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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.

  • Airport Authority Hong Kong creates new tender structure for anchor concessions

    Airport Authority Hong Kong creates new tender structure for anchor concessions

    Airport Authority Hong Kong (AAHK) will restructure its core category airside retail concessions in advance of a series of major tenders beginning late October or early November, The Moodie Davitt Report can reveal.

    There are currently three anchor concessions – liquor & tobacco, airside general merchandise, and perfumes & cosmetics, all held by DFS.

    As detailed by The Moodie Davitt Report in July, AAHK pledged earlier this year to refine the category and contract mix, promising “significant changes” to the concession structure to drive spending and improve the consumer experience at Hong Kong International Airport (HKIA).

    Since July, AAHK has been talking to potential retailers and conducting intensive consumer research with its passengers regarding the anchor licences. As a result, it has fine-tuned the contract packages.

    LIQUOR & TOBACCO AND PERFUMES & COSMETICS EXTENDED – BUT NO AIRSIDE GENERAL MERCHANDISE CONCESSION

    The core liquor & tobacco and perfumes & cosmetics concessions will be continued – but with important refinements. To spice up the traditional liquor & tobacco offering, AAHK plans to allow the new concessionaire flexibility to include other products. These include liquor & tobacco-related accessories, such as wineglasses and decanters, as well as upmarket gourmet items, for example fine teas and coffees. That concept proved highly popular with passengers during AAHK’s qualitative surveys.

    HKIA L and T

    The liquor & tobacco concession will be increased substantially both in terms of space and range, with the addition of liquor-related accessories and gourmet items

    To make the perfumes & cosmetics offer more attractive, AAHK plans to create a beauty and accessories “one-stop shopping destination”. That will involve combining perfumes & cosmetics with fashion accessories – the latter including sunglasses, fashion watches, small leathergoods, handbags and others. Those categories are currently sold through the airside general merchandise concession.

    HK P & C

    The perfumes & cosmetics concession will be extended to become a “beauty and accessories one-stop shopping destination”

    AAHK believes that the high penetration rate driven by beauty products can enhance the cross-selling potential of the two categories combined. Consumer feedback also strongly suggested that the categories are complementary.

    Critically, AAHK has decided to discontinue the airside general merchandise concession. The authority believes that given the airport’s extremely strong line-up of speciality stores and mono-brand boutiques, there is no need for the airside general merchandise concession. Instead it will allocate the best-selling general merchandise categories to the other packages.

    DEDICATED CONFECTIONERY CONCESSION

    In another key change, AAHK has opted to create a dedicated confectionery licence. Confectionery is a high-demand item at HKIA and the authority believes this justifies a separate concession covering multiple units across the terminal.

    hkia conf

    Confectionery, a big in-demand category, will enjoy its own dedicated concession

    The distribution and location of the stores will also see some important changes. For example, AAHK plans to remove the current small gate store units near the boarding gates. Because of the size constraints, the liquor & tobacco and perfumes & cosmetics assortments in them is limited. The units will be turned over to other retail purposes, deemed as better serving passengers’ needs.

    Simultaneously AAHK will increase the retail space in the East Hall – the shopping epicentre of the airport. Liquor & tobacco space there will increase by around +40%, while the addition of the fashion accessory categories will result in a huge +70% increase in the area dedicated to the extended beauty concession. More importantly, AAHK hopes that the additional floor space will allow the chosen retailers to introduce a wider product assortment.

    MORE DIVERSITY OF PRODUCTS; GREATER CONSUMER ENGAGEMENT

    In its consumer surveys, AAHK was told by many passengers that besides the big, upmarket European and US beauty brands they also wanted to see more variety – including the upcoming Korean and Japanese skincare names, most of them mid-price to premium price-points. In liquor & tobacco, consumers told AAHK they wanted to see more new and rare products.

    With the enhanced store sizes, AAHK will be asking its retailers to create greater customer engagement (for example, more wine tastings), which it deems as increasingly important to bricks and mortar stores. The enhanced space will also encourage greater flexibility, experimentation, rarity and excitement, it believes.

    TIME-LINE COUNTDOWN

    AAHK will begin the tender process with the liquor & tobacco and perfumes & cosmetics bids in late October or early November, with results being announced in March or April next year. Confectionery will be tendered in late 2016 or early 2017.

    The targeted changeover of concessions is set for the fourth quarter of 2017.

    NOTE TO AIRPORT OPERATORS: The Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport revenues, simply e-mail Martin Moodie at Martin@MoodieDavittReport.com.

    We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately.

    Similarly The Moodie Davitt Report is the only international business intelligence service and industry media to cover all airport consumer services, revenue generating and otherwise. We embrace all airport non-aeronautical revenues, including property, passenger lounges, car parking, hotels, hospital and other medical facilities, the Internet, advertising and related revenue streams.

