The Future of Internet Retailing in Asia Pacific

© Euromonitor International

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THE FUTURE OF INTERNET RETAILING IN ASIA PACIFIC 2014 AND BEYOND

APRIL 2015

http://www.euromonitor.com/


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$285 BILLION, 2014

30.2% GROWTH IN 2014

$72bn LARGEST RETAILER



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ASIA PACIFIC IN CONTEXT

ONLINE OPPORTUNITIES

THE ROAD AHEAD



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Asia Pacific: Biggest Retail Market Globally


-

1,000

2,000

3,000

4,000

5,000

2014

Ret

ail

sa

les,

ex

VA

T,

US

$ b

n

Global Retail Sales

Asia Pacific Western Europe North America

Latin America Eastern Europe Middle East and Africa

Australasia



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… With Biggest Opportunities


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

200

400

600

800

1,000

1,200

Ret

ail

sa

les,

ex

VA

T,

US

$ b

n

Forecast Retail Growth

2014 - 19 absolute value growth 2014 - 19 CAGR



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Internet Retailing - Fastest Growing Channel


0%

10%

20%

30%

40%

0

100

200

300

400

% g

row

th,

fix

ed e

xch

ra

te

Ret

ail

sa

les,

ex

VA

T,

US

$ b

n

Asia Pacific Internet Retailing Sales and Growth

Internet sales Internet Retailing growth Retail growth

x4

… in every market.



8

0

5

10

15

0

500

1000

1500

Ret

ail

sa

les,

ex

VA

T,

US

$ b

n

2009-14 2014-19 Growth

Internet Retailing – Biggest Opportunity & Challenge for Retailers




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Consumer

Price

24/7

Product range

Product Information

International brands

Congestion

Retailer

Wider audience

Fewer stores

Consumer analytics

Tax/ Cost

International expansion

Internet Retailing Drivers




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THE ROAD AHEAD



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Asia Pacific Biggest Internet Retailing Market


0

50

100

150

200

250

300

2014

Ret

ail

sa

les,

ex

VA

T,

US

$ b

n

Global Internet Retailing Sales

Asia Pacific North America Western Europe

Eastern Europe Latin America Australasia

Middle East and Africa



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… Offering Biggest Opportunities


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

50

100

150

200

250

300

Ret

ail

sa

les,

ex

VA

T,

US

$ b

n

Forecast Internet Retailing Growth

2014 - 19 absolute value growth 2014 - 19 CAGR



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58% 64% 75% 58%

24% 19% 18%

27% 11% 7%

0%

20%

40%

60%

80%

100%

2000 2009 2014 2019

Leading Internet Retailing Markets in Asia

China Japan South Korea

Taiwan India Hong Kong

Indonesia Others

2012: China overtakes Japan for

the first place

2015: India becomes 4th largest market in

Asia Pacific

2016: Indonesia overtakes Hong Kong

as the 6th biggest market

Region of Contrasts




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71

121

210

321

541

629

0 250 500 750

Asia Pacific

Thailand

Malaysia

China

Singapore

Hong Kong

Taiwan

Japan

South Korea

US$ per capita

Internet Retailing Per capita Sales, 2014


71

5

6

0 25 50 75

Asia Pacific

Pakistan

Uzbekistan

Azerbaijan

Philippines

Indonesia

Vietnam

India

Kazakhstan

US$ per capita



15

0.0% 5.0% 10.0% 15.0%

Azerbaijan

Uzbekistan

Pakistan

Philippines

Kazakhstan

Vietnam

Indonesia

Malaysia

Thailand

India

Hong Kong

Singapore

Japan

Taiwan

China

South Korea

Internet Retailing Penetration


China Up Close:

• Underdeveloped

interior

• Price sensitivity

• Rapid online

access

• Strong internet

Players



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1,500 1,700 1,900 2,100 2,300 2,500 2,700

New Internet Users by Region 2009-2014

Users in 2009 Asia Pacific Middle East and Africa

Latin America Eastern Europe North America

Western Europe Australasia

Asia Leads in Internet Users


Asia Pacific:

55% of the increase in users – biggest increase globally

Only 37% of population has access to the internet



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050100

% of Population

Internet Users in 2014


0 50 100 150 200

India

Indonesia

Thailand

Philippines

Vietnam

China

Malaysia

Singapore

Hong Kong

Taiwan

South Korea

Japan

Million of people

637



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2014 Adoption in Asia

1.2 bn internet users

3.7 bn phone

subscriptions

25% mobile internet

subscription

0% 50% 100%

ThailandVietnamMalaysia

Hong KongPhilippines

SingaporeJapanChina

IndonesiaTaiwan

IndiaSouth Korea

Asia Pacific

Share of Smartphone Sales

2008 2013 2018

Smartphones to drive internet adoption




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Mobile Internet Retailing Penetration


22% of all sales

81% CAGR

US$ 61.5 bn

31% in South Korea ■Over 25% ■10 – 25% ■5 – 10% ■Up to 5%



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0% 10% 20% 30% 40% 50% 60% 70%

Latin America

Eastern Europe

Middle East and Africa

Western Europe

Asia Pacific

North America

Australasia

Share of Mobile Internet Sales

2014 2019

Mobile Internet Offers Opportunities




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Smartphones Closing the Gap



http://www.youtube.com/watch?v=fGaVFRzTTP4


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1

10

100

2010 2011 2012 2013 2014

Ra

nk

Ov

er

all

Re

tail

ing

Wal-Mart (1)

Carrefour (2)

Seven & I (3)

Schwarz (4)

Tesco (5)

Amazon.com(6)Alibaba Group(14)

The Alibaba Effect




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0%

50%

100%

0

5

10

15

20

25

30

Ma

rk

et

Sh

ar

e %

Leading Internet Retailers, Asia Pacific, 2014

Marketplaces and Pure players dominate




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Apparel, 21%

Electronics , 15%

Media Products , 10%

Appliances , 9%

Food and Drink , 8% Beauty, 4%

Accessories and Eyewear ,

3%

Home and Garden, 3%

Healthcare , 1%

Traditional Toys, 0%

Other , 26%

Online Product Sales in Asia Pacific




25

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Internet Penetration by Industry, 2014


Consumer Electronics – 15%

Toys & Games - 16%

Consumer Appliances - 18%

Apparel - 12%

Beauty & Personal Care - 9%

Consumer Health – 5%

Less than 3% - Food and Drinks, Home and Garden, Personal Accessories



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THE ROAD AHEAD



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0.0%

10.0%

20.0%

30.0%

40.0%

0

40

80

120

160

US

$ b

n,

ex

VA

T

Forecasted Internet Retail, 2019

2014-2019 Absolute US$ sales CAGR 2014-2019

367

Growth opportunities by market

THE ROAD AHEAD



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Future developments

THE ROAD AHEAD



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0 100,000 200,000 300,000

Jewellery and Watch Specialist…

Department Stores

Chemists/Pharmacies

Homewares and Home…

Apparel and Footwear Specialist…

Supermarkets

Internet Retailing

Additional value sales 2014-2019 , US$ billion, constant terms

Asia Pacific Channel Growth

Forecast Growth Means Online Sales Cannot Be Ignored

THE ROAD AHEAD

28%



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Usage Internet Access

User adoption

Payment methods

Deliveries

Channel integration

Multiple interaction

points

Data availability

Key Challenges

THE ROAD AHEAD



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THANK YOU FOR LISTENING

Premanjali Gupta (Naina)

Regional Communications (APAC)

[email protected]


mailto:[email protected]

The Future of Internet Retailing in Asia Pacific

Business

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