Category: Research

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Lessons to be learned from South Korean TV

Stepping inside the Munhwa Broadcasting Corporation (MBC) in Seoul, you would be surprised how the Korean broadcaster has managed to turn its headquarters into a tourist spot.

On the ground floor, booths are set up to allow visitors virtually learn singing and take pictures with the Kpop stars, or even pretend to be their girlfriends or boyfriends.

Upstairs, visitors could take a further step to have a taste of being anchors in news castings or even acting as the empress in the signature dramas.

Korean dramas have stirred up crazes in Asian countries over the past decade and created huge business opportunities. With the recent success of the military-setting drama Descendants of the Sun, produced by another broadcaster KBS, many would wonder how Hong Kong, which sees a new free station ViuTV goes on air earlier this month, could learn from the Korean experience.

It was important for the government to take a careful position, said the country’s envoy in Hong Kong, by pouring resources in nurturing talents in one hand but refraining from meddling in the production.

“Even though the Korean government support the entertainment industry, they would not intervene directly,” said Yu Byungchae, the country’s consul in Hong Kong on culture. “The content of the dramas and movies depended on the creator’s ideas.”

The more competitive environment in South Korea, with the rise of new cable broadcasters, has helped boosting the production’s quality, said Yu, and now the industry is eyeing not just locally but the huge overseas market.

The Descendant of the Sun – the first TV series jointly produced by Korean and Chinese firms and aired in both nations simultaneously — has already been sold to 32 countries, including United States, Germany and Russia.

The drama’s success also helped giving a strong boost to the tourism and retail sectors, said Yu. One of the examples was the surging sale of red ginseng extract which the leading actor Song Joongki was seen drinking in Descendant of the Sun.

“In the past, [promoting] culture, drama or Kpop are the responsibility of the Ministry of Cultural, Sports and Tourism,” he said. “But now financial ministers and other sectors are all interested in coordinating [to see] how the government can help those industries to develop more.”

Yu also said Hong Kong’s advanced financial system actually was a great advantage the city enjoyed to develop its cultural industry, adding he believed the emergence of ViuTV would bring Hongkongers more diversified content.

“Things we have not imagined before might [happen] now,” he said, referring to the new broadcasters’ all-female mixed martial arts reality show G-1 Fight Club which featured eight Hong Kong starlets beating on each other.

“It’s natural that competition [boosts] creativity. To survive, [broadcasters] have to create things they have not done before.”

But Korea watcher Steve Chung Lokwai was not so optimistic at the city’s capacity in producing dramas of Korea’s quality in short run.

ViuTV was placing its focus on entertainment or reality shows instead of dramas, he said, as the production of the latter required enormous and sustaining capital and it would be very tough for the newcomer to compete with the broadcaster giant TVB.

The decades-long monopoly of TVB has also made Hong Kong lag way behind South Korea, Chung, an assistant lecturer of Global Studies programme in Chinese University, lamented.

“TVB used to sell its dramas to the overseas Chinese markets, but now even the expat Chinese communities have given up TVB to watch Korean or Japanese dramas instead,” he said.

Chung said Hong Kong government did not have a macro cultural and entertainment policy and argued only by granting more free-to-air TV licenses, which facilitates true competition, would help improving the stagnant development.

May 1, 2016
Removing online commercial curbs can hurt consumers
Hong Kong manufacturers and retailers that increasingly use e-commerce may know that their contracts with EU companies may contain vertical restraints on online distribution. Competition authorities across Europe are currently discussing the appropriate treatment of such restraints under competition law.

This is being done with a view to preventing distributors from imposing more restrictions on online retailers than on their rivals in traditional brick-and-mortar shops, Hong Kong Trade Development Council Research (HKTDC Research) has said in a report.

The UK’s Competition and Markets Authority (CMA) commissioned a report from independent consultants in order to know why businesses use these restrictions and how these may affect consumers, both positively and negatively. The report surveyed 33 mostly small and medium-sized UK-based manufacturers and retailers. It was released on 30 March 2016 and will prove to be of interest to e-commerce users, HKTDC Research said.

The businesses interviewed use a wide range of restraints in their contracts, with the most common being selective and exclusive distribution agreements (often excluding online retailers) and recommended retail prices (RRP) for retailers. The participants explained such restrictions by the need “to prevent free-riding” and to “protect brand image”.

Free-riding may occur when customers visit ‘service retailers’ (e.g. providing free advice on products), but purchase the product from a cheaper retailer that does not provide any service support.

Participants who mentioned maintenance of brand image said restrictions “helped signal the high quality of the product and maintain the image of the product (particularly for luxury brands)”.

However, the report further shows that the restrictions are also “attractive because they limit the direct competition faced by the relevant manufacturers or retailers, particularly from online channels”, without any consumer benefit.

Hong Kong companies may be interested in the conclusions of this report. In the long term, forbidding these restrictions “could bring about lower retail service standards and a poorer quality experience of the underlying product”. This is likely to hurt consumers, especially for high-tech products. On the other hand, especially in the short run, the absence of such restrictions could cut prices and widen product availability.

The European Commission is also conducting an inquiry into the e-commerce sector. The inquiry was launched on 6 May 2015 and a Preliminary Report is due to be published in mid-2016.

A sector inquiry is an investigation that is carried out by the European Commission into sectors of the economy and into types of agreements across various sectors, when it believes that a market is not working as well as it should, and that breaches of the competition law rules might contribute to the malfunctioning of that market.
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May 1, 2016
In Asia, Netflix trips on regulation, content, and competition
Months after its global rollout, Netflix is facing problems in several major Asian markets as it struggles to provide enough strong content to attract consumers amid tough local competition, and also faces many regulatory hurdles, underlining concerns about disappointing subscriber numbers reported this week.