  • SEA e-commerce revenue to pass $25b by 2020

    SEA e-commerce revenue to pass $25b by 2020

    Southeast Asian e-commerce revenues are likely to exceed $25 billion by 2020, Frost & Sullivan has predicted.

    This is more than double the $11 billion revenue in 2015, which the analyst firm said was achieved despite many setbacks as acquisitions, market exits and retailers’ struggles with profitability.

    New research, however, shows that growth will continue as the industry evolves.

    In 2015, Malaysia and Thailand were the largest e-commerce markets in Southeast Asia in 2015, generating revenues of $2.3 billion and $2.1 billion, respectively.

    Frost & Sullivan’s study, however, noted that both of these markets are expected to be eclipsed by emerging economies in Southeast Asia, including Vietnam and Indonesia.

    Meanwhile, total revenues from business-to-consumer (B2C) e-commerce in the six largest Southeast Asian countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – are projected to increase at a compound annual growth rate (CAGR) of 17.7%.

    “Despite being relatively young, the e-commerce market in Southeast Asia is developing quickly, thanks to the astounding rate of digital adoption in the region,” said Cris Duy Tran, lead consultant in e-commerce and digital transformation, at Frost & Sullivan Asia-Pacific.

    He said though that with fewer players in the market, e-commerce firms are beginning to compete beyond price points and logistics and moving into new areas such as Online-to-Offline (O2O) e-commerce and loyalty programs.

    Meanwhile, services such as Carousell, Tokopedia, and Shopee are aggressively pursuing a ‘mobile first’ strategy, and Frost & Sullivan expects to see more sector-specific services in areas such as travel, food delivery, and luxury goods.

    Challenges, however, remain such as low credit card ownership that stands at less than 7% in all Southeast Asia markets (except for Singapore and Malaysia).

    In some countries, more than 50% of the population does not have bank accounts, making payment the biggest challenge for e-commerce companies in the region. Logistics is another issue hampering e-commerce growth, especially in areas with complex geographies such as Indonesia and the Philippines.

    “The region is well-positioned for more M&A activities during the forecast period, and we expect to see more exciting market developments in the near future,” concluded Tran.

  • Indonesia to overtake Brazil and Mexico as 4th largest smartphone market in 2020

    Indonesia to overtake Brazil and Mexico as 4th largest smartphone market in 2020

    Global prospects for wearable electronics continue to be strong with retail value sales projected to grow by 138% to become a US$45 billion dollar industry in 2021, remaining the worlds second best-selling product behind smartphone

    Euromonitor International’s new data released Tuesday on the global consumer electronics industry also said new products like smart wearables and wireless speakers and innovations like Ultra HD and convertible laptops resonate with the shift in consumer preferences.

    These products command higher retail selling prices, helping boost profit margins of manufacturers and retailers, says Head of Consumer Electronics at Euromonitor International, Wee Teck Loo.

    While wearable electronics demand is growing, Emerging markets like India and Indonesia provide plenty of untapped opportunity for smartphones due to the huge pool of feature phone upgrades.

    Indonesia is projected to overtake Brazil and Mexico as the fourth largest smartphone market reaching almost $1 billion dollar sales in 2020, adds Loo.

    The top-10 smartphone markets in 2021 are projected to be: 1. China 2. India 3. US 4. Indonesia 5. Brazil 6. Russia 7. Mexico 8. Japan 9. Philippines 10. United Kingdom

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  • Mobile and Internet Usage Propels Southeast Asia’s Retail Ecommerce Sector

    Mobile and Internet Usage Propels Southeast Asia’s Retail Ecommerce Sector

    Southeast Asia has all the ingredients for a promising ecommerce market—rising internet and mobile penetration, a growing middle class with greater discretionary spending, and an increasing supply of digital platforms. Still, many challenges continue to hamper ecommerce growth in the region, as explored in a new report, “Ad Fraud in the US: How More Sophisticated Methods Are Hurting Mobile, Video and Performance Measurement”

    Retail sales in the six largest economies in Southeast Asia—Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam—will total $786.45 billion this year, representing 3.6% of worldwide sales. Indonesia, the most populated country in Southeast Asia, will also have the largest retail market, with $245.86 billion in sales. Thailand and Vietnam will follow, at roughly $190 billion and $161 billion, respectively.

    Retail potential in Southeast Asia is determined in large part by population size and purchasing power. Collectively, these six nations benefit from having a population of over 561 million people as of 2016, according to estimates from the US Census Bureau. And that number will continue to expand, growing to nearly 583 million people in 2020, adding about 21.7 million new consumers over the next four years.

