Tag: etail

  • Zalora Enhances Customer Experiences Through a Single Personalization Platform from Evergage

    Zalora Enhances Customer Experiences Through a Single Personalization Platform from Evergage

    Evergage, the real-time personalization platform company, today announced that ZALORA, Asia’s leading online fashion destination, has selected Evergage to support its real-time personalization initiatives across all the company’s digital properties. In a move to streamline its personalization efforts, which previously involved multiple vendors, ZALORA chose Evergage to easily and comprehensively manage all aspects of Web personalization for the company. 

    Established in early 2012, ZALORA has dedicated websites for fashion consumers in Southeast Asia, Hong Kong and Taiwan. Offering a wide array of items from more than 500 top international and local brands, ZALORA gives customers access to thousands of products across a variety of categories online.

    Prior to its deployment of Evergage in July 2015, ZALORA was working with multiple vendors, each providing specific elements of personalization for the company’s websites. This made tailoring the customer experience in real time a challenge for the marketing team as they could access only a fragmented view of each customer, versus a holistic perspective encompassing each interaction with the brand. By tracking and interpreting visitors’ historical preferences, in-the-moment behavior and intent across platforms and touchpoints, Evergage provides a well-rounded and actionable view of visitors – so digital marketers can deliver personalized experiences at the 1:1 level across channels.

    ZALORA’s Regional Marketing Director, Patrick Steinbrenner, said: “In line with our efforts to streamline processes and improve efficiency in ZALORA, we needed to unify our personalization program under one single solution. Evergage’s comprehensive and acclaimed platform is the perfect fit for our needs. We’re pleased with our results so far, and look forward to using Evergage to drive even deeper levels of customer engagement.”

    Within the first three months of using Evergage, ZALORA launched several personalization campaigns – to communicate and capture email addresses at optimal times during shoppers’ visits – and has already seen a significant lift in conversion rates and revenue per user for its Web-based customers. Looking ahead, as ZALORA continues to advance its efforts with Evergage, delivering real-time personalization through ZALORA’s mobile app will be a key new initiative.

    ZALORA has seen significant increases in site traffic since Q1 2015, and working with Evergage, it will be able to maximize the benefits of this influx by supporting personalized, relevant experiences to site visitors. 

    “We’re thrilled to be working with ZALORA as they take their personalization efforts to the next level,” said Karl Wirth, CEO and co-founder of Evergage. “By delivering a single platform to manage every aspect of ZALORA’s real-time personalization program, we’re able to help them better understand each individual visitor and instantaneously provide a tailored shopping experience to drive more sales.”

  • E-commerce ‘unstoppable’ as 4G rollout goes rural in Thailand

    E-commerce ‘unstoppable’ as 4G rollout goes rural in Thailand

    On The Ground: Mobile will be the catalyst for digital-focused communications and online retail—aided by a data sector in its infancy. Apart from King Bhumibol Adulyadej, there is another unifying force in Thailand: mobile.

    Thailand is the world’s leader in mobile internet usage, ahead of Saudi Arabia and Malaysia, with four hours of web time per day, about 44 percent of a Thai’s total internet time. “Thailand is a mobile-led society, as is most of Southeast Asia except Singapore,” said Grant Bertoli, CEO of Marketbuzzz.

    Thailand did not see internet adoption kick in until the end of the Web 2.0 wave in 2007, and most of the access to the internet was through mobile. “Thailand leapfrogged straight to mobile as the primary device, and as people dwell longer on it, the mobile is increasingly becoming the device,” indicated Pathamawan Sathaporn, managing director of Mindshare Thailand.

    Smartphone ownership, largely driven by lower costs, has accelerated to a point where current We Are Social numbers show that 69 percent of Thais own at least one smartphone. Mobile connections, thanks to budget packages in the competitive telco market, stand at 122 percent as a percentage of the total population.

    With the realisation of 4G service in Thailand (more of which in tomorrow’s On The Ground feature), mobile will be the catalyst for digital-focused communications and rich-media content in 2016, said Rattakorn Potharam, general manager and executive creative director of MRM Thailand.

    “This is noteworthy as rural areas are now given a better chance at mobile ubiquity.” Potharam already observes content in three prominent categories: tear-jerking dramas, Thai-humour comedies and gossipy ‘insights’ transcending above-the-line formats to digital.

    Above average social use

    As the pool of mobile internet users in Thai provinces expands, social-media users will follow suit accordingly. Thai urbanites already spend more time on social networking than the global average, with Facebook being the most popular platform. In fact, Bangkok is the number one city of Facebook users in the world with over 104 percent penetration, according to Social Bakers. And 65 percent of all locals use Facebook to search for brand information according to eMarketer—the fourth highest in APAC.

    According to TNS, 74 percent of Thais also use instant messaging daily, well above the 55 percent worldwide figure. Line is the leading app in Thailand with more than 33 million users—that is half the Thai population using Line.

    These social platforms are playgrounds of expression for Thai consumers, but they are open only in their digital lives while more conservative in person. “Whatever we are expressing on Facebook, when it comes to reality we may not do so, as rooted in the Thai culture of being accommodating,” said Yupin Muntzing, chief executive officer of McCann Thailand. This dynamic can be inspiring for future developments in brand communications.

    E-commerce opportunities abound

    Coupled with that, there are numerous implications for marketing without the burden of a PC-internet legacy. Thailand being a mobile-first market allows businesses a unique position to capitalise.