From complaints that programming libraries offered in many countries are far smaller than in the United States to delays in offering its signature “House of Cards” series in some markets due to rights issues, the U.S. video streaming giant’s January launch into 130 new markets worldwide, including a slew in Asia, has been bumpy.

When it launched in Indonesia in January, for example, Netflix ran afoul of the film censorship board for carrying content deemed inappropriately violent or sexual. The communications ministry also demanded that Netflix set up a local office and pay Indonesian taxes.

State telecoms company PT Telekomunikasi Indonesia Tbk (Telkom) will continue blocking Netflix until it adheres to regulations, Arif Prabowo, vice president for corporate communications at the carrier, told Reuters, declining to give details.

Netflix is still available in Indonesia via wifi connections and other carriers.

“Services delivered over the Internet present new questions for everyone, including policymakers, and our intention is to comply with applicable laws and regulations,” said Jessica Lee, Netflix’s head of communications for Asia.

“It is all part of the journey as we roll out in different countries,” she said.

The cost of dealing with these kinds of issues are reflected in its results, which show that Netflix suffered a first-quarter operating loss of $104.2 million for streaming video outside the U.S., partly because of higher marketing costs, and also showed that it is earning less per subscriber overseas than at home.

Netflix had 34.5 million international subscribers against 47 million in the U.S. at the end of the quarter. It is unclear how many of its customers are in Asia.

LICENSING RESTRICTIONS

In South Korea, where local content is popular and consumers have numerous streaming options, the Netflix site offers fewer than 20 local TV shows or movies.

“Korean Netflix’s library in terms of content is pretty thin,” said Jung Dong-yoon, a 29-year-old Seoul office worker and subscriber since January.

Netflix viewers in the country also this week discovered that well-known shows including “How to Get Away with Murder” and season two of “Better Call Saul” were missing – temporarily, Netflix says – as the shows are submitted for age appropriate ratings by the country’s ratings board.

Programming rights are an issue globally.

As of January, Netflix Australia, which launched service more than a year ago, offered just 443 TV shows, compared with 1,157 in the United States, and had 1,585 movies, compared with 4,593, according to Finder.com – fewer than those available in Iraq, Haiti, Cuba and many other countries.

“With the traditional way in which rights to movies and TV titles are structured, there will be licensing restrictions and the goal is to get to a global library that is the same everywhere but that takes time,” Lee said.

Vivek Couto, executive director of consultants Media Partners Asia, said it is still early in Asia for Netflix. He expects the company will ramp up local content and eventually get “reasonable penetration” in markets such as India, South Korea, Singapore, Hong Kong, the Philippines, Thailand, and Vietnam.

“Markets like Singapore and India, over time, they can do reasonably well, but I think they’re going to find more challenging markets like Japan, Korea, China,” he said.

Netflix has yet to win permission to enter the coveted but highly restricted China market.

SLOWER GROWTH

Netflix this week said it expected to add about 2 million non-U.S. subscribers in the second quarter, below analysts’ average expectations for about 3.5 million.

Chief Executive Reed Hastings on Monday cited a lack of local language content and local payment options for limiting initial sign-ups in some countries.

“Over the next couple years as we further localize, we’ll be able to see more opportunity,” he told analysts on a conference call. Netflix can take heart from its performance in Latin America, where it launched in 2011 and is by far the dominant video streaming service.

However, it has seen its share of the key Mexican market eroded slightly by competition from Clarovideo, a streaming service offered by billionaire Carlos Slim’s America Movil.

One of Netflix’s biggest obstacles to growth in Mexico has been the low-level of broadband subscribers, according to one industry source. Broadband availability also looms as a potential concern in Brazil, where the telecoms regulator announced earlier this week that broadband providers would soon be allowed to set Internet usage limits.

In Asia, Competition is intensifying from local streaming sites as well as global providers such as Amazon, Hulu, HBO and BBC iPlayer.

Around the time Netflix debuted in South Korea, local company Frograms Inc launched its own Watcha Play service. Two months later, SK Telecom made its video streaming service available to customers who do not subscribe to its phone service.

Around the time Netflix debuted in Australia, publisher Fairfax Media and broadcaster Nine Entertainment Co Holdings launched a joint venture streaming service, while News Corp and Seven West Media teamed up to do the same. All offered heavy discounts, including free trials.

Netflix had an explosive start in Australia, counting nearly 3 million Australians as viewers, OUT OF A population of 24 million, within nine months of its March 2015 launch. But growth has slowed just as dramatically, from a 55 percent leap between April and May to a rise of 4 percent between September and October, according to Roy Morgan research.
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April 22, 2016
Why Is Apple Opening More Retail Stores in Emerging Markets?
Apple continues to remain optimistic about China despite the country’s economic slowdown. As a result of this optimism, Apple plans to open a number of retail stores in emerging markets such as China and India. Apple had 28 stores in China through the end of 2015, but it plans to add 12 more by mid-2016.

In India, Apple had depended on subdistributors for the sale of its products until now. However, Apple has sought approval from the Indian government to open its own retail stores in India.

Apple considers India to be an important market in the coming days, as the country is now the second-largest smartphone market in the world after China. Apple’s revenues in India grew by a healthy year-over-year (or YoY) rate of 38% in the quarter ended December 2015.

Percentage of users buying iPhones from Apple US retail stores declining

India has some positive macroeconomic factors that make it an attractive market. It is one of the fastest-growing economies with a huge young population. According to Apple’s CEO, Tim Cook, “The population of India is incredibly young. The median age there is 27. I think of the China age being young, at 36, 37 and so 27 is unbelievable. Almost half the people in India are below 25. And so I see the demographics there also being incredibly great for a consumer brand and for people that really want the best products.”

