Mark Morley, GXS Director of Industry Marketing, delivered this presentation at the EDIFICE 109th plenary in Amsterdam in October 2009. Presentation is an overview of the B2B e-Commerce trends in China, India, Eastern Europe, Saudi Arabia, Africa and Southeast Asia.

1. From BRICs to MEATSE -
Review of B2B in Emerging Markets
Steve Keifer Vice President Industry and Product Marketing
Keifer,
Mark Morley, Industry Marketing Director

2. Introduction
&
What this presentation is not about !
What this presentation is not about !
October 31, 2009 Slide 2
© Copyright 2009, GXS

3. BRICs & MEATSE
• BRIC – • MEATSE –
– Brazil – Middle East
– Russia – Africa
– India – Thailand
– China – South East Asia
October 31, 2009 Slide 3
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4. China
October 31, 2009 Slide 4
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5. Infrastructure Challenges in China
• Electrical power infrastructure is
overloaded
• Reliability of the ‘public’ internet
• Central and western regions have
Beijing poor communications networks
• Availability of personnel with prior
B2B e-commerce experience
• Vendors 24x7 technical support in
Shanghai
mandarin or Cantonese remains
limited
li it d
Hong Kong
• Documentation in Chinese remains
limited for technology software
and services
October 31, 2009 Slide 5
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6. Three Levels of Technical Capabilities
Multi-National Large Chinese Small Chinese
Corporations Corporations Corporations
– Expertise in ERP, EAI – New to ERP, EAI and B2B – No experience with B2B
and B2B e-Commerce e-Commerce e-Commerce
– Large programs being – Selected programs being – Very low participation
deployed in China today deployed in China today rates today
Segmentation helps to identify early adopters
October 31, 2009 Slide 6
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7. E-Commerce Drivers in China
– Respond to rapid growth opportunity in market
Scale – Automating functions improves throughput
Quickly – Eliminates latency from business processes
– Improve perfect order fill rates
Customer – Minimize shipment delays and errors
Experience – Reduce invoice discrepancies
– Production forecasts, financial results or key
Corporate performance indicators sent to corporate
– ERP systems house data, but the source is often
Visibility external – customers or suppliers
– Become easier to do business with
Grow – Meet expectations of foreign MNCs
B i
Business – I i i lit d t
Improving responsiveness, quality and customer
experience provide advantage
October 31, 2009 Slide 7
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8. B2B e-Commerce Readiness
How secure and reliable is the
Multi-National power and network Large & Mid-Size
Customers infrastructure? Are technical Suppliers
support and consultation
available?
What level of What are SMBs
Enterprise Internet or Internet or access to PCs,
Systems exist Private Phone Internet, and
for ERP, EAI, Network Network Accounting
B2Bi? software?
Your Enterprise Systems
Which business processes are
being automated? What
document standards and
Large, Domestic network protocols are being Small
Customers used? Suppliers
October 31, 2009 Slide 8
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9. B2B Standards in China
Joint Automotive Standards Effort to Recommend B2B Standard
B2B E-Commerce • One of the most recent studies into
Standards used in China B2B usage across China was
Other - 5% conducted by JAIF
ANSI EDI
- 3%
• EDI usage in China is relatively low
• Fax, email and web forms are the
XML -
23%
dominant e-Commerce platforms
• Microsoft Excel is one of the most
widely used business tools
• EDI i t i ll used by Joint Venture
is typically db J i tV t
operations, ie Western OEMs
partnering with domestic companies
• EDI transactions typically based on
OEM HQ standards
EDIFACT
- 69% • JAIF report recommended use of
Source: 2007 Joint Automotive Industry Forum
International Position Paper for China B2B
p
multiple standards, UN/EDIFACT and
OAGIS XML BODs
October 31, 2009 Slide 9
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10. India
October 31, 2009 Slide 10
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11. Infrastructure Challenges in India
• As with China, ICT and power infrastructures
vary dramatically across the country
• The country is land locked to the north by
the Himalayas, exports are via air and sea
Himalayas
• Moving goods across India is hindered by
very poor road / rail network infrastructures
• Logistics industry is highly fragmented
October 31, 2009 Slide 11
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12. B2B in India
• The automotive industry was one of the
first to start using EDI with western OEMs
• Government led transportation and
logistics related projects are the most
advanced users of EDI in the country
• Automotive/high tech companies are using
western EDI standards, financial
organisations are using home grown
standards and there is limited use of EDI in
the emerging retail sector
h i il
October 31, 2009 Slide 12
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13. India eTrade Project
• The Indian Government is funding one
