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E-COMMERCE IN SOUTHEAST ASIA Webinar starting soon...
E-COMMERCE IN SOUTHEAST ASIA Webinar 05.05.2020
Agenda
Introduction Internet Economy & E-Commerce Market SEA
● Christopher Benz (CEO & Founder of Kemana.com)
● Hans-Peter Ressel (CEO & Founder of Momentum Commerce)
○ Market Overview
○ Internet Economy
○ E-Commerce Market
● Overview E-Commerce Market by Country
o Indonesia (Christopher Benz)
o Malaysia (Hans-Peter Ressel)
○ Thailand (Georg Krenn - AC Bangkok)
o Vietnam (Dietmar Schwank - AC Ho-Chi-Minh-City)
● Conclusions & Recommendations
o Christopher Benz
o Hans-Peter Ressel
o Sigmund Nemeti (AC Jakarta)
3
Introduction Internet Economy & E-Commerce Market South Asia
Big, diverse and fast growing market in SEA Young demographics in SEA
● 570m people across 6 biggest markets in SEA (excl. ● 26% of population is younger than 15 years
Cambodia, Laos, Myanmar) ● 150m SEA people will turn 15 over the next 15 years
● SEA houses some of the fastest growing markets in ● 10m people join the “mobile age” every year and
the world with an average of 5% GDP growth in the grow up as a digital citizen
last 5 years (2% higher than rest of global economy)
● By 2030, SEA is expected to become the world’s
fourth largest economic bloc
● Very diverse region with 10 official languages and
hundreds of local dialects
Source: Google/Temasek Report E-
Commerce SEA 2019 Source: Google/Temasek Report E-
Commerce SEA 2019
4
Introduction Internet Economy & E-Commerce Market South Asia
Fast growing Internet economy Most engaged mobile Internet region worldwide
● Since 2015, SEA Internet users increased from 260m ● 10 years ago, 80% of SEA population didn’t have
to 360m (10m in ‘19), esp. in the age group of 15-19 internet access
● Of those 360m, only 180m have started to use ● Today, TH (5:13h), ID, PH and MY are in the top 10
services of the Internet economy countries by mobile internet usage (global avg.
3:13h)
○ Social & Comms are the most engaged apps
(52% vs. 65% in ‘16)
○ Video apps / live streaming has doubled in last 3
years (20% vs. 10% in ‘16)
Source: Google/Temasek Report E- Source: Google/Temasek Report E-
5
Commerce SEA 2019 Commerce SEA 2019
Introduction Internet Economy & E-Commerce Market South Asia
SEA Internet economy breakdown SEA e-Commerce market
● e-Commerce already accounts for 38% of the SEA ● ID is the largest e-Commerce market in SEA, growing
Internet economy and has overtaken Online Travel; 12x in the last 4 years, driven by competition
further increase to 51% by 2025 between local and regional players
● Active e-Commerce users have increased from 49m ● Growth of e-Commerce is powered by fundamental
to 150m in 2019 changes in consumer behavior and massive
investments of platforms in online shopping festivals,
in-app entertainment, seller development and
logistics infrastructure
Source: Google/Temasek Report E- Source: Google/Temasek Report E-
6
Commerce SEA 2019 Commerce SEA 2019
Agenda
● Introduction Internet Economy & E-Commerce Market SEA
● Christopher Benz (CEO & Founder of Kemana.com)
● Hans-Peter Ressel (CEO & Founder of Momentum Commerce)
○ Market Overview
○ Internet Economy
○ E-Commerce Market
Overview E-Commerce Market by Country
o Indonesia (Christopher Benz)
o Malaysia (Hans-Peter Ressel)
○ Thailand (Georg Krenn - AC Bangkok)
o Vietnam (Dietmar Schwank - AC Ho-Chi-Minh-City)
● Conclusions & Recommendations
o Christopher Benz
o Hans-Peter Ressel
o Sigmund Nemeti (AC Jakarta)
7
E-COMMERCE IN INDONESIA Christopher Benz CEO & Founder of Kemana.com
E-Commerce in Indonesia
Indonesia - Overview Doing Business in Indonesia
● Indonesia has population of 272m people and half the ● Restrictive entry barriers for foreign companies
population is under 30 years old. specifically in retail, oil and gas, medical pharma.