    On the commerce side, Lazada began operations only a few years ago and made a bold statement to become the Amazon of Southeast Asia. And they were one of the first e-commerce players in the region to launch both iOS and Android apps. Now, the brand claims that more than half of its traffic comes from mobile.

    New faces in the e-commerce sector include Shopee, a mobile-only discounted marketplace, Eatigo offering daily lifestyle deals, and GrabBike (rebranded to Grab) delivering urban commuting services.

    In 2015, overall internet retail recorded healthy value growth of 30 percent to stand at THB47 billion (US$1.33 billion), according to Euromonitor, with fashion and consumer electronics significant contributors.

    The Thai e-commerce market is expected to more than triple in size to THB138.86 billion (US$3.94 billion) between now and 2020, according to DHL that introduced a next-day logistics addition to its delivery infrastructure in January for this reason. At present, Thailand’s share of the market is still relatively low compared to other high-growth economies, according to DHL E-commerce Asia Pacific CEO Malcolm Monteiro. Only 1.7 percent of DHL’s total sales in Thailand are from e-commerce, compared to more than 10 percent in China.

    Anisa Ngandee, research analyst at Euromonitor, is of the view that pure internet retailers such as Lazada, WeLoveShopping and iTrueMart perform much better than multi-channel players due to the shift in buying behaviour. The provision of mobile payments, especially when facilitated offline, will be a differentiator, Marketbuzzz’s Bertoli advised.

    “Although Thai people like shopping online, they find it more convenient to pay upon delivery, especially consumers within provincial areas. Sales are still limited to younger generations,” added Ngandee.

    In the meantime, MRM’s Potharam feels e-commerce will be “unstoppable and borderless”, at least among younger buyers on social media. “Thai consumers are born social. They are yearning for relationships, rapport and chemistry. In this sense, social commerce is undergoing a makeover to match this demand for socialising, while Line, Instagram and Facebook are becoming storefronts for interaction and conversation.”

    Social and content collide

    As a result, smaller Thai brands have embraced their entrepreneurial spirit in these mobile times, selling their products and services in as many ways as possible, whether Luuk Thep dolls or clothes. Preetanjali Kukreja, strategy director at Brand New Day, has noticed local businesses “getting a lot more aggressive” on Instagram, prioritising these accounts over official websites or Facebook pages. “Somehow it feels less intrusive on Instagram compared to Facebook,” she said. “It’s simple, quick, visual, and cheap as a sales tool. People just scroll through pictures of products, click to see the price, then ‘line’ the vendor and you’re done.”

    It is of little wonder that Line is one of the go-to channels for SMEs to reach consumers, not simply for shopping, but for lifestyle solutions as well, like content. The Feb 2015 launch of Line TV, competing with digital television, provided exclusive content to customers via mobile.

    Thailand now has a “huge appetite” for content across all forms—a push factor for advertising, media and even telecoms operators, said Sunee Paripunna, CEO of Omnicom Media Group Thailand. True Digital Plus, a Thai telco, has increased its budget from US$1 million to US$3 million to buy digital content in 2016, for example.

    In the past, Thai advertisers have focused their attention on content creation in the pursuit of digital marketing, but have missed opportune moments of context now made possible by mobile technology, said MRM’s Potharam. To reap the benefits of mobile, the key is gearing towards “contextual content” that is targeted and personalised. “The context will matter a lot and unveil new spot-on insights into creativity,” he said.

    Data driving integrated marketing

    Also, mobile development will open more doors for brands to collect real-time data generated by consumers who are connected online. Big data, though in its infancy stage, will transform communications, particularly for retail, telecoms, finance and lifestyle services, said Potharam.

    For starters, Julien Chalté, co-founder and co-CEO of WearYouWant, has gathered data to identify the bulk of the online retailer’s classic customers. “In December 2015, the profile that emerged was a 36 year old woman, living in Bangkok who likes to shop on Wednesdays between 11 am and 2 pm,” he said. Half of WearYouWant purchases were made during this shopping peak of the year. Outside of Bangkok, 20 percent of customers filled shopping carts from Chiang Mai, with white shoes being the favourite purchase during December. In Nonthaburi, home to a fifth (19 percent) of shoppers, skincare and makeup products were the top category. A tenth of customers placed orders in Chonburi and was mainly looking for black outfits (79 percent of all orders).

    With more data like the above, real integrated communication—“something marketers have dreamed of”, said Potharam—has potential to blossom in 2016. In the past, marketers have “tried to be visible everywhere in the digital world but were seldom standouts”. To steal a march on their rivals, brands need a “unified ecosystem of experiences under one enriching brand story”, he said.

    That represents a new canvas for shoppable content, stated Mindshare’s Sathaporn. “People will move more quickly from seeing to shopping”.

    As Thai advertisers compete to reach multi-tasking, ad-avoidant consumers, the type of content that will stick are reality shows, singing contests and other international content formats adapted for Thailand, said Sathaporn, who expects the domestic advertising industry to grow by only three to six percent in 2016—a lower growth forecast than 2015 amid economic uncertainties.

    So, even as Thailand’s king ails and its economy slithers, advertisers may be able to rely on mobile and content for continued joy.

  • Apple Pay to go live in China on February 18

    Apple Pay to go live in China on February 18

    Apple Inc’s Apple Pay mobile payment system will be available in China from February 18 for Industrial and Commercial Bank of China Ltd (ICBC) customers, bank representatives said in social media posts on Tuesday.

    The technology giant had previously said the system would launch in China in early 2016, making it Apple Pay’s fifth country as it accelerates development of a planned new revenue stream. ICBC is China’s biggest lender by assets.