    Robust economic growth in these markets is giving way to rising incomes and expanding middle classes. Data from the International Monetary Fund (IMF) shows that total GDP rose from $1.824 trillion in 2010 to $2.462 trillion in 2016. These figures, which account for inflation, are forecast to rise even further, topping $3.346 trillion by 2020.

    Southeast Asia is also experiencing a boom in urbanization, which will also help drive further retail expansion across the region. Generally, retail players focus on urban areas because they have the greatest opportunity (i.e., large population sizes) and favorable conditions for development—such as developed transportation systems, supply chains and technology. Several of the most densely populated cities in Southeast Asia are also the ones growing quickly in population size and retail infrastructure.

    Additionally, rapid ecommerce growth continues to increase in Southeast Asia. eMarketer estimates that the digital retail market—including retail products ordered online via mobile—will reach $14.04 billion in 2016, up from $10.50 billion in 2015, an increase of 33.6% year over year

    Nonetheless, ecommerce’s contribution to retail sales in Southeast Asia is still relatively small. In the six countries tracked by eMarketer, digital retail sales will make up 1.8% of total retail sales in 2016, with the lowest ecommerce share in the Philippines (0.9%) and the highest in Singapore (4.5%). These figures stand in sharp contrast to the more developed ecommerce markets in China and South Korea, where digital retail will represent 18.4% and 12.1%, respectively.

    Southeast Asia is on the cusp of an ecommerce boom, as fast-growing mobile and internet usage propels consumer spending. There are over 262 million internet users residing in these six markets. And many of these consumers are mobile-first internet users, or people who primarily access the web through their mobile phones. eMarketer estimates that about 177 million people—or 67.5% of internet users—will own and use a smartphone in 2016.

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  • Video to account for 75% of 4G traffic by 2020

    Video to account for 75% of 4G traffic by 2020

    By 2020, mobile video usage will have increased to about 75% of total 4G traffic, from 15% in 2016, according to Huawei and Ovum.

    A paper from the companies predicts that 4K UHD video, social media video, mobile video, VR/AR applications, 5G/FTTx network penetration will be among the driving forces of increased video usage.

    Also contributing will be the latest IT technology trends, including cloud computing, bid data and Telco OS.

    Enterprise video is also becoming a major factor of this growing video trend. On top of existing incumbent provided video services such as training, meetings with clients and remote medical services, a series of new video conferencing tools is being broadly deployed in various industries.

    Video conferencing is quickly shaping the strategic infrastructure business of telcos. Major players are exploring new ways to implement successful strategies for enterprise video, striving to be the leaders in the field amidst the video business transformation opportunities.

    Important steps to success

    Since big video has already been identified as a strategic imperative, the paper points out that IPTV, SVOD and the broad application of video services will influence how telcos build their big video business strategies. Three important steps to success are:

    First, telcos will need to fully capitalize on the opportunities offered by targeted bundled services: identify individual, family and enterprise groups as the three major markets into which telcos should provide target-oriented and innovative bundled services, such as aggregated online or mobile video services and TV entertainment offerings.

    Second, telcos should strive to ensure customer loyalty and retention by exploring new video business monetization models from simply paying for services to paying for a differentiated, high-quality video user experience.

    Third, yet as important, telcos should attempt to drive integration across the entire video industry ecosystem to maximize the market opportunities for all participants in the video distribution value chain.

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  • Silver consumers driving convenience push

    Silver consumers driving convenience push

    Look for more, but smaller, neighborhood stores, an increase in local delivery trucks and changing store layouts as retailers accommodate aging populations, says The Silver Series IV: Retail Reconfiguration for Seniors.

    The report is the latest in a series of analyses from Fung Global Retail & Technology on the impact of the growing 65-and-over population  – silver consumers – on global economies, industries and retail.

    With smaller households and appetites, seniors shop more frequently, but make smaller purchases, favoring the convenience store sector, the report says. The trend is already being seen in Europe, where large-format retailers such as Tesco and Carrefour are opening smaller stores. While this has yet to take place in the US, ignoring this population segment is unwise, as silvers are growing in number and driving a disproportionate amount of consumer spending.

    “The era of the silver generation has arrived,” writes Deborah Weinswig, MD of Fung Global Retail & Technology.

    The global population silver consumers – aged 65 and older – will account for over one-third of population growth through 2035, according to the United Nations, and will comprise more than 20 per cent of the population overall in Japan, South Korea, Western Europe, North America and China. These households tend to be wealthier, and in the US, senior households spend well above the national average on household supplies and books, though less on apparel and footwear, which could be due to limited choice.

    Long thought to be the province of the young and tech savvy, eCommerce also is a growth market for seniors, who will enjoy or require the convenience of home delivery.