● $40bn USD internet economy in 2019. It is expected ● 2 types of companies - Local & Foreign Owned.
to reach $130bn USD by 2025. Different rules for each.
● Ecommerce market size specifically was $21bn USD ● 25% corporate tax rate
in 2019 and is expected to hit $82bn USD by the year ● 0.1% capital gains tax
2025. ● EUR 1015 avg. monthly salary, EUR 200-300 for fresh
● Highest Ecommerce percentage growth Globally in graduates; limited talent pool with little exposure to
2019, at a 78% increase. international education and standards.
Massive Investment Climate
● GoJek has raised $4.5 Billion USD
● Tokopedia has raised $2.4 Billion USD
● BliBli owned and funded by Djarum
● Payment is the underlying strategy
● Ewallets play a critical role in Ecommerce
9
E-Commerce in Indonesia
Market Environment
● Local E-Commerce is very fragmented, yet with only
a handful of dominant players
● Fashion, Home & Living & FMCG biggest categories in
terms of volumes; Electronics in terms of revenues
● Internet penetration of 64%, with 90% having some E-
commerce shopping experience
● Only 48% of population have bank accounts; 2.4%
Credit Card penetration rate
Niche Market Segments Current Developments during Covid-19
● While there are strict regulations on foreign ● Most retail is closed through to June 1st.
ownership within certain industries many Niche ● Mudik cancelled by decree across the country.
market opportunities still remain largely open. ● Limited restrictions so far, with limited enforcement
● While investment has focused heavily in by army and policy.
marketplaces and fintech, few players have been ● Limited testing currently, resulting in very low
able to crack more specialized offerings. infection numbers.
● B2B for the most part is still completely open for ● E-Commerce volumes are expected to increase %120+
niche offerings and far from saturated compared to for both April + May 2020 compared to January 2020
B2C. with strong demand surge for food delivery, sports,
personal care / FMCG, electronics.
10E-COMMERCE IN MALAYSIA Hans-Peter Ressel CEO & Founder of Momentum Commerce
E-Commerce in Malaysia
Malaysia - Overview Doing Business in Malaysia
● Malaysia has a very diverse population of 32m people ● Low market entry barriers for foreign companies and
and a 11bn USD internet economy (>2x vs. 2015) investors in most industry sectors
which is expected to hit 26bn USD by 2025 ● Min. paid up capital RM 1; much higher for certain
● B2C E-Commerce market size was 3bn USD in 2019 industries and if work permits have to be given out
(3x vs. 2015) and is expected to hit 11bn USD by the ● 24% corporate tax rate
year 2025 ● 0% capital gains tax
● Metropolitan areas in Klang Valley, Penang and Johor ● EUR 900 avg. monthly salary, EUR 550 for fresh
Bahru account for >65% of the E-commerce volumes, graduates; strong talent pool with high share of
East Malaysia still under-indexed international education
Regional Hub: KLIA Aeropolis, total of 8,548 acres
● In 2017, Alibaba Group set up their first DFTZ (Digital
Free Trade Zone) outside of China in Malaysia at KLIA
Aeropolis (eCom park, logistics park, etc.)
