Internet E-Commerce In ASEAN - Taking Off - Jefferies
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Singapore | Technology
Internet 21 April 2016
EQUITY RESEARCH GLOBAL
Internet
E-Commerce In ASEAN - Taking Off
Key Takeaway
The ASEAN market is expected to have 350mn internet users by 2018, the
third large block of users after China and India. E-tailing is by far the largest
opportunity for local players and is likely to be a US$30-40bn market by 2020.
There are already six private companies in this space that are estimated to be
valued at over US$1bn, but few in the listed space. We expect that to change
over the next few years.
Large Market, Significant Potential - Expect more listings. The Asean region
represents the third large block of internet users in Asia, after China and India, with 250mn
users currently and expected to rise to 350mn by 2018. The smartphone wave has been
pivotal to rising internet penetration and growth of e-commerce with more than 50% of
traffic and transactions in most segments now coming through mobile. Even though there
are currently only three listed players in the internet/e-commerce space valued above US
$100mn, there are at least six private companies that are reported to be valued over US
$1bn. Funding activity in private markets first picked up in 2013 but has seen an acceleration
in recent quarters with over US$1bn being raised in 2016 till date. We expect more listings
over the next few years. Two markets stand out – Singapore, a developed economy and a
good test market and Indonesia, which is potentially the largest market in the region.
E-tailing US$30-40bn opportunity by 2020; travel, gaming, classifieds the
other key segments. With Search and Social network segments being cornered by
global players like Google, Facebook, Whatsapp and WeChat, e-tailing is by far the biggest
opportunity for local players in the sector. It has also accounted for close to 70% of the fund
flow into the sector. We estimate that the regional e-tailing market, which is currently likely
to be close to US$10bn, will grow to US$30-40bn by 2020. There are a large number of local
players, with Lazada, Tokopedia, Bukalapak, Qoo10 and Lelong being some of the largest.
Amongst horizontal players, marketplace is the dominant model while many of the vertical
players do inventory based selling. Cash on delivery and manual banking are dominant
payment methods across most of the region. Logistics companies like SingPost are also
likely to be significant beneficiaries of the e-tailing boom. Travel, classified and gaming are
other key segments with notable local companies such as Grab, Traveloka, PropertyGuru,
JobStreet, Garena and VNG. Indonesia and Vietnam appear to be the best suited markets for
emergence of local players.
Challenges around divergence between countries, regulations and logistics. We
believe the key challenges to e-commerce/internet companies in the region are around
1) divergence in key areas across countries such as stage of development/income levels,
languages, data connectivity infrastructure and extent of regulatory oversight. As a result
unit economics can be different in different countries and it is often necessary to have
significant local presence 2) regulatory hurdles particularly in Indonesia, Philippines and Arya Sen *
Vietnam, which rank low in the ease of doing business and 3) logistics related challenges, Equity Analyst
particularly outside of Singapore and Malaysia. +91 22 4224 6122 asen@jefferies.com
Abhijit Attavar §
Investment Ideas. Most of the listed e-commerce/internet players in the region are fairly Equity Analyst
+65 6551 3960 aattavar@jefferies.com
small - only three, Xurpas (X PM; Gaming company in Philippines), iCarAsia (ICQ AU; Ranjeet Jaiswal *
Automobile classified) and Migme (MIG AU; Social networking app) are over US$100mn Equity Associate
in market-cap but even these are well below US$1bn. Amongst the larger stocks, SingPost +91 22 4224 6114 rjaiswal@jefferies.com
* Jefferies India Private Limited
(SPPOST SP; 33% of revenues are related to e-commerce), Rocket Internet (RKET GR; Stakes in
§ Jefferies Singapore Limited
Lazada, Zalora, Carmudi and ZenRooms, Singapore Press Holdings (SPH SP; Owns a number MCI (P) 084/07/2015
of classified sites as well as stake in Qoo10) have material exposure to internet/e-commerce
in the region. In Singapore, we expect rising online spend to positively impact logistics
companies and telcos and negatively impact retailers.
Jefferies does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that Jefferies may have a
conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment
decision. Please see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 46 to 49
of this report.Technology
Internet
21 April 2016
Focus Charts
Exhibit 1: Smartphone wave has been pivotal to growth of Exhibit 2: Sharp increase in private market funding for the
e-commerce in the region – over 50% of tx through mobile sector from 2013 – 2016YTD has been particularly strong
Source: Rocket Internet Source: Jefferies, media reports
Exhibit 3: E-tailing by far the largest opportunity for local Exhibit 4: Singapore, the favourite place to base the
players – has accounted for 68% of the funding company; Indonesia, potentially the largest market
Source: Jefferies, media reports Source: Jefferies, media reports
Exhibit 5: The six “unicorns” so far in the region, as per Exhibit 6: Singapore Press Holdings, Rocket Internet,
media reports SingPost some of the large listed market plays
Source: Jefferies, media reports Source: Jefferies, Bloomberg
page 2 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Investment Ideas In Listed Market
Exhibit 7: Listed companies in internet/e-commerce space in South East Asia
S.No Company B'berg Exchange Segment Description Mkt cap HQ Listing Countries
ticker (US$mn) Yr.
1 Xurpas X PM Philippines Gaming Gaming & Ent. 708 Philippines 2014 Singapore, Philippines, Indonesia
2 iCarAsia ICQ AU Australia Classified Automobile classified 169 Malaysia 2012 Malaysia, Thailand, Indonesia
3 Migme MIG AU Australia Social Provides chat, 163 Singapore 2001 Singapore, Malaysia, Indonesia, Taiwan, Hong Kong, Australia
Network microblogging etc.