    Not all stores and product manufacturers are accommodating silvers’ changing needs. Seniors can find large-format stores and regional malls overwhelming, and product packaging may need to be redesigned in order to make it easier for seniors to read and open, Weinswig notes.

    But some retailers around the globe are adapting. Japan’s Lawson convenience store chain has renovated units in areas with a high concentration of silvers, widening aisles, lowering shelves and stocking more products that appeal to older shoppers. The 7-Eleven chain in Japan offers a meal delivery service to seniors, while the Aeon Mall offers medical facilities, leisure activities, a concierge and other services for its senior shoppers. Supermarket chains in Germany and Austria have widened aisles, provided customised shopping carts and added nonskid flooring, while in the US, drugstores CVS and Walgreens are adapting store layouts to minimise high- and low-shelving, and have carpeted floors in some stores and even added magnifying lenses to shelves so shoppers can read labels with small print more easily.

    “It is no coincidence that Japan, which is well ahead of most countries in terms of the aging of its population, has a major convenience store sector,” Weinswig writes. “We are now seeing other markets follow Japan in a convenience boom: in France and the UK, for instance, major retailers are pushing into the format as the segment outpaces the wider grocery market.”

    The full report can be found here.

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  • 5G connections tipped to reach 690m by 2025

    5G connections tipped to reach 690m by 2025

    There will be around 690 million 5G connections by 2025, five years after the standard is expected to be approved, Strategy Analytics predicts.

    The research firm expects 5G to account for 7% of mobile connections by this time, driven by early adopters in the US, South Korea and Japan.

    China has also laid out a 2020 5G launch plan, Strategy Analytics notes, which will help accelerate adoption.

    Operators including NTT DoCoMo, SK Telecom, Verizon and AT&T are leading the charge

    Commercial 5G handset sales are meanwhile expected to exceed 300 million by 2025, according to Strategy Analytics director Ken Hyers.

    “While the first commercial 5G handsets will appear in small numbers in 2020 in South Korea and Japan, from 2021 more countries including the US, UK, Sweden, UAE and China will see their own launches,” he said.

    “By 2022 tens of millions of 5G handsets will be sold, and as a proportion of total handset sales will reach low single digit percentages.”

    The first trial 5G handsets expected to emerge in 2018 are expected to have issues including short battery life, no 4G handover or unstable connectivity, Strategy Analytics said. But these teething problems are expected to have been largely resolved once commercial handsets reach the market.

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  • Cybercriminals use insiders to attack telcos

    Cybercriminals use insiders to attack telcos

    Cybercriminals are using insiders to gain access to telecommunications networks and subscriber data, recruiting disaffected employees through underground channels or blackmailing staff using compromising information gathered from open sources.

    This is among the findings of a Kaspersky Lab intelligence report into security threats facing the telecommunications industry.

    Telecommunications providers are a top target for cyber-attacks. They operate and manage the world’s networks, voice and data transmissions and store vast amounts of sensitive data. This makes them highly attractive to cybercriminals in search of financial gain, as well as nation-state sponsored actors launching targeted attacks, and even competitors.

    To achieve their goals, cybercriminals often use insiders as part of their malicious ‘toolset’ to help them breach the perimeter of a telecommunications company and perpetrate their crimes.

    New research by Kaspersky Lab and B2B International reveals that 28% of all cyber-attacks and 38% of targeted attacks now involve malicious activity by insiders. The intelligence report examines popular ways of involving insiders in telecoms-related criminal schemes and gives examples of the things insiders are used for.

    Compromising employees

    According to the Kaspersky Lab researchers, attackers engage or entrap telecoms employees in the following ways:

    • Using publicly available or previously stolen data sources to find compromising information on employees of the company who they intend to hack. They then blackmail targeted individuals – forcing them to hand over their corporate credentials, provide information on internal systems or distribute spear-phishing attacks on their behalf.
    • Recruiting willing insiders through underground message boards or through the services of “black recruiters”. These insiders are paid for their services and can also be asked to identify co-workers who could be engaged through blackmail.

    The blackmailing approach has grown in popularity following online data breaches such as the Ashley Madison leak, as these provide attackers with material they can use to threaten or embarrass individuals. In fact, data-leak related extortion has now become so widespread that the FBI issued a Public Service Announcement on June 1, warning consumers of the risk and its potential impact.

    The insiders most in demand

    According to the Kaspersky Lab researchers, if an attack on a cellular service provider is planned, criminals will seek out employees who can provide fast track access to subscriber and company data or SIM card duplication/illegal reissuing. If the target is an internet service provider, the attackers will try to identify those who can enable network mapping and man-in-the-middle attacks.