The focus on retail in emerging markets is big for Apple, but it’s the opposite in the US. According to a report, citing research from Consumer Intelligence Research Partners, users are increasingly buying iPhones from telecom providers such as Verizon, Sprint (S), and AT&T (T) rather than its own stores. The above chart shows this trend. The main reason for this trend is that these providers offer consumers attractive leasing, installment plans, and exchange offers.

Apple commands only 2% share of India’s smartphone market

In the previous part of this series, we discussed the growing focus by Apple on India. According to Counterpoint, India recently overtook the US to become the second-largest smartphone market, behind only China. However, Apple still only commands a 2% share in India’s smartphone market.

According to that report and as the chart below shows, Samsung led the Indian smartphone market last year, with Micromax, Intex, Lenovo, and Lava taking the up the remaining four positions among the top five players in this market. Microsoft lost its place among the top five players in this market due to the declining popularity of the Lumia line of smartphones.

Apple Aims to Increase Penetration of India’s Smartphone Market

Apple’s initiatives in India have yet to bear fruit

Apple released the low-cost iPhone SE in March 2016, accompanied by high expectations. It released this smartphone in India in early March, but it has so far failed to garner much interest from users. The problem with the iPhone SE is that although it costs $430 in the US, it is sold at the higher price of $586 in India.

iPhones cost more in India because Apple currently depends on third-party distributors to sell the devices in India, adding their commissions to the phone’s price. However, as discussed in the previous article, Apple plans to open its own stores in India, which could help bring down the prices of iPhones in India going forward.

This isn’t the first time Apple has launched a cheaper version of the iPhone. In 2013, Apple launched the iPhone 5C at around $500.

In 2015, Apple announced that it would slash the price of the iPhone 5S from $665 to $370, according to a report from the Times of India. However, all these efforts have still not helped Apple’s penetration of the Indian smartphone market. In our view, Apple would have to do much more to achieve that goal.
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April 21, 2016
Tips on starting a business
The fun really begins now, as there is so much to learn about starting a new business. There is a lot of preparation and risk involved in starting out in a new venture. There are a lot of options available for you to look into, as you start your venture as an entrepreneur. I must admit it takes a lot of courage and want, to succeed and to create a viable business. There is no point in creating a business if you are not prepared to give it your all. The risks involved are far too high, to take a step into a new business venture light heartedly. I’m not trying to scare you but merely emphasize, what to expect if you decide to take on the challenge.

Create a Business Plan

It is imperative that you create a business plan before you start your venture. A business plan is like a road map to your success. You will find that there are many different areas that you should have a firm understanding of. A few examples of this include a Marketing plan, Equipment list, suppliers list and a list of processes for your daily operations. These are just a few areas you should be looking into and there is a lot more preparation required for a successful business. There is a number of ways you can set out your business plan there issoftware and templates available. The main thing is that you have one!

Don’t Over Capitalize

The best way to start a business is to start out small and dip your toe in so to speak. The advantages to testing your market will ensure you do not end up in a hole, with nothing to show. There is a lot of successful businesses. Which have started out with a very minimal investment a great product and a great business strategy.

Understand the Nature of What you are Selling

It is a good idea to enter an area of business where you have experience. The obvious upside to entering a business that you know a lot about is the rate of failure will be lower. Imagine for a second that you have a great idea started investing your time and hard earned savings, to find that you had no idea what you were doing . You may not be able to sustain the business based on your turnover. A lot of your learning would be now coming from on the job learning, which can be quite costly.

If you had experience already around certain areas of the business you were starting, you would eliminate a large part of the risk. So in basic terms the more you know in advance to your commencement, obviously the less risk involved. Business is all about eliminating the levels of risk associated with it. There will always be risk but you must manage it efficiently to succeed.

Market your Business Effectively

Your business obviously must be marketed to your audience. Now there is no point marketing to an audience that is not receptive to your product. For instances if your selling men’s business shoes, you want to market to business men. The chances of selling those men’s business shoes to truck drivers, will be quite minimal. I hope you understand the point I am trying to outline.

Once you have indentified your market, then it’s time to test different ways of marketing. Most of the best entrepreneurs try small efforts, in different areas tweaking to maximize results. Marketing is a complete topic on its own and needs to be looked at very thoroughly if you are to succeed. In saying this there are some very cost effective ways, available to start marketing your business.

Read as Much Literature as you Can

If you are dedicated to your success and follow your dreams then you will succeed. We are in the information age and can access a great wealth of information from basically anywhere. The best part is a lot of this information is FREE. We must constantly learn from investing time, in advancing our knowledge to succeed. Remember that Rome wasn’t built in a day and that you don’t need to go it alone. Many people have already made the mistakes, you just need to learn from them and tailor it to your own situation.
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April 21, 2016
Malang city expected to go intl through digital technology development
The Minister of Trade, Thomas Lembong, expects Malang to go global, thanks to its digital technology-based development, and by introducing the world to its potential, especially in creative products.

“Malang must go global. I believe Malang and its people can go global in the digital age through internet and social media,” Lembong said here on Friday (April 1).

He added that the potential that Malang city offers, particularly in culture, creativity and innovation, should be introduced to the world through digital technology.

Moreover, the community of Malang City is a creative community, he said.

“Malang has creative people with modern ways of thinking. I wonder if the creative industries are well developed here?” Lembong said.

According to the minister, the use of digital technology in everyday life in Malang can act as a strong resource to face regional and international economic competition.

A life style based on digital technology is key to development in the 21st century when competition is more about human resources.