4 JobStreet JOBS MK Malaysia Classified Recruitment classified 63 Malaysia 2005 Singapore, Malaysia, Philippines, Indonesia, Vietnam
5 Ensogo E88 AU Australia E-tailing Deals & discounts 49 Thailand 2013 Singapore, Malaysia, Philippines, Indonesia, Thailand, Hong Kong, US
6 Asiatravel AST SP Singapore Travel Online travel agent 48 Singapore 2001 Singapore, Malaysia, Indonesia, Thailand, Philippines, Hong Kong, China, UAE
7 MOL group MOLG US Payments Payment Gateway 45 Malaysia 2014 Singapore, Malaysia, Indonesia, Thailand, Philippines, India, Australia, NZ
US
8 Asiasoft Corp. AS TB Thailand Gaming Online Gaming 28 Thailand 2008 SEA (6),Cambodia, Burma
9 Netccentric NCL AU Australia Advertising Digital Media 28 Singapore 2015 Singapore, Malaysia, Australia, Philippines, Thailand, China, UK
advertisement
10 Rev Asia REV MK Malaysia News & Ent. Owns multiple news & 18 Malaysia 2011 SEA(6)
entertainment website
Source: Jefferies, Bloomberg
Exhibit 8: Listed companies with some exposure to internet/e-commerce space in South East Asia
S.No Company Ticker Exchange Mktcap Nature of exposure to ASEAN e-commerce
(US$bn)
1 Singapore Press Holding SPH SP Singapore 4.7 Acquired SgCarMart and owns many classified sites - ST Jobs, STProperty, STCars, STClassifieds etc. Stake in Qoo10
2 Rocket Internet RKET GR Germany 4.6 Investment in companies such as Lazada, Zalora, Foodpanda, Carmudi and Zen Rooms in South East Asia
3 Matahari Department Store LPPF IJ Indonesia 4.1 Invested US$500mn in own e-commerce venture
4 Singpost SPOST SP Singapore 2.5 Launched "SP ecommerce" as a full service end-to-end e-commerce logistic solution provider
5 Mapletree Logistics MLT SP Singapore 1.9 Owns warehouses across Asia including 3 countries of SEA (SG, MA, VI)
6 GD Express GDX MK Malaysia 0.6 Provides Logistic Services in Malaysia and Singapore. Plans to grow in e-commerce Logistics
7 Thegiodidong MWG VN Vietnam 0.5 Mobile retail chain operator with online channel
8 Pos Malaysia POSM MK Malaysia 0.4 Launched e-Commerce Hub in Malaysia for providing logistic services to e-commerce companies
9 WHA Warehouse WHAPF TB Thailand 0.3 Owns various warehouse in ASEAN countries
Source: Jefferies, Bloomberg
Exhibit 9: Impact of rising online spend across sectors in Singapore
Company B’berg ticker Price (SGD) JEF Rating MCap (US$m) Impact Impact of E-commerce on industry/ sector
Data Center REITs Increased demand for data center space
Keppel DC REIT KDCREIT SP 1.09 NC 718 +ve
Retail Malls -ve Higher online share of retail spend could adversely affect demand for store-fronts
Mapletree Commercial Trust MCT SP 1.47 Hold 2,336
CapitaMall Trust CT SP 2.12 NC 5,603
Fraser Centerpoint Trust FCT SP 2.02 NC 1,370
Industrial/ Logistics Space +ve Demand for modern warehousing/logistics assets could rise
AREIT AREIT SP 2.50 Buy 4,973
Mapletree Logistics MLT SP 1.03 Buy 1,904
Aims AMP AAREIT SP 1.35 Hold 640
Logistics and distribution +ve Warehousing and last-mile delivery capability will become important
Singapore Post SPOST SP 1.65 NC 2,500
Mass-market retailing -ve Increased competition from online marts
Shen Siong SSG SP 0.87 NC 970
Telcos +ve More data-traffic, mobile wallets could get more popular
Singtel ST SP 3.95 Buy 47,000
Starhub STH SP 3.34 Underperform 4,311
M1 M1 SP 2.48 Hold 1,720
Source: Jefferies estimates, Bloomberg
page 3 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Table of Contents
FOCUS CHARTS ............................................................................................................................ 2
INVESTMENT IDEAS IN LISTED MARKET ....................................................................................... 3
EXECUTIVE SUMMARY ................................................................................................................ 5
E-COMMERCE IN ASEAN – TAKING OFF........................................................................................ 6
ASEAN – Over 250mn internet users, likely to rise to 350mn by 2018 ......................................... 6
Smartphone wave a key driver of growth of internet adoption and e-commerce ....................... 7
Funding activity in private markets has picked up since 2013, expect strong 2016 ..................... 9
Few listed players for now – expect more listings going forward ............................................... 10
Singapore and Indonesian markets stand out ............................................................................ 12
E-TAILING THE BIG OPPORTUNITY; TRAVEL, CLASSIFIED, GAMING OTHER KEY SEGMENTS ......... 15
Search, Social network, messaging dominated by the global players ......................................... 15
E-tailing the big opportunity – potentially a US$30-40bn market by 2020 ................................. 16
Travel, classified, entertainment the other key segments with local players ............................. 19
CHALLENGES AROUND DIVERGENCE BETWEEN COUNTRIES ON REGULATIONS AND LOGISTICS . 22
1. Divergence across countries a key challenge .......................................................................... 22
2. Regulatory hurdles, particularly in Indonesia, Philippines and Vietnam ................................. 23
3. Logistics related challenges .................................................................................................... 23
COMPANY PROFILES.................................................................................................................. 25
Garena – Asean’s Budding Tencent ............................................................................................ 26
Grab - The Local Challenge to Uber ............................................................................................ 30
PropertyGuru – Focus and localisation ....................................................................................... 33
Lazada – Alibaba’s Proxy in South East Asia................................................................................ 37
Tokopedia – Indonesia’s Taobao ................................................................................................ 38
SingPost – E-commerce Logistics Driving Growth ....................................................................... 39
VNG – Leading Internet Company in Vietnam ............................................................................ 40
APPENDIX-1: PRIVATE MARKET FUNDING IN ASEAN INTERNET/E-COMMERCE .......................... 41
APPENDIX-2: SINGAPORE START-UP ECOSYSTEM ...................................................................... 43
page 4 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Executive Summary
E-commerce in ASEAN – Taking Off
ASEAN region is expected to have The ASEAN region represents the third large block of internet users in Asia, after China and
350mn internet users by 2018 – few India, with 250mn users currently and expected to rise to 350mn by 2018. The
large listed players now but there are smartphone wave has been pivotal to rising internet penetration and growth of e-
six “unicorns” in the private market commerce in the region with more than 50% of traffic and transactions in most segments
– we expect more listings going now taking place through the mobile platform. Even though there are currently only three
forward listed players in the internet/e-commerce space valued above US$100mn, there are at
least six private companies reported to be valued over US$1bn. Funding activity in private
markets first picked up in 2013 but has seen an acceleration in recent quarters with over
US$1bn being raised in 2016 till date. We expect more listings over the next few years.
Two markets stand out – Singapore which is a developed economy and a good test
market for ideas and Indonesia which is potentially the largest market in the region.
E-tailing US$30-40bn opportunity by 2020; travel,
gaming, classifieds the other key segments
E-tailing is the largest opportunity for With Search and Social network segments being cornered by global players like Google,
local players and could be a US$30- Facebook, Whatsapp and WeChat, e-tailing is by far the biggest opportunity for local
40bn market by 2020; Travel, players in the sector. It has also accounted for close to 70% of the fund flow into the
gaming, classified and gaming the sector. We estimate that the regional e-tailing market which is currently likely to be close
other segments with local players to US$10bn will grow to US$30-40bn by 2020. There are a large number of local players
with Lazada, Tokopedia, Bukalapak, Qoo10 and Lelong being some of the largest.
