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The	Big	Opportunity:	Proven	Strategies	for	
Entering	Emerging	Markets	
	
	
Marcelo	Wesseler	
CEO	
SP	Commerce	
Presented:	September	27,	2016	at	Retail’s	Digital	Summit
In	this	session	you	will	learn:	
§  Asia	Pacific	–	Market	characterisMcs	and	nuances	
		
§  Proven	strategies	&	best	pracMces	for	entering	Asia	Pacific	
including	India	and	Southeast	Asia	
§  Case	Study:	How	Calvin	Klein	did	it
The big opportunity proven strategies for entering emerging markets
eCommerce by the Numbers: US Vs. Asia Pacific
USD$341.7
Billion
eCommerce
Sales
in 2015
US eCommerce
8.1% of
Retail Share
Q2 2016
APAC eCommerce
USD$835
Billion
eCommerce
Sales
2015
12.4%
of APAC retail
share by 2016
China
eCommerce
grew 33.3%
in 2015
Source: ychart.com, Internet
Retailer, eMarketer
15.8%%
eCommerce Sales
Growth
Q2 2016
Asia Pacific – Key Characteristics
Digital Maturity & Behavior
Source: Wearesocial!	
AVERAGE
CONNECTION
SPEED
20.5 Mbps
in South Korea
Vs. 12.6 in US
ACTIVE
ONLINE
SHOPPERS
60% of
Australia
TIME SPENT
ON SOCIAL
Philippines 3.7
hours
vs. 1.7 hours in
US
MOBILE SHARE
OF WEB
TRAFFIC
India 66%
Global 39%
US 27%
Asia Pacific – Key Characteristics
Logistics, Duties and Legal Frameworks
!	
De Minimis (in USD) –
The challenge with custom duties.
Other regulatory challenges…
•  Complex rules (e.g. import
approvals for many commodities
like books, etc.)
•  Valuation concerns
•  Uneven application of rules
•  Requirement to setup legal entities
to trade in local currency and
obtain domain
•  Foreign ownership restrictions
•  Product restrictions
•  Regulatory approvals
Asia Pacific – Key Characteristics
One Region – Two Different Worlds
Source: Adyen, BI Intelligence, The
Indian Express, Ecommerce
Foundation, Deloitte
DE MINIMIS US$ 0 US$ 942
PAYMENTS 80% Cash-on-Delivery 75% Visa & Mastercard
AVERAGE SPENDING P.C. US$ 247 US$ 1,764
ONLINE SHOPPERS 39 Million
(but will grow 10x by 2020)
12.6 Million
INDIA AUSTRALIA
Asia Pacific – Key Characteristics
Payments
CONSUMER
PREFERENCES
VARY GREATLY
&
REQUIRE
LOCALIZATION
Source: Adyen, BI Intelligence, Payvision
CHINA
Alipay has a 48% share Vs. 1% for Intl. Cards
INDIA
80% Cash-On-Delivery of Flipkart Orders
SINGAPORE
83% Credit Card share SP eCommerce Clients
Asia Pacific – Key Characteristics
Payments
An Example:
PAYMENT
OPTIONS
LOCALIZATION
An SP eCommerce fully managed webstore:
brand.com.sg
brand.com.ph
Asia Pacific – Key Characteristics
Your Business Case
Source: Nielsen
0%
20%
40%
60%
80%
100%
120%
Total Unbounced Search/Browse PDP/Cart Cart Placed Order
% Total sessions reaching each step by market
US
CN
SEA
Scalability & Seasonality Challenges
11/11 example in China
Traffic spike
Desktop + mobile shoppers
Traffic spike
Marketing Challenges
Chat apps are key
The big opportunity proven strategies for entering emerging markets
Asia Pacific – Market Entry Options
Phased Approach
Option 1:
•  Separate international checkout
•  Vendor buys on consumer’s behalf
Option 2:
•  Outsource via vendor-branded
checkout with fraud protection;
•  Careful! Keep customer ownership
•  In-house local team
•  Language
•  Marketing
•  Free local shipping
•  Free local returns
•  Omni-channel enablement,
e.g. fulfill from stores
•  Domain/ Language
•  Payments
•  Fast regional shipping
•  Local returns
•  Hybrid models (drop ship, fulfillment
by market)
•  Franchise option for brands
#1 Ship Cross-
Border
#2 Outsource
Local Setup
#3 Fully
Localize
In-HousePilot Markets!
Learn
One	Hub,	Six	Localized	Sites
Direct shipping from Hong Kong to 7 markets across
Asia Pacific
Insight	into	Buyer	Behavior
Shoppers’ loca<ons, preferences, and spending power
and pa@erns 
Scalability	through	Managed	OperaAons
High scalability through fully managed store opera<ons
and customer care
Rapid	Turnaround
3 months from conceptualiza<on to first site rollout
How Does It
Summary
•  Test the waters before you jump
•  Carefully select markets and platform
•  Know the regulatory & product restrictions
•  Evaluate inventory and fulfillment strategies
•  Marketing will be your biggest expense &challenge
www.yourcompany.com
QUESTION TIME & Chatrooms