“Any modern city should attract innovation and be inspirational. I can see that Malang will be very good in these aspects,” he said.

In accordance with the governments program of Nawacita (the nine goals), it will build or revitalize 5,000 traditional markets by 2019.

The Ministry of Trade prioritizes the development of local markets which are older than 25 years, and those which were destroyed by fire, natural disasters and post-conflict.

In addition, the markets which are located in disadvantaged areas and border areas that lack trading facilities, or those with a huge trade potential, will also be developed.

Since 2011-2016, the Ministry of Trade has revitalized or built 43 markets in East Java province with a budget of Rp250 billion.
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April 14, 2016

Expansion Alibaba to Indonesia to Cause Rising Trade Deficit with China?

Through the acquisition Alibaba is to have a firmer grip on the online retail business in Southeast Asia, including Indonesia, the region’s largest economy where Internet and smartphone penetration have been developing rapidly in recent years (although coming from a low base). The Southeast Asian nations where Lazada has been operating so far have a combined population of 560 million (of which an estimated 35 percent are online and thus potential online shoppers). However, Southeast Asia is also a challenging environment for online retail firms as the area is characterized by tough logistical issues (partly due to the relatively weak state of infrastructure) and there remains a lack of warehousing outside more advanced markets such as Singapor

Through the China-ASEAN Free Trade Agreement (CAFTA), effective per 1 January 2010, about 90 percent of imported goods between Indonesia and China are subject to a zero percent tariff. Due to China’s higher developed manufacturing industry and lower logistics costs the implementation of CAFTA has caused a continuously rising flow of Chinese products into Indonesia. This has caused a rising trade deficit and also curtails development of Indonesia’s manufacturing sector (after all it is cheaper and quicker to import products from China than to invest in costly and long-term import-substitution industrialization).

In 2015 Indonesia imported USD $29.22 billion worth of (non-oil & gas) products from China, while Indonesian exports to China only totaled USD $13.26 billion, implying a trade deficit of nearly USD $16 billion for Indonesia that year. This is in stark contrast to the years before 2008 when Indonesia had the upper hand in trade with China. The table below shows that Indonesia’s trade deficit with China rose significantly after the implementation of CAFTA in early 2010.

Indonesia-China Trade Balance (non-oil & gas):

	2007	2008	2009	2010	2011	2012	2013	2014	2015
Export to China (in USD billion)	9.7	11.6	11.5	14.1	21.6	20.9	21.3	16.5	13.3
Import from China (in USD billion)	8.6	15.3	14.0	19.7	25.5	29.0	29.6	30.5	29.2
Trade Balance (in USD billion)	1.1	-3.7	-2.5	-5.6	-3.9	-8.1	-8.3	-14.0	-15.9

^{Source: Indonesian Trade Ministry}

With Alibaba now owning a controlling stake in e-commerce platform Lazada, which has a rising costumer base in Indonesia, it could cause two developments: (1) due to the stronger ties between Lazada and China it gives rise to an increasing flow of Chinese products into Indonesia putting pressure on Indonesia’s trade balance, and (2) it threatens the position of local Indonesian start-up e-commerce businesses such as Bukalapak or Tokopedia because Lazada is expected to get a capital injection from Alibaba for expansion purposes and has easier access to cheap Chinese products (more competitive).

April 13, 2016

43% of Hong Kong consumers shop on smartphones
Mobile shopping has taken hold in Hong Kong, with more than two in five consumers making purchases via their mobile device in the past three months, the latest MasterCard Online Shopping Survey reveals.

The widespread use (98.8%) of internet-enabled smartphones in the city has set the backdrop for more and more Hong Kong consumers (42.9%) choosing to engage in mobile shopping, marking an 18.3% increase since 2011.

The survey also indicated that an increasing number of local shoppers are now embracing new payment technologies, with 11.2% currently using digital wallets compared to 7% last year.

Similar to previous years, convenience (53.2%) continues to be the key driver for mobile shopping, followed by the growing availability of apps that make it easy to shop (33.8%) and the ability to shop on the go (28.4%).

Almost half (48.6%) of local respondents said they had downloaded a shopping app on a mobile phone in the last six months, and the most popular items bought via mobile shopping include clothing and other fashion accessories (24.3%), movie tickets (21.9%) and toys and gifts (16.2%).

Hotel accommodation (14.3%) and items from supermarkets (12.4%) also climbed up the list as some of the most common spending categories among local consumers.

The majority of Hong Kong consumers (84.2%) made at least one purchase online in the past three months, and their average length of online shopping experience is 3.2 years. And 81.8% of local consumers planned to shop online in the next six months.

But over three quarters (77.8%) regarded security of payment facility as a key consideration when shopping online.

When asked about the major improvement area for online shopping, more than half of the respondents (54.4%) also expressed that one should be assured that transactions are secure.

“While Hong Kongers cited convenience as the top motivating factor for mobile and online shopping, we also understand that security of payment facility remains a key consideration,” said Anna Yip, head of Hong Kong and Macau, MasterCard.

Overall, consumers in Asia-Pacific are embracing new payment technologies with one in five (19.5%) using digital wallets, a two-fold increase from two years ago (9.7%). Emerging markets are leading the way with smartphone users in China (45%), India (36.7%) and Singapore (23.3%) being the region’s biggest adopters of digital wallets.

In terms of online shopping, China continues to lead the Asia-Pacific region as in previous years, with almost every respondent (97%) having shopped online at least once in the previous three months. However, when it comes to mobile shopping, India surpassed China (76.1%) for the first time, with 76.4% of respondents indicating that they had made a purchase through their smartphones.
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April 5, 2016
Most consumers install apps carelessly
Kaspersky Lab has has published research indicating that consumers are installing apps on their devices, without being aware of the potential consequences.