● Port Klang amongst the top 15 global container ports
● Almost 1m annual cargo tonnes and 50% increase
expected in the next 10 years
● 20 out of top 25 freight forwarders with a base in MY
● Big cross-border market with ca. 50% of the E-
Commerce volumes being sourced from China
12E-Commerce in Malaysia
Market Environment
● Local E-Commerce is very fragmented, yet with only
a handful of dominant players
● Fashion, Home & Living & FMCG biggest categories in
terms of volumes; Electronics in terms of revenues
● Internet penetration of 81%, thereof 80% with E-
commerce shopping experience
● Only 3m unbanked people; still 9m underbanked
Cross-border Logistics Current Developments during Covid-19
● In general different duties & taxes based on HS code ● Very strict MCO in four different waves so far, with
● De minimis rate (price threshold below which no limited mobility (E-COMMERCE IN THAILAND Georg Krenn AC Bangkok
E-Commerce in Thailand
MARKET OVERVIEW THAILAND
Thailand - Status Quo: Constraints:
• Thailand 4.0 scheme drives digital economy/e-commerce • E-Commerce platforms are still not very B2B sales focused,
• Tech-Savvy young generation, majority of Thais is Gen Y marketplaces are mostly B2B2C (Alibaba dominating)
• 85 % of population active internet users • Average order value comparatively low
• 75 % of population active social media users • IP infringements hard to prevent and pursue
• M-Commerce dominates in Thailand: 70 % browse with • Cross-border sales not feasible directly from Austria
their smart phones • Legal requirements for setup challenging
• Thais are still resistant towards digital payment, • Import of specific goods restricted or prohibited; import
Cash/Collection on Delivery (COD) still dominating (>50 %) license required for most FMCG goods, medicine,
cosmetics, food supplements, cigarettes and alcohol
Thailand‘s E-Commerce in detail: Current developments with regard to COVID-19:
• Total value of E-Commerce 2019: approx. 16 billion USD; • COVID-19 pandemic makes e-commerce mainstream,
thereof 55 % B2B, 27 % B2C, 18 % B2G 100 % rise in Lazada sales (mid-March to mid-April ‘20)
• Thailand’s B2C sales leading in value in SE-Asia (2019) • Decline in sales of high value products (IT gadgets,
• Foreign investors (mainly Alibaba) investing heavily in smartphone), shift to every day products (clothing, food
infrastructure (distribution centers) supplements, FMCG)
• Leading product categories sold online (2018): • Lazada added 26,000 new merchants in March 2020,
Mobile & Electronics (25 %), Fashion (15 %), Beauty (12 %); bringing the total number to 200,000 sellers
Lifestyle & Hobby (11 %), Health & Wellness (8 %) • Online Payments finally rising in numbers
• New focus on offline-to-online programs (O2O)
15E-Commerce in Thailand
DOMINATING E-SALES CHANNELS IN THAILAND
• E-Marketplaces: Lazada (#1), Shopee (#2), JD.Central (#3)
• Brand Webstores: E.g. Samsung, Microsoft, Apple, Kiehl’s
NEW: E-Marketplaces offer special platforms for leading
brands: LazMall, ShopeeMall and JD Mall
• E-Retailer: E.g. Advice, Power Buy, Central Department
Store, Watsons, JIB, Makro Click, HomePro
• Social Commerce: Facebook, YouTube, Line, Instagram
• Cross-border E-Commerce is possible
• Chinese sellers/products dominate cross-border sales
• Alibaba sets up its distribution center in the free-trade
zone of the Eastern Economic Corridor; products will be
kept without paying import tax
• Average order value:
- 738 baht for local products
- 350 baht for cross-border products
Source: Bangkok Post, E-commerce
set to build on successes, 27.01.2020 16E-Commerce in Thailand
LEGAL POSSIBILITIES TO SELL PRODUCTS ONLINE
Cross border e-Commerce: Opening a local online shop (Brand Webstores):
• Express consignment goods with a value below • Set up of a corporate/local subsidiary
1,500 Baht: import duty & tax exemption • Register with the Department of Business Development
• Goods exceeding 1,500 Baht: Customs declarations • Obtain an e-license