of the most advanced EDI projects in
the country
• This project was initiated to help
improve the way in which Indian
companies trade with international
trading partners
• The aim is to provide a seamless B2B
infrastructure to link 11 sea ports, 7
airports, customs agencies, banks
p , g ,
and logistics providers
October 31, 2009 Slide 13
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14. India Customs EDI System (ICES)
India Customs & Excise
• 8500 users including air cargo
carriers,
carriers shipping agents financial
agents,
institutions and port operators
• E-filing services for import,
exports, tax payments and license
Bills f Entry (Import)
Bill of E t (I t) Customs Duty Payments
C t D t P t verification
Shipping Bills (Exports) Export Quota Information
Cargo Manifests Trade Statistics • EDI customs documents
processed at 40 different offices
B2B Gateway GXS Solution
National Import Export Commodity • In partnership with Wipro services to
Database ICES Database
India Customs EDI
perform upgrade of gateway
Service • B2B Gateway with traditional EDI
mailboxes and XML web services
• High performance translation server
for 150 message types
• Multiple communications options - E-
mail,
mail Web Portal and Internet based
Internet-based
DGFT RBI DGCIS Ministry of protocols such as FTP
Steel
October 31, 2009 Slide 14
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15. Benefits of ICES
• Makes it easier for Indian based
companies to conduct business
electronically with multi-national
organisations and to on-board
trading partners in India
• Improves the visibility of global
shipments
• Reduces the amount of counterfeit
goods entering the supply chain
October 31, 2009 Slide 15
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16. Eastern Europe
October 31, 2009 Slide 16
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17. Europe’s i2010 Strategy Report
• The i2010 report was compiled by the
European Commission in order to
evaluate the B2B readiness of each
European Union member country
p y
• The report reviews the broadband
p
penetration, ICT usage and e-Business
, g
adoption levels of each member country
• Based on the findings of the report, a
g p
common strategy is being developed to
improve all aspects of ICT and e-
Business usage across EU
October 31, 2009 Slide 17
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18. Evolution of the Legal and Technical
Landscape
p
October 31, 2009 Slide 18
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19. EU Broadband Penetration, Jan’08
October 31, 2009 Slide 19
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20. Generate Average Ranking
Calculate average ranking of ‘B2B Readiness’ against EU27
CZ C
Czech R
h Rep. CZ SN SK LT PL ES RM HU LV BU
SN Slovenia
SK Slovakia
LT Lithuania
PL Poland
ES Estonia
RM Romania
LV Latvia
HU Hungary
BU Bulgaria Average ranking of B2B capabilities against EU27 11.50
11.34 12.08 15.58 16.41 17.50 17.72 19.66 21.00 21.16 22.41
Data sourced from research conducted by e-Business Watch - http://www.ebusiness-watch.org/
October 31, 2009 Slide 20
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21. B2B Readiness of Eastern Europe
(Based on the EU27 average ranking of e-Commerce / e-Business processes
currently being used across the countries)
cu e t y be g ac oss t e cou t es)
• The B2B readiness of Eastern European
6 countries varies according to their
9 proximity to Western Europe
4 • Significant numbers of Western European
companies have established plants in
5 Czech Republic, Slovakia and Slovenia
1
which has helped to accelerate the
3
adoption of B2B technologies in these
8
particular countries
2
7
• The most recent countries to leave the
former Soviet Union are the slowest
10
adopters of B2B technologies
October 31, 2009 Slide 21
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22. Country Review of Key Industries
Furniture Machinery Auto Energy / Raw
CPG High Tech Textiles Finance Pharma Chemicals
Manufac. Manufac. Manufac. Utilities Materials
Bulgaria
Czech
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
R i
Slovakia
Slovenia
In terms of popularity, the 1. Machinery Manufacturing, Consumer Process Goods
key industry sectors of
2. Energy / Utilities, Raw Materials, Chemicals, Textiles
Eastern European countries
can be grouped and ranked 3. Automotive Manufacturing, High Tech, Finance
into the following order of 4. Pharmaceuticals, Furniture Manufacturing
popularity:
October 31, 2009 Slide 22
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23. Market Attractiveness
Based on B2B Readiness & Industry Alignment
CZ Czech Rep. High 10
Attractive
SN Slovenia eadiness Ranking
g CZ
SN
SK Slovakia
Compared with EU27
LT Lithuania 15
SK
LT
B2B / e-Commerce Re
PL P l d
Poland
ES PL
ES Estonia
RM
RM Romania 20
LV HU
LV Latvia
BU
HU Hungary
Less Attractive
BU Bulgaria Low 25
0 10 20 30 40 50 60 70 80
Weak Industry Alignment Strong
Data sourced from research conducted by e-Business Watch - http://www.ebusiness-watch.org/
e Business http://www ebusiness watch org/
October 31, 2009 Slide 23
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24. Why not BRITVC?