    An Apple spokeswoman declined to comment on ICBC’s posts on the projected launch. The lender is set to be joined by a raft of peers: Apple’s China website lists 19 Chinese lenders as official Apple Pay partners, and state media reported two other lenders will also go live with the service from February 18.

    Greater China is Apple’s second-largest market by revenue, but the company faces an uphill battle to match that prowess quickly in mobile payments.

    Apple Pay’s beginnings have been less than auspicious in other markets, including scepticism from retailers in its home market. But in China, Apple Pay’s issue will be how to compete with dominant and entrenched players, serving shoppers well used to paying for goods and services with their handsets.

    China is the world’s biggest smartphone market. By the end of 2015, 358 million people, more than the population of the United States, had already taken to paying by mobile phone, according to the China Internet Network Information Center.

    Dominating those payments are China’s two biggest Internet companies: social networking and gaming firm Tencent Holdings Ltd and e-commerce company Alibaba Group Holding Ltd , through its Internet finance affiliate Ant Financial Services Group.

    Tencent operates WeChat Payment, while Ant Financial runs Alipay.

    Apple Pay has also struggled to gain traction with banks in some countries. In Australia, the four main banks are holding out against the new entrant. The company in Britain faced resistance from big banks over fees before relenting.

    Earlier on Tuesday, China’s state radio reported on its website that China Guangfa Bank Co Ltd and China Construction Bank Corp said on social media they would also launch Apple Pay on Feb. 18.

    A China Construction Bank spokesman declined to comment, while Guangfa could not be reached for comment.

  • e-money transactions reach Rp5.2 trillion

    e-money transactions reach Rp5.2 trillion

    Electronic money (e-money) transactions conducted in the country in 2015 reached Rp5.2 trillion in value, up from Rp4.3 trillion in 2014, Governor of Bank Indonesia(BI) Agus Martowardojo said.

    “In 2009, electronic money transactions were valued at about Rp520 billion only, and now they have reached Rp5.2 trillion,” the central bank governor said while opening the National Non-Cash Movement (GNNT) in Kupang, the provincial capital of East Nusa Tanggara (NTT) here on Saturday.

    Agus said the non-cash transaction system, either using prepaid cards, credit cards or electronic money, is very useful because it makes the financial system more efficient.

    With non-cash transactions, the state could reduce the use of banknotes and coins, making transactions more efficient and saving money on printing currency.

    “We are convinced that the non-cash system would be safer, more practical and more efficient,” Agus said.

    After all, the non-cash payment system can be used widely, such as while purchasing cellular phone minutes, shopping at malls or paying electricity and tap water bills.

    He said the e-commerce and non-cash transactions are predicted to continue to increase.

    “Non-cash payments could also be for online-transactions, resulting in efficient usage of time and economizing,” he added.

  • E-commerce expansion primed for Indonesian market

    E-commerce expansion primed for Indonesian market

    As smartphones become more commonplace in Indonesia, apps are enjoying a surge in popularity, suggesting that e-commerce – for both goods and services – is filling market voids and strengthening its economic foothold.

    Online trading and transport apps in particular are generating interest, offering a solid foundation for other start-ups, and attracting international players and financiers to the country.

    However, technology companies will be looking to further improvements in related services, such as logistics, and changes to foreign investment regulations to support continued expansion.

    The era of the app

    Since launching its mobile app in early 2015, Go-Jek, the Indonesian two-wheeled motorbike taxi service, has seen its market value rise as high as $400m and the number of registered drivers jump from 500 to 200,000.

    Also seeing the opportunity in the market, in May Malaysia’s Grab expanded into Jakarta, launching its GrabBike service, before introducing a car-based service several months later. The company is now active in at least five cities around the country, with plans to expand further in the coming year.

    The scale of the popularity of e-services was evidenced by the major backlash that Ignasius Jonan, minister of transport, faced last December when he attempted to ban transport apps like Go-Jek. Amid a public outcry and #SaveGojek trending on Twitter, the government quickly reversed its decision.

    Voicing his support for ride-hailing apps, President Joko Widodo told local media, “Innovation among the younger generation should not be stifled. Applications such as Go-Jek exist because they are in demand.”

    The growing use of ride-hailing apps signals a wider expansion under way across the country in e-commerce and mobile transactions.

    According to the Indonesian eCommerce Association, the country’s online market is projected to triple between 2014 and 2016 to reach Rp283trn ($20.8bn).

    While online sales represented around 1% of all retail sales in Indonesia in 2015, research firm eMarketer expects this share to grow to 4.4% by 2019, with e-commerce spending forecast to rise from $3.2bn to $10.9bn over the period.

    Major players moving in

    With a population of around 250m, Indonesia’s e-commerce potential has captured the attention of global technology and investment giants.

    In late January US-based e-commerce platform eBay confirmed plans to open an office in Indonesia, following in the footsteps of Twitter, which has had a base in the country since March. The move will see eBay build on its local partnership with state-owned telco Telkom, through which it operates the online shopping portal Blanja.

    For its part, the Chinese internet search company Baidu announced plans to boost investment in Indonesia, where it operates the MoboMarket app store with more than 500,000 products available for download.

    Major new domestic players are also entering the e-commerce scene. MatahariMall.com launched its operations in early September with $500m in backing from Indonesian real estate developer Lippo Group. Describing itself as the Alibaba of Indonesia, the firm said it hopes to become a driving force for e-commerce in the country.