    However, insider threats can take all forms. The Kaspersky Lab researchers noted two non-typical examples, one of which involved a rogue telecoms employee leaking 70 million prison inmate calls, many of which breached client-attorney privilege. In another example, an SMS center support engineer was spotted on a popular DarkNet forum advertising their ability to intercept messages containing OTP (One-Time Passwords) for the two-step authentication required to login to customer accounts at a popular fintech company.

    “The human factor is often the weakest link in corporate IT security,” Kaspersky Lab security expert Denis Gorchakov said.

    “Technology alone is rarely enough to completely protect the organization in world where attackers don’t hesitate to exploit insider vulnerability. Companies can start by looking at themselves the way an attacker would. If vacancies carrying your company name or some of your data start appearing on underground message boards, then somebody somewhere has you in their sights. And the sooner you know about it, the better you can prepare.”

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  • Analytics shift to predictive, prescriptive

    Analytics shift to predictive, prescriptive

    While the value of historical and descriptive analytics persists, the balance has been tipped towards more predictive and prescriptive analytics, according to a new report from Machina Research.

    For many decades, enterprises have solidly built their knowledge, strategic insights and processes around well-established approaches to data management and analytics.

    Terms such as ETL (extract-transform-load), data warehouses, data-marts and business intelligence became solid ground on which to build strategic and business approaches and decisions.

    With millions of connected devices providing real-time data about the physical world as it is, data management and analytics processes have been inundated with new requirements and opportunities.

    Machina Research said business and strategic decisions are being augmented with highly operational and predictive/prescriptive analytics, shifting the ground from “look at what happened” to “what may happen” and how best to address those potential scenarios.

    “One of the more significant developments as part of, and in parallel to, developments in IoT, is the approach of two different ‘waves’ in data management—Big Data and Fast Data,” said Emil Berthelsen, principal analyst at Machina Research.

    “Both are characterized by scale and speed, and the combination or aggregation of these two waves have led to significant changes and new requirements on data management technologies,” said Berthelsen.

    He said the landscape of IoT data and analytics is certainly evolving and will include a new age of machine learning, augmented insights and managed autonomy, as well as a new set of enabling technologies and data governance tools.

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  • Modern Trade back for Growth for 2nd quarter of 2016

    Modern Trade back for Growth for 2nd quarter of 2016

    Kantar Worldpanel, the global market leader in consumer panels, reports the spending in fast moving consumer goods (FMCG) in 2nd quarter of 2016 grew by 4.6% year on year, faster than the 2.0% growth rate reported in 1st quarter of 2016.

    Modern trade (including hypermarkets, supermarkets, and convenience stores) showed a similar trend of improving growth, 1.4% positive growth in the second quarter in comparison to a decline of -0.5% in the 1st quarter. Modern trade’s growth was most prominent in county level cities and their surrounding urbanized counties – growth rates of 2.0% and 3.9% respectively. From a regional perspective, modern trade in the East and West performed much better than South and North regions. The East region grew at 2.8% – helped by strong performance of Sun-Art Group and Wal-Mart Group – while the West region grew at 3.6% driven by Wal-Mart Group and Yonghui Group.

    International retailers suffer from continuous share drop

    Wal-Mart Group has seen relatively stable performance in 2016, gaining 0.3 share points year on year in the latest quarter. Other international retailers such as Carrefour, Tesco and Lotus suffered from continued share erosion resulting in the overall poor performance of international retailers. Sun-Art Group and Yonghui lead the growth of Chinese players. Sun-Art group managed to grow its shopper base through both the continued development of existing stores and incremental opening of new one. Their growth was most marked in the competitive East region market; share increased from 13.5% of 2nd quarter of 2015 to 16.0% in the latest quarter – widening their leadership over competitors.

    Yonghui consolidates position as a top 5 national retailer: Yonghui continues to perform well in 2016, a fast pace of growth in penetration and basket size enabling its share to continue to exceed Lianhua Groups in Q2 after first overtaking it in Q1. Despite this strong performance – Yonghui still faces challenges in the East region. Strong growth of Sun-Art Group and Wal-Mart’s gradually recovery have meant that Yonghui’s acquisition of Lianhua has yet to see any sustained effects.

    Brick and Mortar and eCommerce retailers looking for cooperation: Continuous FMCG slow down combined with the impact from eCommerce growth in China, has pressured physical retailers into finding new solutions to drive growth. Kantar Worldpanel latest data show, 52 week end June.17th, show total FMCG eCommerce penetration% reached 49%, growing 10% from last year. The growth of online is leading by Tmall and JD, both with spend growth rate over 80%. While continuing to experiment with their own e-tailing platforms; the major retail chains are now seeking to bolster performance through strategic partnerships with existing digital players. Wal-Mart’s corporation with JD.com enables Wal-Mart to reach new online shoppers while allowing JD.com to utilize YHD’s broad footprint in East region. Vanguard’s strategic investment in the XinMeiDa (previously Meituan & Dianping) and Feiniu’s corporation with Shihui, both show brick-and-mortar chains’ new efforts to better realize their O2O strategy.