Amongst horizontal players, marketplace is the dominant model while many of the
vertical players do inventory based selling. Cash on delivery and manual banking are
dominant payment methods across most of the region. Logistics companies like SingPost
are also likely to be significant beneficiaries of the e-tailing boom. Travel, classified and
gaming are other key segments with notable local companies such as Grab, Traveloka,
PropertyGuru, JobStreet, Garena and VNG. Indonesia and Vietnam appear to be the best
suited markets for the emergence of local players.
Challenges around divergence between countries,
regulations and logistics
Key challenges are around We believe the key challenges to e-commerce/internet companies in the region are
divergence across Asean countries, in around 1) divergence in key areas across countries such as stage of development/income
languages, regulatory hurdles and levels, languages, data connectivity infrastructure and extent of regulatory oversight. As a
logistic issues result unit economics can be different in different countries and it is often necessary to
have a significant local presence 2) regulatory hurdles particularly in Indonesia,
Philippines and Vietnam which rank low in the ease of doing business and 3) logistics
related challenges, particularly outside of Singapore and Malaysia
Investment Ideas in listed market
Xurpas, ICarAsia and Migme are Most of the listed e-commerce/internet players in the region are fairly small - only three,
direct listed market plays but all well Xurpas (X PM – Gaming company in Philippines), iCarAsia (ICQ AU – Automobile
below US$1bn in market-cap; classified) and Migme (MIG AU – Social networking app) are over US$100mn in market-
SingPost, Rocket Internet and cap but even these are well below US$1bn. Amongst the larger stocks, SingPost (SPPOST
Singapore Press Holdings are some SP - 33% of revenues are related to e-commerce), Rocket Internet (RKET GR – Stakes in
of the larger listed market plays with Lazada, Zalora, Carmudi and ZenRooms, Singapore Press Holdings (SPH SP – Owns a
exposure to this theme number of classified sites as well as stake in Qoo10) have material exposure to internet/e-
commerce in the region. In Singapore, we expect rising online spend to positively impact
logistics companies and telcos and negatively impact retailers.
page 5 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
E-commerce in ASEAN – Taking Off
ASEAN region is expected to have The ASEAN region represents the third large block of internet users in Asia, after China and
350mn internet users by 2018 – few India, with 250mn users currently and expected to rise to 350mn by 2018. The
large listed players now but there are smartphone wave has been pivotal to rising internet penetration and growth of e-
six “unicorns” in the private market commerce in the region with more than 50% of traffic and transactions in most segments
– we expect more listings going now taking place through the mobile platform. Even though there are currently only three
forward listed players in the internet/e-commerce space valued above US$100mn, there are at
least six private companies reported to be valued over US$1bn. Funding activity in private
markets first picked up in 2013 but has seen a sharp acceleration in recent quarters with
over US$1bn being raised in 2016 till date. We expect more listings over the next few
years. Two markets stand out – Singapore a developed economy and a good test market
for ideas and Indonesia which is potentially the largest market in the region.
ASEAN – Over 250mn internet users, likely to rise
to 350mn by 2018
ASEAN – 250mn internet users After China and India, the ASEAN region represents the next large opportunity for the
currently, expected to rise to 350mn growth of e-commerce and internet companies in Asia. With a combined population of
by 2018 630mn (which would put it at #3 in global population rank after China and India) and
combined nominal GDP of US$2.5tn (#5 in global GDP rank after EU, US, China and
Japan), the region has significant potential. In fact the average GDP per capita of the
ASEAN region at US$4k is 2.5x that of India at US$1.6k. The region is also more urbanized
with 47% of the population living in urban centres (vs. 31% for India) with nearly 45mn
people spread across the top 6 cities alone (which also rank within the top 50 cities by
population, globally).
Exhibit 10: ASEAN region
Singapore Indonesia Malaysia Thailand Philippines Vietnam Cambodia Myanmar Laos Brunei ASEAN India China
Population (mn) 5.5 258.7 30.9 65.3 103.0 91.7 15.6 54.4 6.5 0.4 632 1,286 1,376
Population rank 113 4 45 20 12 14 71 26 107 171 3 2 1
GDP per capita (US$) 56,286 3,514 10,829 5,560 2,843 2,052 1,084 1,204 1,707 40,776 3,971 1,582 7,594
GDP (US$bn) 308 889 327 405 285 171 15 64 11 16 2,491 2,067 10,360
Urbanization (%) 100% 51% 73% 54% 49% 31% 21% 34% 38% 77% 47% 31% 55%
Internet penetration (%) 82% 34% 68% 56% 46% 50% 32% 13% 14% 74% 41% 28% 49%
Internet users (mn) 5 88 21 37 47 46 5 7 1 0.3 257 360 674
Active social media users (%) 65% 30% 60% 55% 45% 35% n/a n/a n/a n/a 34% 10% 50%
Source: Jefferies, World Bank
Exhibit 11: Nearly 45mn people live in the top 6 cities of the region
S.No City Country Population (mn) Global population rank
1 Jakarta Indonesia 10.1 14
2 Bangkok Thailand 8.3 24
3 Ho Chi Minh City Vietnam 8.2 25
4 Hanoi Vietnam 7.2 34
5 Singapore Singapore 5.5 47
6 Yangon Myanmar 5.2 49
Total n/a 44.6 n/a
Source: Jefferies, UN reports
We estimate the total number of internet users in the region to be over 250mn but at 41%
internet penetration, there is significant scope for growth in the user base itself. This is
particularly true of Indonesia which despite contributing the most number of users in
absolute terms has internet penetration of only 34%. In fact even the existing base is a
result of sharp acceleration in internet penetration in the last 2 years from 20-25% in
2011-13 to over 40% currently, helped undoubtedly by rising smartphone penetration.
We believe the number of internet users is likely to increase to over 350mn over the next
3-4 years implying an internet penetration of 55%. Indonesia, Philippines, Vietnam and
Myanmar are likely to be some of the biggest contributors to the rise in user base.
page 6 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Exhibit 12: Number of internet users (mn) Exhibit 13: Internet penetration across countries
Source: Jefferies estimates, media reports Source: Jefferies estimates, media reports
Exhibit 14: Internet penetration in ASEAN region has doubled in the last 5
years with acceleration in the last 2 years
Source: Jefferies, media reports
Smartphone wave a key driver of growth of
internet adoption and e-commerce
Smartphone wave has been pivotal We believe rising smartphone sales and penetration are a key driver of acceleration in
to internet adoption and growth of internet penetration and growth of e-commerce in the region. With broadband
e-commerce in the region – over penetration below 10% in most countries, mobile internet is critical for internet usage. We
50% of traffic and transactions now understand that in Indonesia, Thailand, Malaysia and Singapore, over 50% of web traffic is
happening over mobile already through mobiles. This is expected to rise further as smartphone penetration rises
from the current 35-45% in most of these countries. Poor data speed is an impediment
but there has been a marked improvement in internet connectivity over the last 12
months, particularly in Indonesia where average data speeds are reported to have
doubled.