    Hadi Wenas, the company’s CEO, suggested the site was created to mimic a brick-and-mortar shopping experience.

    “Just like an offline supermall, you enter, walk around and shop by floor. Each floor focuses on different categories,” he told media at the launch.

    Leading start-ups in Indonesia are also benefitting from international venture capital interest. Go-Jek, for example, attracted $6m in seed funding in mid-2014, with another $15m raised from US-based Sequoia Capital in April of last year.

    Further investment in the industry is likely to be spurred by the easing of foreign ownership limits in the e-commerce segment. Previously included on the country’s negative investment list, the government recently ruled to allow up to 33% foreign ownership of e-commerce ventures.

    More to be done

    However, some obstacles to sector growth remain. While internet connectivity is rapidly growing, it is coming from a smaller base than other countries in the region.

    The number of internet users in Indonesia reached 73m in 2015, or approximately 29% of the population, according to the Ministry of Communications and IT, significantly less than Malaysia (67.5%), Thailand (55.9%) or the Philippines (43%).

    A fragmented logistics landscape and underdeveloped payment infrastructure also present hurdles to expansion, with just 6% of Indonesians holding credit cards, according to a 2014 report by UBS.

    App developers will need to keep the characteristics of the market in mind when planning expansion. For example, a targeted approach is likely needed to attract Indonesia’s traditionally risk-averse and brand-loyal shoppers. A survey by McKinsey last year found that 63% of Indonesian consumers only buy products from brands they already know, suggesting word of mouth may be an important tool for growing local market share.

    E-commerce solutions are increasingly being used to bridge gaps in Indonesia’s infrastructure, with some start-ups helping firms extend their reach to rural areas.

    Start-ups looking for innovative ways of reaching rural customers are also employing a tactic known as assisted e-commerce, which uses technology to connect local stores with product distributors, helping to minimise geographic challenges and overcome low penetration of credit cards.

    Kudo, for example, which was founded in early 2014, offers online shopping through physical point-of-sale kiosks in public places.

  • MatahariMall.com Embraces Foreign E-Commerce Investment in Indonesia

    MatahariMall.com Embraces Foreign E-Commerce Investment in Indonesia

    When asked for his views on the issue, Hadi Wenas, the chief executive officer of MatahariMall.com, told reporters on Wednesday (10/02): “We are very optimistic. It will be business as usual for us, we are not afraid, not shocked or confused.”

    For foreigners, Indonesia is an attractive market for investment, particularly in the e-commerce sector, according to Indonesian E-commerce Association (idEA).

    The association estimated that the number of online shoppers in Indonesia could reach 10 million this year as the country’s middle class continues to grow. The e-commerce business is projected to rake in Rp 20 trillion ($1.49 billion) this year, double from last year’s estimated Rp 10 trillion.

    At the office launch of MatahariMall.com, Wenas noted that the same practice is common in Brazil, Russia, China and India, where local e-commerce firms are able to succeed in the market, supported by global investors, without the companies losing their identity.

    “With the support of Lippo Group, the biggest retail group in Indonesia, and the team we currently have, we are super solid now. Look at our campaign breakthrough. Foreigners won’t match our local taste in our ‘Lu mau apa?’ [(‘What do you want?’)] campaign,” Wenas said, referring to the company’s catch phrase.

    The Jakarta Globe and MatahariMall.com are both affiliated with the Lippo Group.

  • Thai shopping An e-commerce boom in the making

    Thai shopping An e-commerce boom in the making

    Thailand could be in for an online shopping boom. The country’s telecommunications infrastructure, payment settlement systems and logistics have long been somewhat underdeveloped. For years, the situation has discouraged mall operators and shoppers from jumping into e-commerce.

    Toshiya Matsuo, chief executive of Ookbee Mall (Thailand), center, announces the launch of Ookbee Mall, an online shopping site, in Bangkok in October 2015.

    Now that market is finally starting to grow.  Tokyo-based transcosmos, an e-commerce solutions provider, in October collaborated with Ookbee, a Thai e-book store operator, to create the Ookbee Mall website. Toshiya Matsuo, chief executive of Ookbee Mall (Thailand), is excited about the company’s better-than-expected sales. “Japanese cosmetics and fruit that are difficult to get here are selling particularly well,” he said.

    Ookbee Mall sells some 90,000 items and hopes to have 1 million customers by 2018. Matsuo said the company aims to set itself apart with a unique lineup of Japanese items, thereby sidestepping fierce competition in the Thai e-commerce space.

    Slow to take off

    In 2009, Rakuten, Japan’s big e-tail platform, bought TARAD Dot com, one of Thailand’s oldest online marketplace operators. The acquisition encouraged Thai communications conglomerate True Corp. and other parties to also get into online retailing in Thailand.Lazada of Germany landed in the country in 2012, and China’s Alibaba Group Holding came in 2014.

    START TODAY, the Japan-based operator of apparel retail website Zozotown, is a new contestant for Thailand’s Web shoppers. It recently formed a capital tie-up with Thai online clothing specialist WearYouWant Holdings.

    The market, however, has been slow to take off. Blame that on Thailand’s creaky mobile infrastructure and lack of reliable settlement services.

    To get things moving, Lazada at the end of last year established its own distribution centers.

    Watch your e-wallets

    In January, Deutsche Post DHL Group created a division to deal with domestic deliveries of online purchases at its Thai unit. The carrier has also built a distribution center in Bangkok. It plans to double the number of its Thailand delivery depos to more than 40 by 2017. The network offers next-day deliveries in Bangkok and surrounding areas. Elsewhere, it shoots for completing deliveries within three days.

