Localize to Globalize: Your Next Growth Frontier

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1 Localize to Globalize: Your Next Growth Frontier Sushant Mantry, Vice President Group Logistics, Singapore Post 13 th October 2015

2 Quick introduction to Singapore Post and Quantium Solutions International Postal and e-commerce Logistics Warehousing, Freight, Delivery, Mail VAS ecommerce Clients across 12 countries Shipping 3 million cross-border items per year 1,000 over employees 24 Logistics 4 Call 8 Centers Centers Languages & Dialects Quantium Solutions. All rights reserved. 1

3 Topics for discussion Asia Pacific: Your Next Growth Frontier Delivering to Asia Pacific: Key Considerations Insights and Examples of Successful Cases 2

4 Asia Pacific: a trillion dollar ecommerce market by 2020 e-commerce sales in trillions 100% US$1.1 trillion 100% US$1.9 trillion Source: emarketer 2012 Asia Pacific e-commerce sales expected to exceed US$1 trillion by Cross-border opportunity estimated at billion dollars 3

5 Home to over a billion savvy ecommerce customers Asian middle class over 1 billion strong, more than total population of US and EU Asians are among the most digitally evolved across the globe Sources: econsultancy, HBR

6 Y-o-Y Ecom market growth rate (5 Yr CAGR) A great avenue for western retailers to find growth 35 Size of Ecommerce market (indexed) 30 India Conversion of latent demand as consumers move online Indonesia Vietnam China 15 Thailand Philippines Singapore United Kingdom Malaysia Plateauing growth in evolved markets United States France Germany Japan South Korea Australia Internet penetration 5

7 Key thought for today: Look East 6

8 Topics for discussion Asia Pacific: Your Next Growth Frontier Delivering to Asia Pacific: Key Considerations Insights and Examples of Successful Cases 7

9 Delivering to Asia Pacific: key considerations for your solution Target markets and customers Asian customers buying behaviour Asia s Delivery ecosystem and complications Successful Asia strategies need to factor these in their solution 8

10 Fraction of English Speakers Market entry: which markets to target? 3b 2b >20% ID - 0.3b PH - 0.1b AU - 1.6b NZ - 0.1b TH - 0.3b IN* - 2b MY - 0.3b SG - 0.1b High potential but difficult to execute Most attractive: least marketing & setup costs < 1b 26b <20% JP - 5b HK - 0.2b VN - 2B CN - 20b SK - 0.2b Attractive markets but need localization < 50 > 50 Ease and cost of cross-border import (value at which duty applies) Market size data from UBS ASEAN Report, emarketer.com, statista.com 9

11 Asian ecommerce buying behaviour: 6 key traits Marketplaces Dominate Love Western Brands Social media active Shopping on mobile Prefer cash on delivery Alternate channel savvy 10

12 Designing delivery solutions: 6 key considerations Network infrastructure Customs and Duties Last Mile Distribution Small and fragmented Connectivity issues High de-minimis variance Process transparency Local Heroes Postal quality variance Alternate Channels Cash on Delivery Returns management Self-service lockers Convenience stores Higher returns Handling risk Duty drawbacks difficult VAS quality 11

13 Topics for discussion Asia Pacific: Your Next Growth Frontier Delivering to Asia Pacific: Key Considerations Insights and Examples of Successful Cases 12

14 What is your market entry strategy? #2 Go Local - Local payments - Local delivery & returns - Local content - Omni-channel enablement #1 Ship Cross- Border a) Parcel forwarding b) Cross-border merchant enablement North Asia - China - Japan - South Korea - India Beachhead Markets - Australia - Singapore - Malaysia - Thailand Etc.

15 Case study: AU s largest online retailer #1 online shopping club with 380 brands Targets market Delivery solutions in 5 countries; SG, MY, PH, TH and KR from 3 origins orders a day across countries Commercial clearance; fully tracked products 7-15 days TAT A 360 Approach Involve all stakeholders suppliers, brand owner, 3PLs, final customer cutting down vendor bureaucracy and Cross-Border lead times Direct injection into destination countries for faster turnaround Expertise on commercial custom clearance

16 What is you network and fulfilment strategy? Pros Cons Most suited for Examples Ship Direct from mother DC Low set up costs D&T advantage Less overhead Higher line-haul Higher TATs Compact lowvalue items with broad SKU portfolio 2012 Regional DC and fulfilment Good balance between setup costs, D&T advantage and TAT Higher set up cost Customs clearance issues in certain countries Higher line-haul cost Pre-order sales campaigns Increasing volumes Local DC and fulfilment Highest service quality possible Lowest delivery costs High set up costs High inventory cost Bulky, fast-moving goods with few, high-selling SKUs 2015 (F)

17 Case study adidas launched online retail sites in Southeast Asia with SP ecommerce s full service ecommerce solutions. Started with regional fulfilment in 5 markets 16 weeks from concept to live operations In 2015, went local into all markets Quick time to market Localized sites, content & services Regional, scalable, agile partner ecosystem

18 How to have a distinctive last mile delivery solution? Delivery Network with 24x7 Delivery Options In-store collection Home delivery Convenience store 24x7 collection Self-service Parcel Locker collection Access points across whole of country country 24x7 collection & return options Cash and electronic payments on delivery International shipping facilities Fully-featured last mile delivery options Marketing features for e-commerce merchants

19 Tell us about your challenges

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