Kaspersky Lab’s “Are you cyber savvy?” Quiz, which questioned 18,507 consumers about their online habits, found that an alarming number of consumers are leaving their privacy, and the data on their phones, exposed to cyberthreats because they are not installing apps on their devices safely.

A “shocking” 63% of consumers neglect to read the license agreement carefully before installing a new app on their phone and one-in-five (20%) do not read messages when installing apps. They simply go through the motions of clicking “next” and “agree,” without understanding what they could be signing up to.

When users neglect to read license agreements or messages during the app installation process, they do not know what they are agreeing to. Some apps can affect user privacy, prompt the installation of other apps, or even change the OS settings of a device completely legally, because the user has “agreed” to it during the installation process.

The quiz also discovered that just under half (43%) of users could be at risk from the apps on their mobile device, because they are not “cyber-savvy” enough to limit app permissions when installing apps.

Further, 15% of respondents do not limit what their apps can do on their phone at all and 17% give apps permissions when prompted, but then forget about it, while 11% think they cannot change those permissions.

When app permissions are left unchecked, it is possible, and legal, for apps to access the personal and private data on mobile devices, from contact information, to photos and location data.

To protect themselves, consumers should only download apps from trusted sources; select the apps you wish to install on your device wisely; read the license agreement carefully during the installation process; read the list of permissions an app is requesting carefully. Do not simply click “next” during installation, without checking what you are agreeing to; and use a cybersecurity solution that will protect your device from cyberthreats.
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April 4, 2016
3 things you need to know about Hong Kong’s online shoppers
The line between browsing and buying online and offline in Hong Kong is blurring as technology enables nearly everything to become a digital touch point for consumers. Following the success of e-commerce boom in China, Hong Kong retailers are also keen to leverage the “online shopping fever” these years, and some e-tailers have started organizing similar Online Shopping Festivals in Hong Kong. But the real question is: what are the consumer perceptions toward these shopping events?

Based on our recent study, here are some highlights you ought to know about Hong Kong e-shoppers:

LESSON 1: KNOW YOUR CONSUMERS

Generally speaking, 88% of Hong Kong consumers shopped online in the past 12 months. The young generation (aged below 30) are all active e-shoppers, while one-third of the e-shoppers in Hong Kong purchased online within one week.

LESSON 2: KNOW YOUR POINT OF SALES

Over 80% consumer shop online through desktop computers, while two-out-of-five online shoppers choose their smartphone for e-shopping.

LESSON 3: KNOW YOUR PRODUCT STRATEGIES

The top three most popular categories for e-shoppers are clothing, travel package/ air tickets/ hotels, and restaurant coupons.

E-commerce is quickly becoming crucial to growth because creating a relevant, integrated and engaging shopping experience means winning offline as well.
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March 31, 2016
Here’s why new NFC-enabled SIM cards may flop in Singapore
The service is too costly. Singapore’s telco operators recently unveiled new NFC-powered SIM cards, which will allow commuters to pay fares using their mobile phones. The SIM cards will also be accepted at 30,000 ez-link terminals across the island.

However, the new SIM cards might fail to gain enough popularity because of several stumbling blocks, according to a report by DBS.

The report noted that the popularity of iPhones in Singapore is a big hurdle to the rise of the new SIM cards. The NFC-powered SIM cards are incompatible with iPhones, which only support Apple Pay and make up a third of mobile phone sales in the country.

DBS also highlighted that ez-link is not accepted at 7-11 stores and many other retail outlets, which prefer NETS and credit cards.

Apart from these hurdles, the cards are also extremely expensive at $37.50 apiece.

“EZ-link is not widely popular for retail transactions even in Singapore. Plus NFC enabled payment is not adding any security feature to the ez-link card while “Apple Pay” adds security to credit card transactions. So we do not see that the NFC enabled SIM based payments will be widely used. Anyway, telcos may not get much commission out of the transactions, as the bulk may go to ez-link for its large customer base using it for buses and trains,” the report noted.
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March 31, 2016
7 Tips for a Safe and Low-Priced Online Shopping Experience

The possibilities for online shopping seem endless. To buy clothing, electronics and even your groceries you don’t have to leave the house anymore. Buying online is usually cheaper than buying in store too, because you can find really great discounts and deals online.

But can you trust your mailman to deliver the package, won’t someone steal your package from your mailbox and how about the safety of online payments? Here we will share with you how to find discounts for your online shopping adventures and how to shop safely.

1. Choose cash on delivery

Well known webshops such as Lazada and Zalora give you the option to choose ‘cash on delivery’ (COD) as a payment method. In short, this means that you pay the delivery man in cash when he hands over the package to you on your doorstep. This way you only pay when you actually receive your package. Most of the time the delivery is free of charge. If you don’t want the hassle of staying at home until the postman arrives you can also let them deliver your package at work.

2. Look at reviews

Not too sure about the webshop you are about to order from? Get advice from others! You can check Trusted Company to view experiences per webshop from fellow shoppers.

3. Check payment security systems

Check if a webshop is Norton Secured and/or PCI DSS approved. The Norton Secure seal means that sensitive data is protected and the PCI DSS seal tells you that the security standards for account data protection are high. Your payment details are most likely to be secured when a webshop shows the two seals.

4. Shop at international shops

European and American shoppers have been shopping and paying online for ages already. They are not hesitating to pay online, simply because it always goes smoothly. Big international merchants, like Asos and The Body Shop are not trustworthy but also have good customer service. The only downfall is that international shipping will take longer.

