Future of commerce: Understanding Southeast Asian consumers- Accenture


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  • The Future of Commerce has Arrived Understanding the Asian Consumer Indonesia – Not to Be Missed Opportunity
  • Contents Indonesia – Not to Be Missed Opportunity 3 The Asian Consumers Expectation 14 New Platforms and Technology 18 Appendix 23
  • Indonesia : Not-to-be missed Opportunity 5Copyright © 2016 Accenture All rights reserved.
  • 100 million new ASEAN consumers will add over $770 billion in new spending by 2020 ASEAN by 2020 $3 6th 580 +50% $2.3 x2 $770 Trillion USD Economy Largest Economy World Wide Million People Living In Cities Trillion Annual Consumer Spending Consumer Spending To Double By End Decade Billion In New Spend 60 Million New Consumers Able To Purchase Items Beyond Their Subsistence For First Time Greater Number Of Wealthier Consumers Emerging In New Target Cities Outside Asean’s Tier 1 Cities 38 Million Newly Affluent Copyright © 2015 Accenture All Rights Reserved. 6 6 Indonesia Population growth and urban development will drive growth in large and mid-size provinces across the country Moving To Higher-income Tiers And Expanding Access To Premium Product Categories Note: All figures are comparison between 2012 and 2020, ASEAN includes Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam Source: Accenture analysis based on data from Euromonitor International 2013
  • Copyright © 2016 Accenture All rights reserved. 7Accenture Digital Consumer Research in 2015
  • 8 CPG has the opportunity to drive market development of eCommerce in emerging geographies – and take the lead in capturing the share of the consumer’s basket The online shopping landscape in Indonesia and Singapore is less evolved vs. China. With the evolution of technology, this is at the inflection point Need to strategize basis the degree of evolution of online shopping landscape to maximize benefits APAC Digital Commerce Shopping Landscape: China vs. Indonesia vs. Singapore Mature online ecosystem Payments/delivery/Infrastructure Highly evolved consumer with sophisticated demands Readiness to embrace technology interventions in lives Social aspect of shopping Entertainment & Family bonding Comfortability with the online ecosystem Trust and reliability. Quality of products is an issue across all Intensive research before shopping: consumer awareness Research limited to price and deals in Indonesia & Singapore Key technology adopters e.g. Rise of m-commerce Source: Accenture Research: APAC eCommerce Digital Research Copyright © 2016 Accenture All rights reserved.
  • Owing to a rapidly growing consuming class, Indonesia 35.7 52.7 2014 2019 9 CAGR 14-19 Asia CAGR 14-19 World 1.7% 4.6% 3.3% 5.5% 5.2% 6.8% 6.3% 7.3% Home Care Beauty & Personal Care Packaged Foods Soft Drinks CAGR 14-19 Indonesia 5.4% 12.8% 7.2% 8.9% Indonesia shows tremendous potential in beauty & personal care ~3x Global CAGR ~2x APAC CAGR CPG in Indonesia to be up more than 40% in 2019 vis-à-vis 2014; High growth potential makes Indonesia an attractive market Indonesian CPG Market* (USD Bn) CPG Category Growth Indonesia v/s Asia v/s World ~2X Growth Indonesia CPG* 5- year CAGR @ 8.1% v/s Global @ 3.8%. (5 Yr. CAGR 2014-19) * CPG includes packaged food, home care, beauty & personal care and soft drinks Source: Euromonitor International 2016 Copyright © 2016 Accenture All rights reserved.
  • 10 With high mobile & internet penetration, Indonesia is on track to become a potential eCommerce hub; Poised to grow 5X between 2014-18 Copyright © 2016 Accenture All rights reserved. $1.3 Bn 2015 2020 Indonesia eCommerce Retail Sales: All Categories* (USD Bn) ~6X $7.9 Bn Significant growth potential in Indonesia Indonesia • Increase in internet & mobile penetration; Mobile penetration at 126 (subs. per 100 inhabitants) v/s 89 for Asia1 • Growing consumer base; Increase in consumer spending • Rapid development in online ecosystem • High interest and continuous activity in social media – Jakarta is the most twitter active city in the world2 Pros Cons • Consumers do not find online shopping reliable: payments, quality and delivery • Shopping time is family bonding time. How do consumers get similar experience with eCommerce ? Source: See Notes *Includes products or services ordered using internet; from any devices regardless of the method of payment or fulfillment; excludes travel & events If CPG companies do not take actions now, they are at risk to miss the growth potential in Indonesia. Therefore, to grab business opportunities, companies need to shift from conventional to digital models.