    Another spur to online shopping is faster wireless communications. Political turmoil had halted the bidding process for fourth-generation mobile spectrum, but at the end of last year several auctions were held. A Thai mobile operator began offering 4G service in January.

    As Thailand’s cyberspace catches up with the times, online retailers are pouring money into new services. With 4G, sellers will be able to pitch their products with high-resolution video. DHL cited 4G as a key factor behind its e-commerce business in Thailand.

    According to Euromonitor International, a British market researcher, Thailand’s online retail market is expected to reach $3.21 billion by 2020, a 123% increase over 2015.

    As the market grows, Thais will have to guard their e-wallets from a wealth of online options.

  • China’s cross-border e-commerce boom is a boon for small retailers abroad

    China’s cross-border e-commerce boom is a boon for small retailers abroad

    After years of tepid growth, sales at several Australian vitamins, minerals, and supplements companies suddenly shot up by 20, 30, or even 40% in 2015. For those who know what happened that in China in late 2014 the source of this growth probably isn’t a big mystery: Regulators expanded a tax exemption to cross-border e-commerce.

    The resulting growth in trade has been dramatic, and for firms who have long eyed the big Chinese market but are too small to invest in finding a distribution partner or building a physical presence on their own, the boom of 2015 has delivered a revelation: They, too, can access the mainland market.

    E-commerce has of course been big in China for years, and in 2014 online retail sales totaled nearly US$430 billion, accounting for roughly 10% of all retail sales.  (The same figures for the United States were US$300 billion and 6.4%, respectively.)  Until recently, however, this activity was nearly all domestic – i.e., goods produced in or already shipped to China being sold to Chinese consumers.

    That makes perfect sense in light of the retail explosion of recent years:  China has more than 300,000 pharmacies, more than 2,000 mid-to-high end department stores, and supermarket catchment areas in urban areas are even smaller compared with the United States because of smaller formats and the lack of parking (and, until recently, widespread car ownership). Within this rapidly-developing retail landscape, however, some factors are driving consumers to prefer foreign products, whether bought once in China or ordered from abroad.

    Driving demand

    Food scandals are well-known and heavily publicized, from the baby-killing melamine-laced formula scandal of 2008 to the discovery this year of decades-old “vampire” meat.  In September, fake rice made from tiny pieces of rolled-up paper was even uncovered in Guangdong.  In light of such underhanded tactics, it is understandable that consumers might perceive foreign brands as safer and of higher quality.

    Price pressures pushing up consumer prices is another key issue.  Commercial rents, especially in first-tier cities such as Shanghai and Beijing, rival those in developed nations.  At the end of 2014, rents in Beijing’s Wangfujing averaged $480 per square foot per year vs. $360 for Singapore’s Orchard Road.  Wages, while still lower compared to western economies, are also rising quickly.

    Finally, Chinese consumers are becoming more sophisticated and better able to differentiate between local brands trying to pass themselves off as foreign and the real thing.  With travel increasing and the transparency in commerce that the internet can bring, tastes in products are becoming more global.

    Historic developments

    By as early as 2005, a Chinese consumer could order an album on Amazon and wait a few weeks for it to arrive—though naturally taxes and shipping often added to the price of the CD itself. But it wasn’t until the fourth quarter of 2014 that cross-border e-commerce really exploded.  The impetus was the application of a previously obscure piece of the tax code to cross-border e-commerce, implemented in a number of pilot cities.

    The personal effects tax originally targeted Chinese travelers who had emigrated abroad and were bringing back gifts – such as small appliances – for relatives.  Small items were exempt, but the tax was set at 10% for nearly everything else.  In late 2014, though, the government proclaimed that this personal effects tax also applied to cross-border e-commerce in certain pilot areas.  The effect was dramatic, as can be seen in the price differentials illustrated below.

    Obviously some costs, such as freight and insurance, are incurred whether selling through physical stores or cross-border e-commerce.  However, the price differential can be observed in following key areas, demonstrated with VMS products as an example:

    The nuts and bolts

    Business models for cross-border e-commerce can be viewed across two main dimensions: Whether the site serves as a platform that aggregates multiple sellers or sells its own products, and whether delivery to the consumer is made from the source country or from a bonded warehouse.

    Each model has its own quirks (see graphic below), and it is not yet clear whether there is an obvious winner.  It is likely that multiple models will co-exist –for example, a self-run, bonded import model could work for goods with the highest turnover (such as diapers and infant formula), while direct shipment models might better suit the long tail of less-frequently ordered items.

    In terms of product flow, though, the bonded import model has the clear advantage in terms of speed.  Consumers can receive product within days – sometimes only one or two – rather than weeks.

    With both models the seller can choose how much to take on internally, and how much to either outsource or hand over to a partner.  Hundreds of cross-border e-commerce companies have already sprung up in China, providing services that run the gamut from simple customs clearance all the way to a full consignment model.

    Local interests

    While e-commerce, including the cross-border variety, is here to stay, the advantages that it has over traditional imports may not last forever, depending on the product category.  In June of 2015, for example, China’s government lowered import duties on skin care products, which harmonized online and offline prices to an extent.  In 2016, import duties on additional products including handbags and suitcases are also slated to be slashed.

    Regulatory vacuums will likely be filled step-by-step as well.  For example, vitamin potency levels are regulated for products registered and sold in China, but currently these rules are not applied for cross-border e-commerce imports.  Local players are crying foul, and regulators will no doubt feel pressured to act.