5. Use discount code websites

Websites like Saleduck collect all discount codes and deals from webshops for you. When you are in the check-out process of a webshop and about to pay, a lot of webshops give you the option to fill in a discount code. If you don’t have a discount code, most of the time you can find one at a discount code website.

6. Get in app discounts

A lot of webshops really want to promote their app so they offer you a great discount when you download it. If you purchase something through their app for the first time, you can count on a nice discount, for example 15%.

7. Use credit card discounts

If you own a MasterCard, Citibank or CIMB Bank creditcard, you are in luck. A lot of webshops have special promotions for customers that pay with these cards. Discounts go up to an additional 25% off. Sometimes these offers are only valid on certain days, like MasterCard’s Monday promotions.

March 28, 2016
All eyes on Indonesia’s e-commerce pie
Squinting at the electronic tablet screen, shopkeeper Maihar tapped the colourful icons to top up her customer’s mobile phone credit.

“Today I sell phone credits. Tomorrow I will run an online grocery store from my bed,” the 59- year-old told The Sunday Times from her small provision shop in Jakarta, which she has been running for the past 20 years.

“I used to be ‘gaptek’. I knew only how to switch the computer on and off,” she said, using the Indonesian slang “gagap teknologi”, which refers to people who are technologically backward. “But the Internet is changing the way we do business so I am learning to use it.”

Madam Maihar made the plunge into cyberspace four months ago when she was introduced to Kudo, a local tech start-up which allows “agents” like her to sell clothes and concert tickets from its 10-odd merchant partners through a shopping application installed on its tablets.

So far, she has used it to pay utilities and phone bills for her customers. In return, she gets shopping discounts from Kudo.

GETTING ON THE DIGITAL BANDWAGON

I used to be ‘gaptek’. I knew only how to switch the computer on and off. But the Internet is changing the way we do business so I am learning to use it.

MADAM MAIHAR, an Indonesian shopkeeper, using the Indonesian slang “gagap teknologi” to refer to people who are technologically backward.

Small-time entrepreneurs like Madam Maihar as well as big capital owners and tech start-ups like Kudo and others, including from Singapore, are all eager for a piece of Indonesia’s e-commerce pie, valued at US$12 billion (S$16 billion) in 2014 and US$18 billion last year.

Billed as the next frontier in e-commerce after China and India, Indonesia’s market is expected to swell to US$130 billion in 2020, with an annual growth of 50 per cent, Information and Communications Technology Ministry spokesman Ismail Cawidu told The Sunday Times.

The government wants e-commerce to become “Indonesia’s backbone in digital economy so we can become the biggest in Southeast Asia in 2020”, he said. It will soon roll out a road map for the industry that will provide clear guidelines on logistics services, financing for start-ups, consumer protection, taxes and cyber security.

Recognising Indonesia’s digital potential, Singapore’s Foreign Minister Vivian Balakrishnan during a visit to Jakarta in January proposed a new partnership between the two neighbours.

“We believe Indonesian universities and technical institutes will produce many graduates with digital skills and we are thinking of launching a scheme in which Singapore companies which are looking for talent will be able to recruit talent here, deploy them here and provide services for the rest of the world,” Dr Balakrishnan said.

With nearly a third of its 250 million population able to access the Internet, seven in 10 of whom do so on their smartphones, Indonesia has a ready captive market.

This, coupled with low labour costs and growing affluence, is a big draw for budding tech firms.

Mr Ivan Tan, IE Singapore’s group director of South-east Asia Group, which has helped 50 Singapore firms to collaborate with Indonesian players, said: “The increased spending power of the middle class and the rapid adoption of new technology will drive e-commerce growth in this country.”

While traditional on-demand transport, food and shopping services such as Go-Jek motorcycle-hailing service and Tokopedia online marketplace continue to dominate the industry, new ventures such as UangTeman, which provides short-term micro loans online, and HaloDiana, a private virtual assistant, have sprung up.

Low Internet penetration rates and service gaps such as poor infrastructure which drive up logistical costs, patchy mobile connectivity and limited banking facilities have spawned a new breed of innovative businesses.

For instance, Kudo, whose investors include two from Singapore, targets the “have-nots” by recruiting agents in rural locations to shop on behalf of their less technologically savvy communities.

Bareksa, an investment portal start-up, allows people to start mutual funds online with only $10 without stepping into a bank.

Singapore firms also are jumping on the bandwagon, despite challenges such as language barrier, few business connections, foreign investment restrictions, bureaucracy and online payment problems.

SingPost said it has “a special arrangement with Pos Indonesia” with full online tracking and work sharing at a discounted price that helps to lower logistic costs and cut delivery times for Chinese e-commerce giant Alibaba merchants selling to the Indonesian market.

Mr Henry Chan, business development head at ShopBack, which returns a portion of cash to shoppers who buy through the website, said while China has high demand, its “competitiveness is also very, very high”.

“Indonesia is closer to home and something we can relate to a lot more on a cultural basis,” he said.

Despite an “imperfect ecosystem”, from unclear government regulations to Indonesians’ love for haggling, it is only a matter of time before the country completely embraces the idea of e-commerce, technology experts say.

Said Indonesian Internet Service Providers Association chairman Jamalul Izza: “There’s no way but up. When we are lazy to go out or get stuck in a traffic jam, what else is there to do but shop or buy food online?”
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March 28, 2016
Everything you need to know about payments, ecommerce, and venture capital in Indonesia

Macquarie’s annual conference in Jakarta on telecoms, technology, and ecommerce is one you shouldn’t miss. Last week, it brought together top decision makers in Indonesia’s digital economy.