  • How Aminah lives in Indonesia ? 11Copyright © 2016 Accenture All rights reserved.
  • 12 Today: How Aminah buys in 2015? Meet Aminah! Looks for price, discount & quality Too much effort in process of browsing online and looking in offline stores Search process is digital with social media but still looks for offline consultation Dislikes long queues in supermarket. But delivery in online shopping is uncertain Prefers paying when she can inspect and receive goods Aminah is very detail & plans for purchase in advance Shopping is the time for family bonding Lives in Jakarta, Works as High School teacher Mother of two kids Source: Online communities research – by Accenture & IPSOS; APAC Expert Interviews; Accenture Research: Accenture eCommerce Digital Research, Copyright © 2016 Accenture All rights reserved.
  • Awareness Consideration Purchase Future - Truly Omni-Channel, path to purchase can start at any interaction with the product. Compare Discover Purchase Consider Loyalty Now - Linear consumer journey – straight steps from need to purchase Aminah is similar to other shoppers across Asia, not following a linear shopping journey. She uses multiple devices and multiple channels to interact with the products. From Linear to Omni-Channel
  • 15 The New Path to Purchase Copyright © 2016 Accenture All rights reserved. Might of Micro-moments Might of Micro-moments Might of Micro-moments Might of Micro-moments Might of Micro-moments
  • 16 Ecommerce in Indonesia is not evolved yet…. And consumers expect some BASIC fixes Unmet Needs of Aminah She values convenience but wants to play safe Is Online trustworthy ? “I want to be sure about the quality. I want to inspect the product before paying” Secure Payments “I wish online shopping was reliable & online payment more secure” Convenience “I wish shopping was more convenient & engaging” Seamless Shopping “I want to enjoy my shopping time bonding with family. I wish purchasing was less time consuming. Offline (checkout) Online (fast delivery) Source: Online communities research – by Accenture & IPSOS; APAC Expert Interviews; Accenture Research: Accenture eCommerce Digital Research Copyright © 2016 Accenture All rights reserved.
  • The Asian Consumers Expectation 17Copyright © 2016 Accenture All rights reserved.
  • The Asian Expectations Copyright © 2016 Accenture All rights reserved. 18 The new Asian consumer expects seamless shopping experiences that save time and make life easier. These expectations are evolving in a dynamic new marketplace that creates huge opportunities for consumer packaged goods (CPG) companies. But they must move now to capture them – or risk ceding control to the digital commerce players that have enabled the region-wide upsurge in digital commerce.
  • Copyright © 2016 Accenture All rights reserved. 19 Today…2016 Give me what I want When I want it Tomorrow…2020 Give me what I want When I need it Beyond: “Nirvana” Give me what I want Before I want it Basic Shopping + Experience Product + Convenience = Value All at a best price! Smart Enhanced Shopping All at a best price! Shopping List Personalized Assistance Shopping = Chore Death of shopping list Automated list Shopping = Digital + Automatic Smart Lifestyle: Integration Focused Shopping fully integrated into life’s moments Shopping List on Smart device Expert guidance Shopping = Fun From Shopping List to Death of Shopping List
  • 20 What Consumers Want Copyright © 2016 Accenture All rights reserved. I wish… I had a SMART Assistant Power of Micro-moment “ I don’t get the product when I want it… I want it NOW” Solutions to Real-Life Problems “I need expert assistance along the way. I don’t want to master household chores; wish somebody could do that for me” Personalized & Niche “I wish I could have products and solution tailored to my needs” Seamless Shopping “Shopping is not seamless – I am constantly worried if the quality will be as promised and if it will be delivered on time”
  • The Future Of Commerce: New Platforms & Technology 21Copyright © 2016 Accenture All rights reserved.