    For now, though, cross-border e-commerce is helping to level the playing field by allowing smaller-scale companies to profitably access the vast China market while providing a huge boon in the form of savings and product diversity to Chinese consumers as well. Chalk one up for the little guys on both sides of the border.

  • Indonesia’s Elevenia marketplace gets $50 million from existing investors

    Indonesia’s Elevenia marketplace gets $50 million from existing investors

    Elevenia just raised another $50 million from its existing investors. The ecommerce marketplace is a joint venture of South Korean company SK Planet and Indonesian telco XL Axiata.

    Elevenia launched in Indonesia in early 2014 with an initial capital of $18.3 million from each partner. It has since received multiple capital injections from its parents, bringing Elevenia’s total funds – including the latest round – to about $110 million.
    The company claims to have clocked $95 million in revenue in 2015. It also says it has about 20,000 daily transactions and four million products listed from 30,000 sellers, with 40 million visitors.

    That’s double the figures it released around its first anniversary in early 2015. At that time, Elevenia announced 20 million visitors a month, 18,000 sellers, and two million product listings. It did not release revenue figures for 2014.

    Elevenia has been a steady yet somewhat quiet presence in Indonesia’s crowded ecommerce landscape. It competes alongside companies like Lazada, Bukalapak, Tokopedia, Qoo10, Rakuten, Blanja, Blibli and MatahariMall.

    With fresh funds at hand, it plans to grow its team, increase its marketing efforts, improve its product and services, and move to a new office, the company said in a statement.

  • Samsung Pay is coming to Singapore

    Samsung Pay is coming to Singapore

    South Korean technology giant Samsung Electronics is expanding its mobile payments service to three additional countries, including Singapore.

    The Korean company made the announcement during its press conference at the Consumer Electronics Show on Tuesday, held ahead of the show’s official opening. Samsung Pay allows consumers to pay at retail locations using their smartphones.

    It also confirmed the news in a Twitter update. “I am happy to announce we’re adding Australia, Singapore, and Brazil to the Samsung Pay roadmap,” said Samsung Electronics America President and COO Tim Baxter. No official date was announced for the three launches.

    The service launched last year in South Korea and the United States, with plans to enter other markets, including China, Spain and Britain.

    Samsung hopes the payments service will set its phones apart from competing devices, helping to protect market share against rivals such as Apple and Huawei Technologies and compel users to pay a bit more for the convenience. Apple announced in October last year its competing Apple Pay service was also coming to Singapore this year.

    Samsung has reported a strong response to Samsung Pay in its home country and the US, though the service does not generate revenue on its own for Samsung. An early advantage for Samsung Pay is its compatibility with magnetic stripe card readers already in wide use among retailers. In comparison, Apple Pay requires retailers to install new equipment supporting near-field communication technology.

  • Lessons of e-commerce explosion in China

    Lessons of e-commerce explosion in China

    The second World Internet Conference (WIC), also known as the Wuzhen Summit, will take place Dec 16 -18, in Wuzhen, Zhejiang. Chinese President Xi Jinping will attend the conference and address the opening ceremony. It takes place amid dramatic expansion of Chinese e-commerce, thanks to great market potential and the government’s supportive policies.

    In early spring, the State Council, China’s cabinet, announced it will boost e-commerce by cutting red tape and liberalizing investment regulation in the sector. Meanwhile, Premier Li Keqiang said that with the “Internet Plus” strategy China would back e-commerce development and guide the Chinese internet companies’ international expansion.

    In the mainland, e-commerce and other internet-based industries are supporting and accelerating the rebalancing of the Chinese economy toward consumption and innovation.

    In early November, transactions on the Singles Day — the Chinese version of the Valentine’s Day — morphed into a huge shopping extravaganza as the mainland consumers’ buying spree caused sales to soar almost 60 percent from last year. Although Alibaba, the e-commerce giant, started the online festival only seven years ago, its total sales alone climbed to 92 billion yuan (US$14.3 billion).

    To put the figure into an international perspective, it is more than quadruple the US earnings last year from its Black Friday and Cyber Monday sales events combined. Not surprisingly, Alibaba’s founder Jack Ma believes that Singles Day will go global.

    “In the next five years, I believe it may be in Tokyo, Paris or New York,” the e-commerce entrepreneur said.

    Chinese e-commerce is driven by heavy online buyers, younger demographics, and consumers in the relatively wealthier first-tier cities – although relative growth is even faster in many lower-tier cities and rural areas.

    These internet-based industries fuel the government’s 13th five-year plan that was officially outlined a month ago. Until recently, Chinese growth relied on investment and net exports, but that era ended with the global financial crisis. The new objective is to rebalance the Chinese economy toward consumption.

    Threat to traditional retailers

    Not everybody has benefited from Chinese e-commerce explosion, however. As the record sales on Single’s Day showed, online retailing poses an increasing threat to those brick-and-mortar retailers that continue to stay mainly offline.

    For the leading department store operators in China, online retailing remains limited and sales growth is weak. While Intime Retail may be best positioned to benefit from online retailing – not least because of its strategic cooperation with Alibaba – several other companies, including Golden Eagle Retail, Parkson Retail and Maoye International Holdings are only getting into the game.

    Golden Eagle and Maoye have collaborated with Tencent through the WeChat social platform, whereas Parkson has introduced an online shopping site.

    The explosion of Chinese e-commerce has caught off guard not just domestic retail leaders but international industry giants. Initially, these Western giants attributed their losses to China’s growth slowdown and the pullback by shoppers, which presumably accounted for their shrinking profit margins.