Victoria Britney
Beckham Spears
A Soft Drinks Celebrity
Manufacturer Comparison Site
www.britvic.net
October 31, 2009 Slide 24
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25. MEATSE Defined
Russia
China
Thailand &
South East
Asia
India
Middle
East &
Africa
Brazil
October 31, 2009 Slide 25
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26. Middle East
Market Opportunity Overview

27. Saudi Arabia
King Abdullah Economic City under Development - Focus on Energy & Transportation related industries
October 31, 2009 Slide 27
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28. Opportunities for ICT Manufacturers
Cisco & Ericsson
have already
secured
government
contracts
• Broadband growth
rate of 90%
t f
Source: Business Week • Mobile phone
growth rate of 46%
Size f Saudi A bi ’
Si of S di Arabia’s
• Internet service
Economy has nearly doubled growth rate of 23%
in past in four years
p y
October 31, 2009 Slide 28
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29. Saudi EDI - Trade Automation
Ocean Air Cargo Freight
National
Carrier Ca e
Carrier Forwarder
Labs
L b
Automotive Importer Ministry of
Health
ICT & Electronics I
El t i Importer
t
Import Declaration Customs
Export Declaration Saudi Department
Consumer Products Importer
EDI
Import Manifest
Internet (Crimson Coast
Logic) Guard
Petrochemicals Exporter
Payments Due Ministry of
Oil Exporter Agriculture
Industrial Goods Exporter Chamber of
Commerce
Sea Port Air Port Customs Source: D t gathered f
S Data th d from htt //http://www.saudiedi.com
di di
Authority Authority Broker Note Saudi EDI has no affiliation with GXS
October 31, 2009 Slide 29
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30. Africa
Market Opportunity Overview
October 31, 2009 Slide 30
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31. Africa – Rapidly Growing Networks
Less than 20% of
Africans have
electricity
Less than 2% of
Africans have
Af i h
telephones
Sub-Saharan Africa is
100X size of the UK,
but has fewer roads
2000% Mobile
Subscriber Growth in
period of 7 years
SEACOM – 15 000km Fiber Optic Cable linking
15,000km Source: Af i - Gl b l I
S Africa Global Innovation O tl k Report 3.0
ti Outlook R t30
Mainland Europe, East Africa and India
October 31, 2009 Slide 31
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32. South Africa – The Largest Economy
25% of Africa’s GDP, but
40% of Telecom
Subscribers
Only 5% have Broadband
(Pigeons are faster)
(Pi f t )
Fast Growing Call Center &
BPO Sector
EDI Adoption in Retail, Auto
and Logistics
Major Telecom upgrades are planned for
the upcoming 2010 FIFA World Cup
October 31, 2009 Slide 32
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33. Northern Africa – Maghreb Region
October 31, 2009 Slide 33
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34. Morocco – Supply Chain Visibility
Ocean Port Import De-Cons- Distribution Ground Arrival at Invoice Accounts Payment
Arrival Processing olidation Center Transit Store Received Payable Issued
End-to-End Supply Chain Visibility
pp y y
Retailer
Physical
Shipment
Manufacturer
Automate Order to Cash Cycle
Order-to-Cash
Order Revision Advanced Ship VAT-Compliance Self-Billing Supplier Performance
History Notification E-Invoicing (Evaluated Receipts) Scorecards
PO Change & DC & Store Level Supply Chain Supplier P
S li Payment t Buyer KPI
Order History Inventory Visibility Finance Status Inquiry Tracking
October 31, 2009 Slide 34
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35. Thailand & Southeast Asia
Thailand and
South East Asia
Market Opportunity Overview
October 31, 2009 Slide 35
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36. Intel’s $1B Semiconductor Plant
Vietnam has among the lowest http://www.intel.com/pressroom/archive/releases/20060228corp.htm
wages in the world (40% lower
than China or India)
October 31, 2009 Slide 36
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37. Thailand Electronics Sector
Strong logistics, low
cost labor and cheap
property are attracting
foreign investment
Electronics are 30% of
Thailand’s exports
Hard Disk Drives
• #1 HDD and components
manufacturing base
f t i b
• Since 2005, have supplied
nearly 50% of world’s HDD
October 31, 2009 Slide 37
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38. Single Window Example
Royal Thai Customs
y
Thailand Philippines
Steamship Air Cargo Freight Food & Drug
Importer A Carrier Ca e
Carrier Forwarder Administration
d st at o
Department of
Importer B Fisheries
Importer C Import Declaration
Customs Customs
Certificate of Origin
Department Department
E-License
Financial Single
Internet Window
Wi d
Institution(s) E-Manifest
E-Payments Department of Department of
Foreign Trade Foreign Trade
Export Declaration
Exporter A
Department of
Exporter B Livestock
Exporter C
p Department of
Sea Port Air Port Customs Agriculture
Operator Operator Broker
October 31, 2009 Slide 38
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39. Thank You
October 31, 2009 Slide 39
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