necessary (income duty & tax to be paid) • Register with the OCPB (Consumer Protection)
• New e-commerce law currently under consideration; Law • Obtain a Foreign Business License
will be aimed at taxing e-business operators which are • Legal compliance with Electronic Transactions Act
based outside of Thailand (sales tax) • New Personal Data Protection Act from 28 May 2020
• Generally possible for Brand Webstores & Social Media • Handling of customs clearance
channels, for E-Marketplaces: Negotiations are required
Working with an E-commerce enabler: Getting listed with an E-Retailer:
• E-Commerce enablers can act as a one-stop solution • E-Retailers sell a variety of brand products from their own
• Enablers may take over only specific services, e.g. import store (focusing on specific sectors)
clearance, warehousing, order fulfillment, etc. • Requirement to get listed with the E-Retailer first
• Leading enablers in Thailand: e.g. Ascend Group, • Local partner/subsidiary for import clearance is required
aCommerce, Silken Asia, Seven Digital, DEALCHA • Leading industry companies have their own e-retail shops
• Possible for E-Marketplaces, Brand Webstores, Social Media • Warehousing, order fulfillment, advertising, etc. will
channels and E-Retailers normally be handled directly by the e-Retailer
• Growth Potential: Mobile & Gadget, Fashion, Health
17E-COMMERCE IN VIETNAM Dietmar Schwank AC Ho-Chi-Minh-City
E-Commerce in Vietnam
Vietnam - Overview Doing Business in Vietnam
● 96 mio. inhabitants, GDP growth 3-4 % ● Favourable FTA framework and legislation
● Large, young and technology-oriented pop. ● Investor-friendly environment
● e-commerce volume to rise from 5 bn USD in ● Uncertainty in NTBs and economic policy
2019 to 23 bn USD in 2025 ● Set-up of WFOE and sales companies possible
● CAGR 35 %, low penetrance (1% of FCMG) ● 20% corporate tax rate
● Booming convenience solutions, esp. for food, ● Double-taxation agreement in force
fashion, electronics, furniture, toys, etc. ● Relatively low wages (minimum salary around
● Popularity of foreign e-commerce websites USD 200)
● Rising B2B e-commerce (Alibaba dominant) ● Limited talent pool outside the major cities
Constraints Legal framework
● Low trust of consumers in local platforms due to ● Poor legal guidelines for B2C cross border e-
commerce, new decree being drafted
poor product quality, discrepancy between what
● Challenges in tax administration, esp. with
is advertised vs. delivered Foreign Contractor’s Withholding Tax
● Popularity of COD and avid saving mentality ● Difficulty of capital transfer abroad
● Risk of infringement of IP rights ● New cybersecurity law leads to weak data
● Inadequate technology infrastructure protection
● High shipping costs and traffic congestion
● Customers in rural areas are difficult to reach
19E-Commerce in Vietnam
Market Environment
● E-Marketplaces
Shopee #1, followed by 3 local platforms
● Social Commerce
Facebook, Zalo, Instagram, Tiktok
● Fast delivery services
GrabFood, GoViet, Now.vn
● e-wallets
Momo, ZaloPay,…
Trends Current Developments during Covid-19
● Heated competition (local vs. foreign ● Vietnam performed well in the crisis and will not
players) hit recession in 2020
● Massive foreign investment in the sector ● Shopping centres and retail reopened again, but
● Infrastructure investment and fierce traffic there remains little so far
competition in logistics and delivery services ● Demand surge for food delivery, sports, personal
● Focus on platform profitability, not growth care / FMCG, electronics during the next months
● Digital payments on the rise ● Digital transformation accelerates in the medium
run
20Agenda
● Introduction Internet Economy & E-Commerce Market SEA
● Christopher Benz (CEO & Founder of Kemana.com)
● Hans-Peter Ressel (CEO & Founder of Momentum Commerce)
○ Market Overview
○ Internet Economy
○ E-Commerce Market
● Overview E-Commerce Market by Country
o Indonesia (Christopher Benz)
o Malaysia (Hans-Peter Ressel)
○ Thailand (Georg Krenn - AC Bangkok)