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  • For Indonesia, assisted e-commerce may just be the next big thing

    For Indonesia, assisted e-commerce may just be the next big thing

    In the case of Indonesia, only a small portion of the population can enjoy such benefits despite the rapid growth of smartphone sales. Over the past few years, the boom of e-commerce has opened up many possibilities for Indonesians. From the rise of young entrepreneurs to a chance to purchase rare goods from overseas, we have seen how the internet drives the interactions between marketers and buyers onto the next level.

    Among the litany of advantages, it is evident that consumers would benefit the most from the thriving e-commerce through price competition. The availability of e-commerce platforms allows buyers to browse varieties of products and pick those that are offered at the most reasonable price.

    Putting aside the argument that blames e-commerce for promoting consumerism, the new shopping platform has undoubtedly helped customers make informed decisions and ensure prudent spending of their money.

    In the case of Indonesia, only a small portion of the population can enjoy such benefits despite the rapid growth of smartphone sales. That is because, in part, only 20 per cent of the country’s population of 250 million own bank accounts, a prerequisite for making payments on many e-commerce platforms. Meanwhile, only about 5 million of Indonesia’s 125 million-strong workforce have credit cards and hence more convenient access to e-commerce.

    Apart from the technical barriers, lack of trust has halted potential customers from shopping online. Futhermore, while many Indonesian e-commerce players have been focusing on attracting tech-savvy end users, these unbanked, technology illiterate segments have remained untouched in the business. With such a huge gap, there are a number of reasons why assisted e-commerce — in which online purchases are made with assistance from a third party — serves as an alternative model to help more people access e-commerce and relish its benefits.

    Filling the Gap

    The first and foremost factor is, of course, the huge room for expansion in the local e-commerce market. Although they have been enjoying continuous growth in the number of registered sellers and transactions, major players such as online marketplaces Bukalapak and Tokopedia have been mainly relying on purchases made by end users who browse and buy products for their own use. The abundant parts of the society who have neither means nor knowledge to make online purchases, meanwhile, will remain at a distance in the absence of efforts or innovations that can help them understand and, therefore, access online shopping platforms.

    And this is where the assisted e-commerce providers start to fill the gap. Jakarta-based Kudo, for instance, claims that it has managed, as of last week, to recruit more than 100,000 marketers, or agents, across the archipelago within just a few months after the launching of its application early this year. Running on the Android operating system only, the Kudo application serves as a mobile online store for its agents, who receive a certain commission for every product they manage to sell to people around them.

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  • App economy driving job growth

    App economy driving job growth

    The application economy has positively impacted job growth, economic competitiveness, and the ability of governments to provide better services to citizens, according to a survey conducted by he Economist Intelligence Unit (EIU) for CA Technologies.

    Moreover, collaboration exists between the public and private sectors across the Asia-Pacific and Japan (APJ) region, the research found.

    More than 74% of government respondents in APJ have indicated that application start-ups are crucial or important in driving growth of the application economy and 79% say the same for large enterprises who have application-based products and services

    More than 95% of government respondents, 90% of enterprises and 81% of start-ups also said they have seen collaboration among the three groups.

    Meanwhile, 85% of government respondents in APJ see the technology sector as an important and often crucial driver of economic growth in their regions.

    “Across Asia Pacific and Japan, we are witnessing digital transformation becoming an integral part of the national agenda for many governments. In the application economy, where every business is a software business, growing digital capabilities has become the key to staying competitive,” CA Technologies president and general manager Kenneth Arredondo said.

    “Governments, startups, and even large enterprises are not only beginning to understand the necessity of this but that partnership, be it technology integration or B2B sales, can be a boon to their growth,” he added.

    All parties, however, agreed that there is still more that can be done. For one, government respondents named a shortage of tech talent stemming from a lack of educational or training programs as the largest barrier to the growth of the application economy (48%). This was followed by one-third of APJ government respondents pointing to a lack of public funding.

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  • Only four Asian nations safe for data storage

    Only four Asian nations safe for data storage

    Only four Asian nations are considered truly secure for data storage, according to a new report by secure data center operator Artmotion.

    Combining independent data from the United Nations, World Economic Forum, Transparency International and several other leading privacy groups, the report titled “Data Danger Zones” ranks over 170 nations on their abilities to keep digital information safe, private and secure.

    Globally, the benchmark identified Switzerland as the safest nation for data storage, receiving a “potential risk score” of only 1.6%. Singapore was ranked as the the safest Asian nation, with a risk score of 1.9% as a result of the island state’s independent privacy legislation and political stability.