page 7 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Exhibit 15: Smartphone sales in region has picked up sharply over last 3 years
Source: Jefferies estimates, IDC
Exhibit 16: Broadband penetration is low particularly in Exhibit 17: Already 50% or more of web traffic is coming
Indonesia through mobiles in most countries
Source: Jefferies, ITU Source: Jefferies estimates, media reports
Exhibit 18: Internet speeds in the region are still poor with Exhibit 19: However there has been a marked improvement
the exception of Singapore & Thailand in data speeds particularly in Indonesia over the last year
Source: Jefferies, Akamai’s Fourth Quarter, 2015 State of the Source: Jefferies, Akamai’s Fourth Quarter, 2015 State of the
Internet Report: https://www.akamai.com/stateoftheinternet. Internet Report: https://www.akamai.com/stateoftheinternet.
page 8 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
The sharp acceleration in mobile internet and commerce is perhaps best evident in the
chart below that shows the proportion of Lazada’s GMV through mobile vs. desktop: from
less than 20% in March, 2014, sales though mobile platform has increased to close to
60% by September, 2015 i.e. in just 18 months.
Exhibit 20: 60% of Lazada’s sales are now through mobile platform, up from
20% only 2 years back
Source: Jefferies, Rocket Internet
Funding activity in private markets has picked up
since 2013, expect strong 2016
Private market funding in the space Rocket Internet’s investments in Foodpanda (in March, 2012), Lazada (in November,
has picked up since 2013; over 2012) and Zalora (in May 2013) were an inflection point for PE/VC fund flow into the
US$1bn raised already in 2016 ASEAN internet/e-commerce sector in our view. Since then fund flow into the sector has
increased steadily with nearly US$1.6bn of PE/VC money being raised in 2015 and almost
US$3.5bn in the last 3 years. Yet, this is significantly lower than the US$10bn+ of PE/VC
money raised by Indian internet companies in the same period. As a result, we believe
these are still early days for e-commerce in the region. On the other hand, this may also
imply that valuations are still relatively reasonable in the region and growth has been
driven to a much lesser extent by discounting and freebies than has been the case in India.
Exhibit 21: PE/VC funding into the space has picked up Exhibit 22: There have been over 100 deals since 2011 of
sharply since 2013 over US$2.5mn
Note: Only deals above US$2.5mn considered; Source: Jefferies, Note: Only deals above US$2.5mn considered; Source: Jefferies,
media reports media reports
page 9 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Exhibit 23: Companies that have raised over US$50mn since 2011
S.No Company Segment Sub-segment Amt raised (US$mn) Founded in Investors
1 Lazada E-tailing Horizontal e-tailing 1,186 2,012 Alibaba, Rocket Internet, Temasek, Kinnevik, Tengelmann, Tesco, Summit Partners
2 Grab Travel Cab booking 680 2,011 SoftBank, Tiger Global, China Investment Corp, Coatue
3 Matahari Mall E-tailing Horizontal e-tailing 500 2,015 Lippo Group
4 SingPost E-com Logistics E-commerce logistics 457 n/a Alibaba
5 Tokopedia E-tailing Horizontal e-tailing 248 2,009 Softbank
6 Zalora E-tailing Fashion e-tailing 212 2,012 Rocket Internet, Tengelmann Ventures, Kinnevik, Summit Partners, Access Industries
7 Garena Gaming Gaming, e-tailing 170 2,008 Khazanah Nasional Berhad
8 PropertyGuru Classified Real estate classified 129 2,007 Emtek, Square Peg Capital, TPG
9 Qoo10 E-tailing Horizontal e-tailing 82 2,010 Singapore Press Holdings, eBay,Saban Capital Group, Brookside Capital, Oak Investment
10 iflix Entertainment Online video-on-demand service 75 2,014 Catcha Group, Emtek, Sky
11 iCarsClub Travel P2P car sharing 70 2,012 Sequoia Capital, IDG
12 Elevenia E-tailing Horizontal e-tailing 68 2,014 SK Planet, XL Axiata
13 Reebonz E-tailing Fashion e-tailing 64 2,009 GGV Capital, Intel Capital, MediaCorp Singapore, Matrix Capital, Infocomm Investments
14 RedMart E-tailing Online grocery 55 2,011 Garena, Softbank, Visionnaire Ventures, Eduardo Saverin
15 vinEcom E-tailing Horizontal e-tailing 50 2,014 Vingroup
Source: Jefferies, media reports
Exhibit 24: Indian internet/e-commerce cos have raised over US$10bn in the
last 3 years
Source: Jefferies, media reports
Amongst the global PE/VC firms, companies such as Softbank, Tiger, Sequoia, Temasek,
Kinnevik and Intel Capital have invested in the region in addition to Rocket. Grab and e-
tailing companies such as Lazada, Tokopedia, Zalora seem to be some of the favourites.
The most obvious exceptions to the list of investors in the internet/e-commerce space in
the region include Naspers, DST Global and KPCB.
Exhibit 25: Many global PE/VC firms are present in the region; Naspers, DST Global, KPCB amongst those that do not
have exposure to the region
S.No PE/VC investor Headquarters Key investments in ASEAN region Global investments in the sector
1 Rocket Internet Germany Lazada, Zalora, Foodpanda, Carmudi, ZenRooms Dafiti, Jabong, Lamoda, Foodpanda
2 Softbank Japan Grab, Tokopedia, Redmart Alibaba, Sina, Didi Kuaidi, Yahoo Japan, SoFi, Snapdeal, Ola
3 Sequoia Capital US Carousell, AdNear, IcarsClub Apple, Google, Youtube, Yahoo, Whatsapp
4 Tiger Global US Grab, Wego eLong, Flipkart, Zynga, Airbnb, Ola, Nextdoor
5 Tengelmann Ventures Germany Lazada, Zalora, Carmudi Lamudi, Delivery Hero, Lamoda, Linio
6 Kinnevik Sweden Lazada, Zalora Millicom, Zalando
7 Temasek Singapore Lazada Paypal, Alibaba, Airbnb, Didi Kuaidi
8 Intel Capital US Reebonz Snapdeal, WebRadar, iZettle, Skyport Systems
Source: Jefferies, media reports
Few listed players for now – expect more listings
going forward
Listed plays with exposure to internet/e-commerce
Very few direct plays in the listed There are few sizeable listed players in the internet/e-commerce space in the region
market, none above US$1bn market- currently. While we could find 10 such companies – Xurpas, iCarAsia, Migme, JobStreet,
cap; SingPost, Rocket Internet, Ensogo, Asiatravel, MOL group, Asiasoft Corporation, Netccentric and Rev Asia – only 3
Singapore Press Holdings are large are over US$100mn in market-cap. The total market-cap of all ten is only US$1.3bn. In
listed companies having some addition to these, one can play the sector indirectly through investment companies such
exposure to the space as Rocket Internet and logistics companies such as Singpost.
page 10 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
Exhibit 26: Listed companies in internet/e-commerce space in South East Asia
S.No Company B'berg Exchange Segment Description Mkt cap HQ Listing Countries
ticker (US$mn) Yr.