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The big opportunity proven strategies for entering emerging markets

  • 4. eCommerce by the Numbers: US Vs. Asia Pacific USD$341.7 Billion eCommerce Sales in 2015 US eCommerce 8.1% of Retail Share Q2 2016 APAC eCommerce USD$835 Billion eCommerce Sales 2015 12.4% of APAC retail share by 2016 China eCommerce grew 33.3% in 2015 Source: ychart.com, Internet Retailer, eMarketer 15.8%% eCommerce Sales Growth Q2 2016
  • 5. Asia Pacific – Key Characteristics Digital Maturity & Behavior Source: Wearesocial! AVERAGE CONNECTION SPEED 20.5 Mbps in South Korea Vs. 12.6 in US ACTIVE ONLINE SHOPPERS 60% of Australia TIME SPENT ON SOCIAL Philippines 3.7 hours vs. 1.7 hours in US MOBILE SHARE OF WEB TRAFFIC India 66% Global 39% US 27%
  • 6. Asia Pacific – Key Characteristics Logistics, Duties and Legal Frameworks ! De Minimis (in USD) – The challenge with custom duties. Other regulatory challenges… •  Complex rules (e.g. import approvals for many commodities like books, etc.) •  Valuation concerns •  Uneven application of rules •  Requirement to setup legal entities to trade in local currency and obtain domain •  Foreign ownership restrictions •  Product restrictions •  Regulatory approvals
  • 7. Asia Pacific – Key Characteristics One Region – Two Different Worlds Source: Adyen, BI Intelligence, The Indian Express, Ecommerce Foundation, Deloitte DE MINIMIS US$ 0 US$ 942 PAYMENTS 80% Cash-on-Delivery 75% Visa & Mastercard AVERAGE SPENDING P.C. US$ 247 US$ 1,764 ONLINE SHOPPERS 39 Million (but will grow 10x by 2020) 12.6 Million INDIA AUSTRALIA
  • 8. Asia Pacific – Key Characteristics Payments CONSUMER PREFERENCES VARY GREATLY & REQUIRE LOCALIZATION Source: Adyen, BI Intelligence, Payvision CHINA Alipay has a 48% share Vs. 1% for Intl. Cards INDIA 80% Cash-On-Delivery of Flipkart Orders SINGAPORE 83% Credit Card share SP eCommerce Clients
  • 9. Asia Pacific – Key Characteristics Payments An Example: PAYMENT OPTIONS LOCALIZATION An SP eCommerce fully managed webstore: brand.com.sg brand.com.ph
  • 10. Asia Pacific – Key Characteristics Your Business Case Source: Nielsen 0% 20% 40% 60% 80% 100% 120% Total Unbounced Search/Browse PDP/Cart Cart Placed Order % Total sessions reaching each step by market US CN SEA
  • 11. Scalability & Seasonality Challenges 11/11 example in China Traffic spike Desktop + mobile shoppers
  • 14. Asia Pacific – Market Entry Options Phased Approach Option 1: •  Separate international checkout •  Vendor buys on consumer’s behalf Option 2: •  Outsource via vendor-branded checkout with fraud protection; •  Careful! Keep customer ownership •  In-house local team •  Language •  Marketing •  Free local shipping •  Free local returns •  Omni-channel enablement, e.g. fulfill from stores •  Domain/ Language •  Payments •  Fast regional shipping •  Local returns •  Hybrid models (drop ship, fulfillment by market) •  Franchise option for brands #1 Ship Cross- Border #2 Outsource Local Setup #3 Fully Localize In-HousePilot Markets! Learn
  • 15. One Hub, Six Localized Sites Direct shipping from Hong Kong to 7 markets across Asia Pacific Insight into Buyer Behavior Shoppers’ loca<ons, preferences, and spending power and pa@erns Scalability through Managed OperaAons High scalability through fully managed store opera<ons and customer care Rapid Turnaround 3 months from conceptualiza<on to first site rollout How Does It
  • 16. Summary •  Test the waters before you jump •  Carefully select markets and platform •  Know the regulatory & product restrictions •  Evaluate inventory and fulfillment strategies •  Marketing will be your biggest expense &challenge