    Hong Kong (5th place), Taiwan (6th place) and South Korea (15th place) also join Singapore in the top 15 safest nations globally, ahead of the United Kingdom and the United States of America which ranked 23rd and 38th respectively.

    Despite Asia’s growing role as a market for data storage, the new benchmark suggests that it is falling behind other regions when it comes to data security and privacy. While only a few IT managers have chosen to store data in Afghanistan or Yemen, rapidly expanding data center markets such as China did not even qualify for the top 50 safest nations.

    More surprisingly, India, one of Asia’s key technology hubs and home to the largest data center in the world, ranked only 107th on the list, falling below Russia and Turkey.

    Commenting on the new study, data privacy expert Mateo Meier said: “It’s very easy for businesses and individuals to forget the importance of physical location when selecting a cloud hosting service or data hosting provider.

    “Especially in today’s volatile world, businesses need to not only consider data privacy regulations, but also take into account other risk factors such as political environments, geographic locations and physical infrastructure.

    “In support of this point, the Data Danger Zones report examines over 3.5 trillion IP addresses in 170 assessing countries, providing one of the most comprehensive guides ever created for data safety. Through this analysis, we want businesses to be able to make a more informed decision of how and where to store their data, and have a better understanding whether or not it is truly safe.”

  • Companies expect Olympics to strain their networks

    Companies expect Olympics to strain their networks

    The vast majority of companies (85%) plan to more closely monitor the performance of their applications and networks, including Wi-Fi, because of potential strain due to employees accessing Olympic content.

    A survey conducted by Riverbed Technology revealed that only 2% stated that they were very unlikely to monitor any differently during this the Olympics.

    The network strain in office is likely to be prevalent in Singapore, with national broadcaster Mediacorp only being able to air delayed telecasts of the Olympics due to broadcasting rights.

    “The time zone difference mean that finals will be aired during working hours, and with no live telecast in Singapore, sports fans are likely to turn to live streaming to cheer on Team Singapore – on company networks. IT organizations need to come together and prepare for the significant increase in network traffic that will occur as a result of employees streaming and accessing online content,” said Bjorn Engelhardt, SVP, Riverbed, Asia Pacific and Japan.

    Companies expected employees to access Olympic content using the company’s networks, including Wi-Fi, most frequently via their desktops and laptops (48%); followed by smartphones (34%); and then tablets or other non-smartphone devices (18%).

    The reason for monitoring employees’ access to Olympic content could potentially be linked to companies being unable to quickly pinpoint and resolve performance issues of critical business applications:  Less than half of the companies surveyed, 43%, were very confident that their organizations could safeguard critical applications during high network traffic events such as the Olympics, while 12% were not confident that their companies could handle the added strain and traffic.

    In one of the most revealing statistics, companies were asked if they’ve had an issue, even once, with their networks, including Wi-Fi, specifically because employees were accessing content during a popular event such as the Olympics. The majority of companies responded yes (69%), with 30% of these same companies saying that they have experienced more than one episode of issues. The survey also found that the majority (70%) of companies said they would limit or probably limit employees from accessing Olympic content through company networks, including Wi-Fi, in some way, with 24% saying they will definitely limit content and 46% saying they would probably limit content.

    “The results of the survey highlight how popular events such as the Olympics and the impact of BYOD are affecting companies and the need for greater visibility to safeguard networks and business critical applications. IT must take a proactive approach to managing application performance with end-to-end visibility across the network from the server to the end user,” said Engelhardt.

  • Illegal, unlicensed and completely unregulated … so why is Airbnb booming in Hong Kong?

    Illegal, unlicensed and completely unregulated … so why is Airbnb booming in Hong Kong?

    Cushions with cartoon dogs on, neatly rolled towels and fresh flowers are the small details that mean the most for Airbnb guests and hosts.

    For one host in Hong Kong, those personal touches are replicated across 52 listings, including at least 31 flats in one building near Lan Kwai Fong.

    Taking up three quarters of the flats in one building on Glenealy, the Airbnb apartments share a common rooftop and range in price from around HK$500 per night to more than HK$2,200 for a four-bedroom flat.

    The flats, which do not appear on the Home Affairs Department’s list of licensed guest houses, are among a growing number of short-term rental properties being rented illegally in Hong Kong.

    Airbnb listings in the city have grown by 59 per cent since September to 6,124 rooms or apartments available for rent at the beginning of June, according to data compiled by Murray Cox, the founder of Inside Airbnb and a data activist.

    Cox found 60.5 per cent of listings were from hosts with more than one room or property listed on the site, suggesting these are commercial operations rather than individuals renting a spare room.