1 Xurpas X PM Philippines Gaming Gaming & Ent. 708 Philippines 2014 Singapore, Philippines, Indonesia
2 iCarAsia ICQ AU Australia Classified Automobile classified 169 Malaysia 2012 Malaysia, Thailand, Indonesia
3 Migme MIG AU Australia Social Provides chat, 163 Singapore 2001 Singapore, Malaysia, Indonesia, Taiwan, Hong Kong, Australia
Network microblogging etc.
4 JobStreet JOBS MK Malaysia Classified Recruitment classified 63 Malaysia 2005 Singapore, Malaysia, Philippines, Indonesia, Vietnam
5 Ensogo E88 AU Australia E-tailing Deals & discounts 49 Thailand 2013 Singapore, Malaysia, Philippines, Indonesia, Thailand, Hong Kong, US
6 Asiatravel AST SP Singapore Travel Online travel agent 48 Singapore 2001 Singapore, Malaysia, Indonesia, Thailand, Philippines, Hong Kong, China, UAE
7 MOL group MOLG US Payments Payment Gateway 45 Malaysia 2014 Singapore, Malaysia, Indonesia, Thailand, Philippines, India, Australia, NZ
US
8 Asiasoft Corp. AS TB Thailand Gaming Online Gaming 28 Thailand 2008 SEA (6),Cambodia, Burma
9 Netccentric NCL AU Australia Advertising Digital Media 28 Singapore 2015 Singapore, Malaysia, Australia, Philippines, Thailand, China, UK
advertisement
10 Rev Asia REV MK Malaysia News & Ent. Owns multiple news & 18 Malaysia 2011 SEA(6)
entertainment website
Source: Jefferies, Bloomberg
Exhibit 27: Listed companies with some exposure to internet/e-commerce space in South East Asia
S.No Company Ticker Exchange Mktcap Nature of exposure to ASEAN e-commerce
(US$bn)
1 Singapore Press Holding SPH SP Singapore 4.7 Acquired SgCarMart and owns many classified sites - ST Jobs, STProperty, STCars, STClassifieds etc. Stake in Qoo10
2 Rocket Internet RKET GR Germany 4.6 Investment in companies such as Lazada, Zalora, Foodpanda, Carmudi and Zen Rooms in South East Asia
3 Matahari Department Store LPPF IJ Indonesia 4.1 Invested US$500mn in own e-commerce venture
4 Singpost SPOST SP Singapore 2.5 Launched "SP ecommerce" as a full service end-to-end e-commerce logistic solution provider
5 Mapletree Logistics MLT SP Singapore 1.9 Owns warehouses across Asia including 3 countries of SEA (SG, MA, VI)
6 GD Express GDX MK Malaysia 0.6 Provides Logistic Services in Malaysia and Singapore. Plans to grow in e-commerce Logistics
7 Thegiodidong MWG VN Vietnam 0.5 Mobile retail chain operator with online channel
8 Pos Malaysia POSM MK Malaysia 0.4 Launched e-Commerce Hub ub Malaysia for providing logistic services to e-commerce companies
9 WHA Warehouse WHAPF TB Thailand 0.3 Owns various warehouse in ASEAN countries
Source: Jefferies, Bloomberg
Online spend, impact on Singapore
Singapore’s online spend is estimated to be around US$2.4bn (~8% of total retail spend).
Expect positive impact on data Proportion of online spending in SG still has room to grow considering developed
centre and logistics companies and markets like US, UK currently average around 15%. This strong growth in online spend
negative impact on retailers could impact different sectors of the Singapore economy either positively or negatively.
The table below is a quick summary of how rising online spend could affect diverse
sectors of the SG economy. From a broad sector perspective, E-commerce will have a
positive impact on demand for 1) data centres, 2) last mile logistics, warehousing
operations, and 4) telcos due to increased data traffic. On the other hand, we expect a
negative impact on retail operations both mass-market and as well specialised formats like
shopping malls etc.
Exhibit 28: Impact of rising online spend across sectors in Singapore
Company B’berg ticker Price (SGD) JEF Rating MCap (US$m) Impact Impact of E-commerce on industry/ sector
Data Center REITs Increased demand for data center space
Keppel DC REIT KDCREIT SP 1.09 NC 718 +ve
Retail Malls -ve Higher online share of retail spend could adversely affect demand for store-fronts
Mapletree Commercial Trust MCT SP 1.47 Hold 2,336
CapitaMall Trust CT SP 2.12 NC 5,603
Fraser Centerpoint Trust FCT SP 2.02 NC 1,370
Industrial/ Logistics Space +ve Demand for modern warehousing/logistics assets could rise
AREIT AREIT SP 2.50 Buy 4,973
Mapletree Logistics MLT SP 1.03 Buy 1,904
Aims AMP AAREIT SP 1.35 Hold 640
Logistics and distribution +ve Warehousing and last-mile delivery capability will become important
Singapore Post SPOST SP 1.65 NC 2,500
Mass-market retailing -ve Increased competition from online marts
Shen Siong SSG SP 0.87 NC 970
Telcos +ve More data-traffic, mobile wallets could get more popular
Singtel ST SP 3.95 Buy 47,000
Starhub STH SP 3.34 Underperform 4,311
M1 M1 SP 2.48 Hold 1,720
Source: Jefferies estimates, Bloomberg
page 11 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
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21 April 2016
Six few private market “unicorns”
Based on media reports, there are at There are quite a few large companies in the private market though. In fact based on
least six companies that have been media reports of valuations in private funding rounds there are already six “unicorns” or
valued at US$1bn or more in private companies valued above US$1bn in the region viz. Garena, Grab, Lazada, VNG group,
funding rounds – Garena, Lazada, Traveloka and Tokopedia. In addition we expect PropertyGuru, Iproperty and Zalora to be
Grab lead the way valued at over US$500mn. This would take the total private market valuation to over
US$10bn.
Exhibit 29: The “unicorns” - Six internet companies from the region are
estimated to have achieved valuation of over US$1bn in private rounds
Source: Jefferies, Media reports
We expect more listings in Singapore We expect more listings in the Singapore market over the next 2-3 years as existing
over the next 2-3 years investors look for exits or increasing funding requirements forces a shift to public markets.