o Vietnam (Dietmar Schwank - AC Ho-Chi-Minh-City)
Conclusions & Recommendations
o Christopher Benz
o Hans-Peter Ressel
o Sigmund Nemeti (AC Jakarta)
21Conclusions
Ecosystem challenges are being resolved
● Consumer Trust Source: Google/Temasek Report E-
Commerce SEA 2019
○ Significantly improved consumer trust for e-Commerce, Ride
Hailing, Media, Travel; still nascent for Education, Healthcare
○ Internet economy companies have become “household brands”
● Internet Access
○ Efforts by tech and telco companies have made fast Internet
access more reliable and affordable
○ Music, Video, Social apps bundled in zero-rated plans; optimized
apps for low data usage and patchy connectivity
● Logistics
○ Leading Logistics providers can deliver nationwide and partner up with e-Commerce / Ride Hailing players
○ e-Commerce players started to provide next-day and same-day deliveries
● Digital Payments
○ Growing user and merchant adoption both online and offline
○ Loyalty and rewards programs emerge as key drivers of usage
● Talent
○ Still a challenge despite efforts to “fill the gap” (digital upskilling, exp. managers from other industries)
22Conclusions
Funding in SEA Internet economy
● Funding environment remains healthy (pre Covid-19) despite global headwinds
with a total of 37bn USD raised since 2015 Source: Google/Temasek Report E-
○ e-Commerce and Ride Hailing have raised 2 out of 3 dollars Commerce SEA 2019
○ 24bn USD were invested in 11 Unicorns (valuation > 1bn USD)
○ 5bn USD were invested in 70 “Aspiring Unicorns” (valuation 100m - 1bn USD)
○ 7bn USD were invested in 3,000 Startups (valuation 0.8m;
Series A: 2m->4m; Series B: 8m->16m)
● VCs are raising larger growth funds and shift their focus to SEA, PE funds are investing in earlier series
Source: Google/Temasek Report E-
Commerce SEA 2019
23Conclusions
SEA Internet Economy Metro vs. Rural
Source: Google/Temasek Report E-Commerce SEA 2019
Source: Google/Temasek Report E- Source: Google/Temasek Report E-
Commerce SEA 2019 Commerce SEA 2019 24Recommendations for the region
● booming internet economy in SEA (significant contribution of E-Commerce)
● high economic growth, big market ( > 650 million consumers)
● great potential for European products
● big and fast-growing middle-class (young, tech-savy, open-minded towards digitalization)
● small number of European investors; a lot of capital from private and institutional investors involved, international funds starting to join
● high necessity of E-Commerce development (further potential in rural areas)
● local partner needed (importer, E-Commerce enabler, local/regional warehousing, distribution partner); sustainable business relationship
● build presence, SEA very dynamic and promising
● patience with the legal framework required
● new: Digitalisierungsscheck
25E-Commerce in Southeast Asia
Q & A session
Any questions?
Please write your questions in the question box.
If we do not manage to answer your question, we will directly
contact you after the webinar!
26LET‘S STAY IN TOUCH
Vienna Headquarters: Christopher Benz | CEO & Founder Kemana.com
Matthias Grabner | AUSSENWIRTSCHAFT Technology E cbenz@kemana.com
T +43 5 90 900 3624
E aussenwirtschaft.technology@wko.at Hans-Peter Ressel | CEO & Founder Momentum Commerce
W www.wko.at/aussenwirtschaft/technology E hp@momentum-commerce.com
Indonesia: Malaysia:
Sigmund Nemeti | AußenwirtschaftsCenter Jakarta Reinhart Zimmermann | AußenwirtschaftsCenter Kuala Lumpur
T +62 21 2550 0186 | E jakarta@wko.at T +60 3 20 32 28 30 | E kualalumpur@wko.at
W www.wko.at/aussenwirtschaft/id W www.wko.at/aussenwirtschaft/my
Thailand: Vietnam:
Günther Sucher | AußenwirtschaftsCenter Bangkok Dietmar Schwank | AußenwirtschaftsCenter Ho Chi Minh City
T +66 2 0385 885 | E bangkok@wko.at T +84 28 7109 9781 | E hochiminhcity@wko.at
W www.wko.at/aussenwirtschaft/th W www.wko.at/aussenwirtschaft/vn
27Webinar E-COMMERCE IN SOUTHEAST ASIA THANK YOU FOR YOUR ATTENTION!
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