Macquarie Group’s corporate advisory branch Macquarie Capital gained relevance in Asia’s tech industry through advising startups and tech companies on capital raising, IPOs, as well as mergers and acquisitions. It’s, for example, responsible for advising aCommerce and PropertyGuru on their recent fundraises.

Speakers at the event included Indonesia’s tech minister Rudiantara; executives of the three major telcos Telkom, Indosat, and XL; CEOs of retail giants; venture capitalists; and founders and CFOs of Indonesia’ most talked-about startups.

Here are two days of back-to-back panels, distilled into digestible insights.

1. A new ‘light touch’ approach to internet regulations

Indonesia produced its share of confusing headlines about internet policies. Suddenly it wants to regulate everything: ecommerce, transportation, foreign investments.

The new mantra is a “light touch approach” – allow change to happen and regulate where necessary.

While opaque announcements caused concern, it’s obvious the current administration sees the digital economy as a key factor defining Indonesia’s future. It’s willing to go great lengths to support its growth.

If you listen to tech minister Rudiantara or trade minister Thomas Lembong speak on the subject, you’ll hear their new mantra is a “light touch approach” – allow change to happen and regulate where necessary.

It may still take some time for the administration to adopt the new mantra, but Rudiantara demonstrated he walks the talk when he refused transportation minister Jonan’s request to block access to app-based transportation services Grab and Uber. The Macquarie event coincided with a day of massive street protests organized by the taxi industry.

Indonesia’s information and communications technology minister Rudiantara at a Tech in Asia event.

2. Retail’s inevitable shift to ecommerce is on the way

Similar to the changes in the transportation industry, a shift to ecommerce from offline retail is inevitable, Lippo Group director John Riady said. Consumers would eventually demand the higher convenience and product variety made possible by ecommerce.

Lippo Group was an early mover last year when it launched its ecommerce endeavor Matahari Mall. This year, most of the big traditional retailers in the archipelago are getting on board with ecommerce plans of their own. Luxury brand retailer Mitra Adiperkasa is one of them, launching Map Emall in February.

Lippo and Mitra Adiperkasa have taken different paths to achieving this shift to digital. Lippo’s strategy was to assemble a team of ecommerce professionals to start Matahari Mall from scratch as a separate corporation. Mitra Adiperkasa prefers to keep things close to home and manages its ecommerce site from within.

Both John Riady and Ravi Kumar, COO at Mitra Adiperkasa, agreed that logistics and payments are still challenges to overcome. Indonesian shoppers lack trust in online payments.

Facebook’s Head of ASEAN Kenneth Bishop offered advice on how to encourage customers to build trust: ecommerce applications should consider adding social features that let buyers ask questions before making a purchase.

Mitra Adiperkasa’s VP Sharma launches Map Emall.

3. A mobile world means engaging with customers around the clock

The challenges of creating online services for a mobile-first market cropped up often in the discussions. Large parts of Indonesia’s young generation are coming online for the first time with smartphones, and don’t have access to desktop computers.

Anthony Fung, the CEO of Zalora, and Fajrin Rasyid, CFO at Bukalapak, both observed that visits and transactions from mobile devices had overtaken those from desktop computers.

Along with the shift to mobile comes a shift to new shopping behaviours. Whereas most online shopping used to occur during work hours, that pattern is starting to fade. Potential customers can now be engaged throughout the day, and even late in the evening.

This requires brands to build even stronger emotional bonds with their customers. Zalora for example does this by focusing not only on selling products, but having a sense of fashion of its own. “If we want to be a fashion player, we need to be fashionable, know the trends, or even create them” said Anthony.

4. More Youtube stars and on-demand video portals

A more robust mobile infrastructure and Indonesia’s shift to 4G means streaming video on mobile devices is easier than ever.

Mobile phones are part of everyone’s lives.

This will likely lead to a digital video explosion this year. On one side that’s going to be user-generated content created by Indonesian millennials on platforms like YouTube, where social media stars like comedian Raditya Dika are already raking in millions of views on popular videos.

There will be an explosion of digital video content this year.

On the other are video streaming portals like iFlix, that offer quality international and regional video content for a subscription fee. iFlix will come to Indonesia in a tie-up with one of the local telcos, iFlix special advisor David Goldstein said at the Macquarie event.

It must have learned from US-based competitor Netflix’ mistakes. Netflix got blocked by Indonesia’s state telco Telkom and its mobile operator subsidiary Telkomsel after it launched here last month.

Video streaming is a sensitive issue in Indonesia for two reasons – first, content provided by on-demand portals will have to undergo the scrutiny of the local censorship body, and second, it eats up a lot of bandwidth, which is a challenge for the telcos.

Regional players who understand Indonesia’s cultural sensitivities and partner with telcos could have the upper hand in the archipelago – that’s clearly the path Malaysia’s iFlix intends to take.

5. Southeast Asia grows closer through startup mergers and acquisitions

Tech startups growing into regional enterprises in Southeast Asia is an ongoing trend.

Adrian Vanzyl, co-founder and CEO of Thailand-based Ardent Capital just went through a major merger with one of Ardent’s portfolio companies, Moxy. The women-focused ecommerce portal merged with Indonesia’s Bilna, forming Orami.

“Mergers and acquisitions are a really good way to expand into markets with speed and efficiency,” Adrian said.

After an initial phase of bringing together the teams and creating a new company culture, an effective merger or acquisition can be cost saving compared with trying to conquer a new market alone. “You’re in a new league of traction numbers and you can talk to a new league of investors,” Adrian explained, which is why he’s confident that we’ll see more merger and acquisitions in Southeast Asia’s tech sector this year.

Moxy and Bilna rebrand as Orami after a completing one of the biggest ecommerce mergers Southeast Asia has seen so far.