    “The main metric that stands out for Hong Kong is the large number of hosts that have multiple listings,” Cox said. “Cities such as London, New York or Berlin, which have introduced regulations that prohibit commercial Airbnb use of residential properties, generally focus their enforcement efforts first on commercial hosts with many listings.”

    Luxury ‘superyacht’ for HK$58,000 a night: Inside Hong Kong’s most expensive Airbnb

    The highest number of listings can be found in Central and the Western district, as well as Yau Tsim Mong – the area including Tsim Sha Tsui, Yau Ma Tei and Mong Kok – with 1,474 and 2,519 respectively, according to data by Cox. The average rental per night across the city is HK$785.

    When the we called the telephone number for the Lan Kwai Fong Airbnb host given by a person at the property, the woman answering denied she owned the flats. She said she rented other Airbnb flats without a licence, but the government had forced her to stop renting some of those near the University of Hong Kong.

    Airbnb was founded in 2007 in San Francisco by two roommates who were struggling to pay their rent and decided to rent out air beds in the living room to attendees of a design conference. The company is now seeking financial investments, based on the company’s potential valuation of US$30 billion.

    Airbnb here to stay in Hong Kong as the sharing economy takes flight

    The site has faced opposition from regulators in cities from San Francisco, Berlin and London as well as from campaigners that say properties that would normally be let on a long-term basis are being rented by landlords for short stays affecting the supply of housing.

    Regulation has moved to include provision for Airbnb properties in some cities. Laws introduced last year in London allow home owners to rent their properties for up to 90 days a year without any form of registration, but opposition remains even in the service’s home city.

    Premises that offer sleeping accommodation for a fee for any period less than 28 days must be licensed, according to Hong Kong’s Hotel and Guesthouse Accommodation Ordinance.

    The maximum penalty for operating an unlicensed guest house is a HK$200,000 fine and two year’s imprisonment. There is also a fine of HK$20,000 for each day the offence continues.

    Enforcement is carried out by the Office of the Licensing Authority under the Home Affairs Department, and a spokeswoman said the office now has a dedicated team to browse the internet for suspected unlicensed guest houses.

    Last year the Office secured 132 convictions relating to unlicensed guest houses, some of which had been rented over the internet.

    Airbnb told us it “encourages hosts to comply with locally set rules and regulations in Hong Kong.”

    The company did not share the number of listings in the city and said Inside Airbnb data had flaws such as the price per night as this was based on an average of available listings rather than what has been booked or what guests are paying.

    I don’t think this is something you should do for too long. It’s not legal … I’m very surprised that we’ve lasted that long

    Airbnb landlord S

    Airbnb also said there was no reliable way to scrape data for the average income for a host each month or the average number of nights booked. The company did not supply the accurate data from its own internal sources.

    Flats or rooms available on Airbnb in Hong Kong range from small, functional rooms in Mong Kok to penthouses with harbour views and houseboats moored in Discovery Bay.

    While the Inside Airbnb data revealed hosts with as many as 80 listings and at least 20 with 22 or more listings, there are hosts in Hong Kong who rent just one flat or one room.

    S, who asked not to use her full name, is a 33-year-old French woman working in retail in Hong Kong, who rents her 500 square foot apartment in Sheung Wan for around HK$1,000 a night fitting Airbnb guests around visits from family.

    She said she has been renting the flat, which she and her husband own and previously lived in, since July last year and has seen 90 per cent occupancy . On average the flat brings in HK$30,000 a month, she said.

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    While S knows Airbnb is illegal, she feels the company protects her and her guests if there is any damage or dispute. If the laws were changed to allow short-term rentals, she said she would be happy to be taxed if she could still rent through Airbnb.

    Maintaining the flat and organising bookings is time consuming, S said, as she likes to provide a good service to her guests, but she does not see it as a long term plan.

    “I don’t think this is something you should do for too long. It’s not legal. I might rent it out on a permanent basis,” she said. “I’m very surprised that we’ve lasted that long.”

    Another Airbnb host, who asked to be referred to as Mary, rents out her spare room in the two-bedroom flat she shares with her boyfriend in Sheung Wan for 15 days each month to offset the rent.

    Mary lets the room for HK$500 to HK$600 a night and has made between HK$6,000 to HK$7,000 each month since late last year.

    She said her landlord does not know about the couple using Airbnb, but she is not concerned about the legality of Airbnb, even after a friend was evicted by their landlord for using the service.

    Most of the guests from mainland China are respectful, Mary said, although the couple did once come home late to find chaos in their living room.

    “We just opened the door and found stuff all over the living room. The luggage, some bath towels on the sofa, a bra hanging on my room door,” she said.

    “They were quite surprised to see us. So we kindly asked them to maybe put the stuff in their room.”

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