Singapore and Indonesian markets stand out
Singapore being a developed Singapore – developed economy with many advantages. Singapore clearly stands
economy is a good test market for out amongst the ASEAN countries. It is a developed economy with very high spending
new ideas; companies also find other power (per capital GDP of US$56k), good internet connectivity and broadband
advantages of basing their HQ in infrastructure (fixed broadband penetration is over 73%, whilst smartphone penetration
Singapore, thanks to a strong start- at over 90%), mature payment infrastructure (the average Singaporean holds over 2.7
up eco-system credit cards vs. 2.2 for US) and relatively few logistical, regulatory and other challenges.
This makes it a good test/pilot market for ideas that can then be scaled up into the region.
Moreover, many companies prefer to base their headquarters out of Singapore due to
many advantages such as easier access to funding, availability of talent pool, lower tax
rates and active support from the Singapore government. (See Appendix 2 on
Singapore Start-up Eco system for more details)
Exhibit 30: Singapore headquartered companies dominate in fund flows into
the sector, followed by Indonesia
Source: Jefferies, Media reports
page 12 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
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21 April 2016
Exhibit 31: 10 of the 15 companies that have raised US$50mn are headquartered in Singapore, 3 in Indonesia
S.No Company Segment Headquarter Founded in Countries of operation
1 Lazada E-tailing Singapore Singapore Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam
2 Grab Travel Singapore Malaysia Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam
3 Matahari Mall E-tailing Indonesia Indonesia Indonesia
4 SingPost E-com logistics Singapore Singapore Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, HK, India, Australia
5 Zalora E-tailing Singapore Singapore Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, Hong Kong, Taiwan, Australia, New Zealand, Brunei
6 PropertyGuru Classified Singapore Singapore Singapore, Indonesia, Malaysia, Thailand
7 Garena Gaming Singapore Singapore Singapore, Malaysia, Philippines, Taiwan, Vietnam, Thailand, Indonesia
8 Tokopedia E-tailing Indonesia Indonesia Indonesia
9 Qoo10 E-tailing Singapore Singapore Singapore, Indonesia, Malaysia, China, Japan
10 iflix Entertainment Malaysia Malaysia Malaysia, Philippines, Thailand
11 iCarsClub Travel Singapore Singapore Singapore
12 Elevenia E-tailing Indonesia Indonesia Indonesia
13 Reebonz E-tailing Singapore Singapore Singapore, Malaysia, Indonesia, Taiwan, Hong Kong, Thailand, Australia and South Korea
14 RedMart E-tailing Singapore Singapore Singapore
15 vinEcom E-tailing Vietnam Vietnam Vietnam
Source: Jefferies, company data
Indonesia – potentially the largest market. While Indonesia lags countries like
Indonesia is potentially the largest
Malaysia and Thailand in spending power and ease of doing business, we believe it still
e-commerce market in the region
stands out in the region as potentially its largest market. Its population of 260mn ranks it
with estimated 150mn internet users
4th globally after China, India and US. As a result, despite relatively low internet
by 2020
penetration of 34%, it already accounts for nearly 90mn of the 250mn internet users in
the region. As internet penetration rises to over 60% over the next 4-5 years, Indonesia
alone could account for close to 150mn internet users. The fact that companies
headquartered in Indonesia have seen the most PE/VC fund flow in the region after
Singapore, also points towards its significance in the region.
Exhibit 32: Singapore ranks #1 in the ease of doing business globally;
Malaysia is #18 and Thailand is #49; others rank close to 100
Source: Jefferies, World Bank
Malaysia, Thailand - easier markets to scale up after Singapore. Malaysia and
Thailand rank after Singapore on many key metrics like GDP per capita, urbanization,
internet penetration and active e-commerce and social media users. Ease of doing
business and infrastructure are also better here than in the rest of the region. As a result, in
our conversations with various e-commerce players these ranked after Singapore as the
easier markets to scale up in the region.
Philippines, Vietnam – many operational challenges. Philippines and Vietnam,
each with a population of close to 100mn, rank after Indonesia in terms of long-term
opportunity size. However spending power is relatively low and operational challenges
relatively high due to logistics and infrastructure issues including poor mobile
connectivity/data speeds. Philippines with a large base of social media users and
popularity of English is clearly the more attractive market of the two.
Myanmar, Laos, Cambodia, Brunei – frontier markets. In addition to the six
markets discussed above, the ASEAN region includes smaller markets such as Cambodia,
Laos and Brunei with a combined population of 22mn. Myanmar with a population of
55mn is relatively larger but is still extremely under-developed after many years of
economic exclusion that has only just ended. As a result, we have excluded these markets
from the scope of this report.
page 13 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
Internet
21 April 2016
E-tailing the big opportunity; Travel,
classified, gaming other key segments
E-tailing is the largest opportunity for With Search and Social network segments being cornered by global players like Google,
local players and could be a US$30- Facebook, Whatsapp and WeChat, e-tailing is by far the biggest opportunity for local
40bn market by 2020; Travel, players in the sector. It has also accounted for close to 70% of the fund flow into the
gaming, classified and gaming the sector. We estimate that the regional e-tailing market which is currently likely to be close
other segments with local players to US$10bn will grow to US$30-40bn by 2020. There are a large number of local players
with Lazada, Tokopedia, Bukalapak, Qoo10 and Lelong being some of the largest.
Amongst horizontal players, marketplace is the dominant model while many of the
vertical players do inventory based selling. Cash on delivery and manual banking are
dominant payment methods across most of the region. Logistics companies like SingPost
are also likely to be significant beneficiaries of the e-tailing boom. Travel, classified and
gaming are other key segments with notable local companies such as Grab, Traveloka,
PropertyGuru, JobStreet, Garena and VNG. Indonesia and Vietnam appear to be best
suited for the emergence of local players.
Search, Social network, messaging dominated by
the global players
Search and Social network is Globally, the largest internet companies by market-cap are predominantly those
dominated by global players like operating in Search, Social network or e-tailing as shown in the chart below. In South East
Google, Facebook, Whatsapp, Asia, the search and social network segments are dominated by global players like
WeChat Google, Facebook, Yahoo, Msn and Bing. Even messaging apps are all primarily owned by
global players such as Whatsapp, Facebook messenger (both owned by Facebook),
WeChat (owned by Tencent group of China), Line, Blackberry Messenger and Viber
(owned by Naver Corp of South Korea, Blackberry Limited of Canada and Rakuten of
Japan respectively).
