact on UN SDGs

    GSMA details industry’s impact on UN SDGs

    The GSMA has published the first research into the global mobile industry’s contribution towards helping the UN achieve its sustainable development goals (SDGs).

    Prepared by Deloitte, the report also details several industry commitments and explores ways the industry can strengthen its impact on the goals.

    According to GSMA director general Mats Grannyd, the report will establish a benchmark for the industry’s progress in contributing to the goals and can serve as a blueprint for other industries to follow.

    The UN last year established a set of 17 goals for countries to achieve by 2030. These include eliminating poverty and hunger, achieving gender equality, building sustainable cities and communities and transitioning to affordable and clean energy.

    The report finds that the mobile industry impacts all 17 goals to varying degrees, with the greatest effects being felt in the goals covering industry, innovation and infrastructure, as well as no poverty, quality education and climate action.

    For example, the mobile industry has given more than 400 million people access to financial services through their phones in 90 countries. The industry has committed to developing new mobile money products for unbanked consumers in developing markets.

    On gender equality, 18 operators with a combined 90 million customers have so far joined the Connected Women Commitment Initiative, which aims to close the gender gap in the use of mobile internet and mobile money services.

    Another UN SDG involves promoting decent work and economic growth. The GSMA noted that the mobile industry added $3.1 trillion in economic value to the global economy last year, representing 4.2% of global GDP, and directly or indirectly supported 32 million jobs.

    New industry commitments include elevating the mobile industry’s focus on humanitarian assistance, partnering with the UN Secretary-Gernal’s Special Adviser to create a roadmap for ongoing engagement with the goals and advocating sustainability principles linked to the goals.

    “As an industry, we are focused on connecting everyone and everything to a better future,” Grannyd said.

    “In February, the mobile industry was the first to unite in supporting the UN Sustainable Development Goals, and this report reiterates our commitment to ensuring that connectivity plays a key role in helping achieve the 17 goals by 2030.”

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