    However, the rapid explosion of e-commerce and the rising share of consumption in the Chinese economy cast doubt over such interpretations. Most importantly, a closer look at retailing trends in China suggests that it is not Chinese consumers or Chinese economy that accounts for the losses of these international industry giants – but competition.

    The famed Unilever, for instance, saw its sales fall off the cliff because it failed to go online fast enough. In June, Swiss food giant Nestle acknowledged that it failed to understand how retail was changing in China. The failure to move quickly and broadly into online retailing proved costly: the company had to burn instant coffee it could not sell in stores.

    The same goes for Colgate-Palmolive and Germany’s Beiersdorf, which have been suffering from offline overstocking, even as new online retailers have reaped enormous earnings.

    Intriguingly, some of these international giants have missed much of the Chinese e-commerce explosion, even though many have experienced two decades of e-commerce growth in the US, Europe and Japan. In these advanced economies, the e-commerce explosion took place differently, however.

    In the prosperous West, the Internet revolution initially relied on fixed-line personal computers and notebooks. In the emerging and developing East, such technologies remain relatively expensive. In these nations, the initial penetration has been fueled by mobile devices, particularly smartphones. In China, mobile drives retail sales growth and currently accounts for half of all e-commerce sales.

    The lessons are clear. First, business models that succeed in advanced economies may not work in emerging and developing economies. Second, advanced-economy lessons are vital but they must be adjusted to the Chinese business environment. Third, simple imitation of Western strategies does not ensure success in China. Only innovation can produce the desired results.

  • Shopping tech firm Powa in major Chinese joint venture

    Shopping tech firm Powa in major Chinese joint venture

    Powa Technologies, a British e-commerce tech firm, has formed a “strategic alliance” with China’s biggest payments processor, China UnionPay. The joint venture could generate $5bn (£3.3bn) in revenues over three years, Dan Wagner, Powa’s chairman and chief executive, told the BBC.

    China UnionPay has about 4.5 billion credit and debit card users worldwide.

    Powa’s technology enables shoppers to pay for goods quickly in-store and online using their smartphones.

    “This is undoubtedly a huge deal for Powa,” said electronic payments expert, Dave Birch of Hyperion Consulting.

    The joint venture, PowaTag UnionPay, will launch first in Guangdong Province, targeting 400,000 retailers, the company says, before rolling out to one million by the end of 2016.

    “We have a target to reach at least 50 million consumers regularly using the platform within one year from launch,” said PowaTag UnionPay’s chairman, Mr Hu Jinxiong.

    China’s merchants – there are six million in total – will pay about 13p per transaction to the joint venture for access to the technology, said Mr Wagner.

    ‘We’ve trumped Apple Pay’

    The PowaTag system relies on digital tags – quick response (QR) codes – that can be attached to physical goods or inserted into self-service checkout screens, emails, websites, posters, images – even the audio from TV ads.

    Wherever Chinese shoppers see the PowaTag UnionPay symbol they will be able to buy products by scanning them with their phones and tapping the “buy now” button, the company says.

    US retail giant Walmart recently launched a similar quick pay system for mobiles in its stores.

    China’s Commerce Department says the “online to offline” market, whereby shoppers search for products online then complete the purchase in-store, grew 80% in the first half of 2015 and is worth about £31bn ($47bn).

    “Why did China UnionPay decide to partner with a little British technology company?” said Mr Wagner. “We’ve trumped ApplePay and the rest of the world here.”

    ‘Tap-and-go’

    State-owned China UnionPay, has been responding to the rapid take-up of smartphones across the country – about 68% of the population now has one.

    On 12 December, it launched QuickPass – a “tap-and-go” payment system for mobile phones similar to Apple Pay and other digital wallets – in co-operation with more than 20 commercial banks.

    QuickPass is already available at more than 10,000 locations in mainland China, says UnionPay, including at retailers such as Carrefour, McDonald’s, and Costa.

    “The Chinese market is going mobile very quickly,” says Mr Birch. “And the integration of payment systems and messaging platforms such as WeChat is a very interesting development.”

    This latest deal with Powa will give Chinese shoppers yet another way to shop using their mobiles.

  • Zalora Wins Big with 12.12 Online Fever 2015

    Zalora Wins Big with 12.12 Online Fever 2015

    Zalora, Asia’s online fashion destination enjoyed strong support from fashion consumers across their eight markets – Singapore, Malaysia, Indonesia, Philippines, Thailand, Vietnam, Hong Kong and Taiwan – with over six times the volume of any previous day. A Zalora-led initiative, 12.12 Online Fever aims to drive the e-commerce industry across the region, bringing to consumers some of the best deals that will encourage online purchase, hoping to convert traditional consumers into e-consumers. This year 32% of 12.12 Online Fever shoppers are first-time Zalora customers.

    As Zalora is committed to giving customers the best online shopping experience, the team prepared for the surge of volume of orders to make sure that deliveries are fulfilled within the fastest time possible. To ensure timely packing and delivery of orders, so that excited customers can get their hands on their latest fashion purchase, Zalora increased manpower in operations working 24/7 in order to ship 100% of the packages received in its warehouses within 24 hours. This resulted to having 30% of packages delivered to customers within the next day and more than 50% of packages by end of day Monday, 14 December, across the region.