Exhibit 33: The top internet cos by market-cap globally are mostly in Search,
Social network and e-tailing
Source: Jefferies, Bloomberg
Exhibit 34: Google, Youtube, Facebook, Yahoo, Msn, Bing feature amongst top 10 sites in most of the SE Asian countries
Rank Singapore Segment Indonesia Segment Malaysia Segment Thailand Segment Philippines Segment Vietnam Segment
1 Google Search Google Search Google Search Google Search Facebook Social network Coc coc Search
2 Youtube Entertainment Facebook Social Network Youtube Entertainment Youtube Entertainment Youtube Entertainment Google Search
3 Facebook Social network Youtube Entertainment Facebook Social network Facebook Social network Google Search Facebook Social Network
4 Yahoo Search Detik News Yahoo Search Pantip Social network Yahoo Search Youtube Entertainment
5 Wikipedia Information Yahoo Search Blogspot Entertainment Blogspot Entertainment abs-cbn News webtretho Entertainment
6 Amazon.com E-tailing Tribunews News Msn Search Yahoo Search Inquirer News Zing News
7 Bing Search Liputan6 News Maybank Finance Bing Search GMA N/w News daikynguyen News
8 Linkedin Social network Kaskus Social network Wikipedia Information Amazon.com E-tailing Msn Search vnexpress News
9 Msn Search Kapanlagi Entertainment Lazada E-tailing Msn Search Wikipedia Information nhadatso Classified
10 qoo10.sg E-tailing Kompas News Bing Search Ebay E-tailing Twitter Social network 24h News
Source: Jefferies, Alexa
page 14 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
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21 April 2016
Exhibit 35: Top messaging/chat apps across the South East Asian countries
Rank Singapore Indonesia Malaysia Thailand Philippines Vietnam
1 Whatsapp Blackberry messenger Whatsapp Line Facebook messenger Zalo
2 Facebook messenger Whatsapp Facebook messenger Facebook messenger Viber Facebook messenger
3 WeChat Facebook messenger/Line WeChat Whatsapp/Wechat Line Viber
Source: Jefferies, Media reports
Exhibit 36: Most top messaging/chat apps owned by global corporates; VNG’s
Zalo is the only local player
S.No Messaging app Owning group Country of origin
1 Whatsapp Facebook US
2 Facebook messenger Facebook US
3 WeChat Tencent Group China
4 Line Naver Corp South Korea
5 Blackberry messenger Blackberry Limited Canada
6 Viber Rakuten Japan
7 Zalo VNG Vietnam
Source: Jefferies, company data
Coc coc, Zalo, Kaskus, Pantip are There are a few local players though – Coc coc is a browser cum search engine that
some of the local players in this specializes in search in Vietnamese – the company raised US$14mn of funding in
space February, 2015 and often ranks above Google as the #1 site in Vietnam. Zalo, a messaging
service launched by the VNG group in 2012 ranks as the top messaging app in Vietnam.
The VNG group also launched a social network site Zine Me in 2009. Pantip of Thailand
and Kaskus of Indonesia are discussion forums that have attracted a large local
community.
Exhibit 37: Key local companies in search, social network and messaging
S.No Company Founded in HQ Countries of Description Investors Funds raised Founders/CEO
operation (US$mn)
1 Coc coc 2010 Vietnam Vietnam Search Engine customized for Vietnamese Hubert Burda Media 14 Nguyen Binh, Le Thanh
2 Zing Me & Zalo (VNG group) 2004 Vietnam Vietnam Gaming, social n/w, messaging CyberAgent Ventures n/a Hong Minh le & Bryan Pelz
3 Pantip 1997 Thailand Thailand Discussion forum n/a n/a Wanchat Padungrat
4 Kaskus 1999 Indonesia Indonesia Discussion forum and classified GDP Ventures n/a Andrew Darwis
Source: Jefferies, company data
E-tailing the big opportunity – potentially a US$30-
40bn market by 2020
E-tailing – potentially a US$30-40bn market by 2020
We estimate that e-tailing will be a E-tailing is by far the largest opportunity for local companies in our view. Based on the
US$30-40bn market in the region by retail market of the respective countries, we estimate that e-tailing could be a US$30-40bn
2020 vs. US$10bn currently market (in GMV terms) in the six major South East Asian countries by 2020. This would
imply ~3.5-4.5% of the total retail sales being transacted online, which is in line with other
emerging markets and significantly lower than what has been the case in China. The large
opportunity in e-tailing is also reflected in the fund flow pattern - e-tailing (including e-
commerce logistics) companies have absorbed close to 70% of investments into
internet/e-commerce sector in the region.
Exhibit 38: We estimate the e-tailing market in the region to grow to US$30-40bn by 2020 from US$10bn currently
2,015 2,020 Scenario 1 (Base case) Scenario 2 (Bear case) Scenario 3 (Bull case)
Country Retail market E-tailing market % of retail Retail market E-tailing market % of retail Cagr E-tailing market % of retail E-tailing market % of retail
size (US$bn) (US$bn) market size (US$bn) (US$bn) market (%) (US$bn) market (US$bn) market
Indonesia 320 3.0 0.9 428 12.8 3.0 34 10.7 2.5 15.0 3.5
Singapore 30 2.4 8.0 33 6.6 20.0 23 6.0 18.0 7.3 22.0
Malaysia 70 1.4 2.0 89 4.5 5.0 26 4.0 4.5 5.4 6.0
Thailand 100 1.5 1.5 116 4.6 4.0 25 4.1 3.5 5.8 5.0
Philippines 80 0.6 0.8 107 3.2 3.0 38 2.7 2.5 3.7 3.5
Vietnam 70 0.6 0.8 94 2.8 3.0 38 2.3 2.5 3.3 3.5
Total 670 9.5 1.4 867 34.6 4.0 29 29.8 3.4 40.5 4.7
Total ex SG 640 7.1 1.1 834 28.0 3.4 32 23.8 2.9 33.2 4.0
Source: Jefferies estimates
page 15 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
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21 April 2016
Exhibit 39: E-tailing (including logistics) has accounted for over US$3bn of
E-tailing companies have attracted the US$4.5bn funds flowing into internet/e-commerce sector since 2011
nearly 70% of the private market
funding into the sector
Source: Jefferies, Media reports
Lazada, Tokopedia, Bukalapak, Local companies like Lazada, Tokopedia, Bukalapak and Qoo10 (see table below) have
Qoo10 some of the top local taken the early leadership in the e-tailing market in the region. The near absence of
companies Amazon from the region has been a significant positive from a competitive landscape
point of view. Ebay and Alibaba (through Taobao and Aliexpress) are the key global
players in the region. However Alibaba’s recent investment of US$1bn into Lazada for a
controlling stake in the company seems to suggest that Lazada will be key to the former’s
growth plans in the region going forward.