6. Profitability can wait

The potential in Indonesia’s digital economy is so good that startups should focus on growth and brand building, not immediate profitability.

Startups should focus on growth and brand building, not immediate profitability.

Most of the players in Indonesia’s startup ecosystem, whether big ecommerce companies like Matahari Mall or on-demand services like Go-Jek, are not profitable yet.

But that’s not the issue, John Riady said. “Focus on long-term value, not immediate profitability, make sure you can withstand trends and fluctuations,” he suggested.

What’s necessary is a clear path toward profitability. Bukalapak’s Fajrin Rasyid said ideally, a startup should be able to switch between a profitability mode and growth mode at will. However, the panel agreed, there are also market forces at play which may force a startup to spend more to stay in the race.

7. Waiting for a breakthrough in online payments

What’s needed to catapult Indonesia’s digital economy to the next level is an online payments system that is widely accepted, works smoothly on mobile devices, and makes it easy and safe for customers to pay for things online.

So far, there’s no such solution. Online payments are fragmented and complicated, which leads to many customers abandoning transactions.

“Ecommerce payment methods have changed little in the past year,” said Chris Eyles from Fusion Payments who moderated the fintech panel at the Macquarie Event. “Over 50 percent of ecommerce transactions are still paid for via asynchronous offline payments such as cash on delivery and bank transfers which is limiting ecommerce growth and costing online retailers a lot of lost orders,” he added.

Payments are best done offline in Indonesia.

One problem is that banks are still on the fence about their strategy in dealing with online transactions, which is holding back the entire ecosystem.

Indonesian banks, for now, seem to prefer mobile wallet systems, but it has led to a situation where each bank offers its own ewallet version.

Telcos also each have their own ewallets, but are planning closer collaboration in the future, which could possibly lead to the merger of the wallets of the three major telcos – a silver lining in Indonesia’s siloed payments landscape.

Chris also observed that Indonesia’s fintech ecosystem lacks funding. “Why has Indonesia yet to see any major investments in the fintech space despite hundreds of millions being invested in the local ecommerce industry?” he asked.

It could be due to unclear regulations, the dominance of banks, economic uncertainty, or a lack of suitable companies to invest in – most likely a mixture of all four factors.

What became obvious is that Indonesia needs a breakthrough in online payments for its digital economy to make a leap. If there’s no local solution, it could fall into the hands of a global player to fill that gap.

8. Investors continue to find value in Indonesia’s tech sector but are getting pickier

Anupam Garg, who leads Macquarie Capital’s telcos, media, and technology investments advisory in Asia, observed that the investing community still shows a great deal of optimism on the Indonesian technology space, despite there now being a higher focus on unit economics when assessing the value of individual businesses.

“We expect tech fundraising to continue to thrive in Indonesia with some potential pickup in M&A activities,” he said.

The general outlook was optimistic on a panel with VCs from some of the most active funds in Southeast Asia. The advice was to pick investments wisely, and to avoid certain verticals..

Steven Venada form CyberAgent Ventures said that there already are three big winners in the ecommerce space: classified, retailers, marketplace. He doesn’t see many more opportunities for startups in this space, “unless you can outgrow them by 10x,” he warned.

Better chances, according to him, are now in different verticals and niche markets.

Stefan Jung from Venturra Capital explained his own caution about investing in fintech. “Should I wait until the regulation in this space becomes more clear?” he asked. “But then maybe I’m too late. Fintech is one of the most outstanding opportunities on a global level.”

March 26, 2016
Here’s why Samsung wants to act like a startup
Samsung Electronics, the world’s largest maker of phones, memory chips and television sets, plans to revamp its authoritarian, top-down corporate culture to become more like a lean startup as it copes with sluggish demand and growing competition.

The company said Thursday its executives and workers pledged to reduce hierarchical practices, unnecessary meetings and excessive working hours in a “Startup Samsung” ceremony held Thursday at its headquarters in Suwon, South Korea.

The first step in this new culture of flexibility? Requiring all its executives to sign a statement promising to scrap the company’s traditional authoritarian ways.

Samsung is searching for new business strategies as a father-to-son leadership transition looms. Lee Jae-yong, 48, is expected to succeed his ailing father, Lee Kun-hee, at a time when Samsung’s mainstay semiconductor and phone businesses face intensifying competition from Chinese rivals. Samsung has its eye on expanding into health care and pharmaceuticals, but has responded slowly to hot Silicon Valley trends such as autonomous driving and artificial intelligence.

The company says it will announce in June how it plans to reorganize its workers and eliminate red tape. It said new vacation systems would allow employees to spend more time with their families and take breaks for self-improvement.

“By starting to reform the corporate culture, it means we will execute quickly, seek open communication culture and continue to innovate as a startup company,” Samsung said in a statement.

Samsung says it has been trying to reform its very Korean corporate culture to suit its identity as a global company and to answer criticisms that it stifles creativity and grassroots input from workers. Like most Korean companies, its management tends to mirror the authoritarian ways of South Korea’s past, when a military dictator ruled the country.

But analysts said Samsung faces a huge challenge in leveling a seniority-based corporate that is decades old. Some suggested the campaign also might be aimed at identifying underperforming workers and trimming the company’s managerial ranks to cut costs.

Samsung’s regimented, authoritarian ways may have helped it quickly catch up with Sony and other Japanese manufacturers, but they also have hindered recruitment of top talent. That has been a liability as the company competes with Silicon Valley firms that allow workers more independence and flexibility.

Last year, 26,000 Samsung employees participated in online debates, pitching in ideas. Some have been allowed to build products or launch services outside their original job descriptions at internal Samsung “startups.” The company also introduced flexible working hours last year though current employees said work hours are still too long.
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