    The number of fashion thumb shoppers also increased, comprising 78.5% of shoppers who shopped through their mobile devices on Saturday 12 December compared to 21.5% who shopped on their desktops. This is in line with the changing consumer behaviour and the growing trend of consumers in the region shopping heavily through their mobile devices. The number of customers who shopped on Zalora through mobile had a 250% increase from last year.

    Female consumers had a strong showing as they cover 74% of shoppers during 12.12 Online Fever

    but the men did a lot of shopping too as they contribute 26% of the shoppers. The most popular categories for both male and female are apparel, footwear and accessories. Favourite brands among women include Rubi, Mango, Dorothy Perkins and Something Borrowed while Sperry, Herschel, Onitsuka Tiger and TOPMAN were popular brands for men. Zalora’s eponymous label was popular across markets and to both male and female shoppers.

    Netizens were also talking about 12.12 Online Fever in their social media posts, a few of them commending ZALORA’s quick delivery service and alerting their friends to join in. 12.12 Online Fever received more than 1.6 million of impressions on popular social media sites Facebook, Instagram and Twitter.

    Zalora Group CEO, Michele Ferrario shared, “12.12 Online Fever 2015 was a great success not only for ZALORA but for all the partners we worked with to make this initiative possible and for consumers who got their favourite fashion brands on great price point. We thank everyone who supported us. As Southeast Asia, Hong Kong and Taiwan are enjoying immense economic growth, we wanted to engage consumers and help boost the growth of e-commerce in the region. This online sales day will give them a push, sparking consumer spending by offering their favourite items at the best prices. Last year’s record sales attested that such a cyber event resonates well with consumers in the region, and we are happy that we managed to engage more consumers this year!”

    This year’s 12.12 Online Fever also saw an increase in number of partners with a total of 376 partners across the region covering different industries from food, home, entertainment, travel to beauty. Through large-scale online sales days such as 12.12 Online Fever, ZALORA aims to boost online retail consumption expenditure, while providing reassurances about the e-commerce sector and building trust with customers.

    12.12 Online Fever is an initiative to rally e-commerce players in the region to come together on one day and create Southeast Asia’s version of Cyber Monday. Southeast Asia is experiencing rapid

    economic growth, urbanisation and technology adoption, with 12.12 Online Fever, Zalora is bringing down barriers by making it more accessible for people in this region to buy fashion online where e- commerce is still in its infancy stage in many parts of Southeast Asia.

  • Online Sellers Tout Successful ‘Harbolnas’ Campaign

    Online Sellers Tout Successful ‘Harbolnas’ Campaign

    Anthony Fung, managing director of online fashion retailer Zalora Indonesia said in a statement on Monday that the company saw sales surge thirty-fold during the three-day shopping event, but did not give a figure.

    “Everything is going so well that we decided to extend this campaign one more day, until December 13, so that we can give consumers more opportunities to get their favorite fashion brands at Zalora,” Anthony added.

    MatahariMall.com, the e-commerce arm of the Lippo Group, with which the Jakarta Globe is affiliated, claimed that sales went up 10 times the daily average during Harbolnas, with electronic goods and smartphones leading sales, according to chief executive Hadi Wenas.

    Fair game

    The hefty discounts promised, including up to 99 percent from MatahariMall, have prompted concern from consumers and industry lobby groups.

    The Association of E-commerce in Indonesia, or idEA, issued a statement over the weekend urging Harbolnas participants to divulge the actual value of sales derived from the event. This is in order to “assert the potential of Indonesia’s e-commerce market from local and international perspectives,” citing similar practices by online retailers in the United States and China.

    “There is concern over the hype in huge discounts offered during Harbolnas,” said Tulus Abadi, chairman of the Indonesian Consumer Protection Foundation (YLKI), as quoted by Merdeka.com.

    He urged consumers to be cautious about wild-sounding deals online, noting that consumer protection was still largely unregulated by the government.

    Lazada Indonesia was among the companies under scrutiny for manipulating prices, after a customer spotted a seller on the online marketplace listing infant diapers at a pre-Harbolnas price of Rp 130 million ($9,210), before a discount of nearly 100 percent dropped the price to Rp 93,482.

    Lazada said in a subsequent statement that it was not the company’s policy to deceive customers and that the seller in question had been banned from the marketplace.

    Similarly, MatahariMall listed a PlayStation 4 game console at an initial Rp 10.8 million before discounting it to Rp 4.599 million. Other sellers list the price of the same item outside the Harbolnas at Rp 4.7 million.

    Faced with the rapid growth in online retail in Indonesia, the government is in the process of laying the groundwork for regulating the e-commerce industry, from foreign ownership and taxes to consumer protection and business models. A regulatory road map devised by the Communications and Information Technology Ministry is expected before the end of the year.

    At the same time, idEA said it was also currently devising an ethical code of conduct when offering promotions and discounts, which it aims to unveil in the first half of next year in a bid to boost consumer trust and satisfaction when shopping online.

  • MatahariMall.com, Pos Indonesia in Tandem to Boost E-Commerce

    MatahariMall.com, Pos Indonesia in Tandem to Boost E-Commerce

    Pos Indonesia will also install MatahariMall.com “eLockers,” allowing customers to physically pick up their items purchased online from lockers located in ten post offices in the Greater Jakarta area and Bandung.

    Using these services, online shoppers can also arrange delivery of their reserved items to these pickup points, instead of their home or office address, to avoid missing goods upon arrival.

    Pos Indonesia also agreed to provide logistic and delivery services to Mataharimall.com for domestic shipments.

    Like MatahariMall.com, the Jakarta Globe is affiliated with the Lippo Group.