  • 22 CPGs need to relook at their overall digital commerce strategy and integrate it with their strategic vision Imperatives for Success: Define Digital Commerce Strategy Copyright © 2016 Accenture All rights reserved. Develop e-Vision *FMOT refers to first moment of truth Apply e FMOT* principles on three “purchase journey” moments – Stimulus, Moment of Truth, Purchase • Partner with ecommerce platforms – reach new consumers / new markets and retain existing • Leverage cross border ecommerce • Invest in brand engagement: integrating online & offline to lead the consumer to purchase online seamlessly • Integration with digital to source ideas and test product innovation • Digitize supply chain to “delight” at fulfillment • Leverage big data for efficient and effective targeting Source: Accenture Research: APAC eCommerce Digital Research Source: eMarketer
  • By 2020: • Globally, 1/5 connected devices from China • Connected devices in APAC up 3X @ 9Bn • IoT top Strategic Trend: Gartner Connected Devices in APAC (Bn Units)3 23 3X growth in Connected devices could accelerate shift to Digital Commerce More to come… Next in shopping… Connected Commerce? Copyright © 2016 Accenture All rights reserved. •78% buy online because of convenience •91% consumers willing to shift to mobile payments1 •75% use loyalty card on smartphones1 •70% share purchase experience on social media1 When they talked? They said… I want More: “I want a single platform to search, to buy, to share my experience and be rewarded2” 3Bn 2015 2020 3X 9Bn Source: 1DigitasLBi’s China 2015 Statistics; 2Ipsos Survey; 3IDC IoT Report – includes wearables, sensors, smart meters etc
  • 24 Three Core Consumer Engagement Imperatives for CPG Companies Copyright © 2016 Accenture All rights reserved. It’s the Micro Moments Deliver unique experiences that delight and enable loyalty, seamlessly, NOW Enable the Purchasing Decision Deliver the best products to consumers – before they’ve even asked for it Be Omni- Channel Stay connected and on, always
  • 25Copyright © 2016 Accenture All rights reserved. Direct to Consumer Connected Products Smart Home Artificial Intelligence Digital Assistant Future of eCommerce Immersive Store Experience Virtual Commerce Micro Moments Seamless Retail Smart Packaging
  • Appendix 26Copyright © 2016 Accenture All rights reserved.
  • 27 Year 2020: Consumers want to be delighted.....want everything in a MICROMOMENT Copyright © 2016 Accenture All rights reserved. 2015 Research (online + offline) very time consuming & tiring. Exhaustive information not available Online platforms aggregating data all required information across retail data…..scientifically combined with consumer’s purchase history gives best deals in ONE Click 2020 Discover…compare… consider in one Click No need to wait! Long queues take up time. Slow unreliable deliveries often ruin plans 2015 2020 Virtual carts means easy quick check outs. Retailers have been evolved to integrate the best of both world – offline & online 2015 Needs a personal assistant to help in scheduling Connected devices & wearables help her schedule, alert her about what she needs to do2020 Fewer things to think about ? Is online shopping safe & reliable ?? Ecosystem has evolved to provide a secure experience to consumer & win their trust with flexibility in payment options, better quality & On time fulfillment Online = Offline 2015 2020 2015 2020 Lack of multi-sensorial immersive experience for trying beauty products online How has life changed for Aminah in 2020 ??? Virtual reality & 3D fitting rooms help them to experience the products the same way they do in stores Experience anywhere anytime? Source: Online communities research – by Accenture & IPSOS; APAC Expert Interviews; Accenture Research: Accenture eCommerce Digital Research
  • 28 Year 2025: Consumers want to take things off the thinking list…LIQUID consumer experience ! Beyond nirvana: Potential evolution of Indonesian shopping landscape with technology Copyright © 2016 Accenture All rights reserved. How Aminah lives in 2025 ??? Truly connected lives Aminah no longer makes a list. Her wearable prepares a list with the information available from her connected devices….. connected fridge, connected wardrobes Online shopping goes social Aminah likes to involve family while shopping… Merge social with shopping Shop together to get discounts Click and choose Aminah clicks a picture of products with her glasses and gets the best deal on product. On sharing her purchase on social media, she gets redeemable points / cashback …..Not your screen. The implantable measures what personal care products she needs to use, swimwear that absorbs pollution, shirt that measures heart beat The real time data has altered and influenced her decision making Skin is the new interface Secure, reliable online ecosystem Aminah finds online payments are more secure with retinal scans & biometrics. All formats have integrated to provide unique LIQUID consumer experience…across formats Source: Online communities research – by Accenture & IPSOS; APAC Expert Interviews; Accenture Research: Accenture eCommerce Digital Research