Exhibit 40: Top e-tailing sites by traffic in the different countries
Rank Singapore Indonesia Malaysia Thailand Philippines Vietnam
1 Qoo10 Bukalapak Lazada Ebay Lazada Lazada
2 Taobao Tokopedia Lelong Lazada Metrodeal Thegiodidong
3 Ebay Lazada Taobao Aliexpress Ebay Sendo
4 Lazada Elevenia 11street weloveshopping Zalora Tiki
5 Zalora Blibli Qoo10 Tarad Ensogo Cdiscount
Source: Jefferies, Alexa
As expected most of the top e-tailing players are horizontal players selling across multiple
categories with mobile & electronics and fashion & accessories being the top two
categories. Amongst the vertical e-tailers, fashion & accessories is by the far the most
popular category with many players like Zalora, Reebonz and FashionValet; electronics,
home furnishing and grocery are some of the other verticals.
Exhibit 41: Horizontal players in Asean e-tailing
S.No Site/Company HQ Countries operating in Founded in Investment Investors Founder/CEO
(US$mn)
1 Qoo10/Giosis Singapore Singapore, Indonesia, Malaysia, 2,010 82 Singapore Press Holdings, Ebay, Brookside Capital, Oak IP Ku Young Bae
China, HK, Japan
2 Lazada Singapore SEA (6) 2,012 680 Rocket, Temasek, Tesco, Tengelmann, Summit Partners Maximilian Bittner
3 Bukalapak Indonesia Indonesia 2,011 n/a Emtek, Queensbridge VP Nugroho Herucahyono, Achmad Zaky
4 Tokopedia Indonesia Indonesia 2,009 248 Softbank William Tanuwijaya, Leontinus Alpha
Edison
5 Elevenia Indonesia Indonesia 2,013 68 XL Axiata, SK planet James Lee
6 Blibli Indonesia Indonesia 2,010 n/a Djarum Group, Bank Central Asia Kusumo Martanto
7 Lelong Malaysia Malaysia 1,998 n/a MIH Kwok Wei, Richard Tan
8 11street Malaysia Malaysia 2,015 n/a Celcom Axiata, SK Planet Hoseok Kim
9 Ensogo Thailand Singapore, Indonesia, Malaysia, 2,009 42 Vipshop, Ward Ferry Paul Srivorakul, John Srivorakul, Tom
Thailand, Philippines, HK, US Srivorakul
10 Tarad Thailand Thailand 1,999 n/a Rakuten Pawoot Pongvitayapanu
11 Metrodeal Philippines Philippines 2,011 n/a Transcosmos Ralph Wunsch
12 Vatgia Vietnam Vietnam 2,006 n/a CyberAgent Ventures Nguyen Ngoc Diep
13 Sendo Vietnam Vietnam n/a n/a FPT Corp Tran Hai Linh
14 Tiki Vietnam Vietnam 2,010 1 CyberAgent Ventures, Sumitomo Corp Trần Ngọc Thái Sơn
Source: Jefferies, company data
page 16 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
Please see important disclosure information on pages 46 - 49 of this report.Technology
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21 April 2016
Exhibit 42: Vertical players in Asean e-tailing
S.No Site/Company HQ Countries operating in Founded in Segment Investment Investors Founder/CEO
(US$mn)
1 Zalora Singapore SEA (6), HK, Taiwan, 2012 Fashion & accessories 212 Rocket Internet, Access Industries, Tengelmann, Michael Ferrario, Harry Markl
Australia, New Zealand Summit Partners, Kinnevik
2 Reebonz Singapore SG, MA,TH, ID, Asia 2009 Fashion & accessories 64 GGV Capital, Intel Capital, Matrix, MediaCorp Samuel Lim, Daniel Lim,
Pacific Benjamin Han
3 FashionValet Malaysia Malaysia 2010 Fashion & accessories 6 Elixir Capital, Start Today Vivy Yusof, Fadzarudin Anuar
4 Thegiodidong Vietnam Vietnam 2004 Mobile, electronics n/a Robert Alan Willett, CDH Electric Bee Limited, Nguyen Duc Tai
Mekong Capital
5 Hermo Malaysia MA 2012 Beauty products 2 Gobi Partners Ian Chua
6 HipVan Singapore SG,PH,VI 2013 Home furnishing 5 Golden Gate Ventures, East Ventures, LionRock Danny Tan
Capital, Toivo Annus
7 Redmart Singapore Singapore 2011 Grocery 55 Garena, Softbank Ventures Korea, Visionnaire Roger Egan, Vikram Rupani,
Ventures, Eduardo Saverin Rajesh Lingappa
Source: Jefferies, company data
Marketplace the dominant model in the region, especially amongst
horizontal players
Market place is the dominant model Market place rather than inventory based selling is by far the dominant model in the
amongst the horizontal players; region with most of the key players running either pure market places (qoo10, Tokopedia,
Inventory is more popular amongst Bukalapak, Elevenia, Lelong) or a mix of inventory and market place (Lazada, Zalora).
vertical players Lazada for instance started off as an inventory based e-tailer but has transitioned to a
hybrid model in 2014 – currently marketplace accounts for 75-80% of its total GMV. In
fact the Inventory model seems more popular amongst vertical players
(thegiodidong.com, Hipvan, FashionValet, Redmart).
Exhibit 43: Most horizontal players follow the marketplace model, vertical
players often follow inventory model
E-tailer Marketplace Inventory Hybrid
Horizontal players
Qoo10 √√√ X X
Lazada X X √√√
Bukalapak √√√ X X
Tokopedia √√√ X X
Elevenia √√√ X X
Blibli √√√ X X
Lelong √√√ X X
11street √√√ X X
Ensogo √√√ X X
Tarad √√√ X X
Metrodeal √√√ X X
Vatgia √√√ X X
Sendo √√√ X X
Tiki X √√√ X
Vertical players
Zalora X X √√√
Reebonz X X √√√
FashionValet X √√√ X
thegiodidong X √√√ X
HipVan X √√√ X
Redmart X √√√ X
Source: Jefferies, company data
Cash on delivery and manual banking, the dominant payment methods
Cash on delivery/manual banking Cash on delivery and manual banking are dominant payment methods for e-tailing across
are the dominant payment modes the region. E-payment is the #1 payment method only in relatively developed economies
outside of Singapore and Malaysia like Singapore and Malaysia but even in Singapore, cash on delivery ranks #2. We believe
this is likely to remain unchanged for some time given the nascent stage of the e-tailing
market in the region and relatively low credit/debit card penetration outside of Singapore
and Malaysia.
Exhibit 44: Cash on delivery or manual banking are dominant payment
methods in many of the countries
Singapore Indonesia Malaysia Thailand Philippines Vietnam
Top 2 payment e-Payment Manual Banking e-Payment Cash on Delivery Cash on Delivery Cash on Delivery
modes on Lazada CoD e-Payment Online Banking e-Payment e-Payment e-Payment
Source: Jefferies, Lazada
page 17 of 49 Arya Sen, Equity Analyst, +91 22 4224 6122, asen@jefferies.com
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