01 EXECUTIVE SUMMARY Europe’s new normal

APAC Ecommerce Report

Pattern’s view on which markets and online marketplaces offer consumer brands the best growth opportunities in Asia Pacific

May 2021 1 PATTERN OFFICES Our global footprint

SALT LAKE CITY TEGELEN LONDON MUNICH HONG KONG SHANGHAI

Talk to us about growing your APAC ecommerce sales now China, Japan & South East Asia: DUBAI GUANGZHOU MELBOURNE SYDNEY [email protected] Australia: [email protected]

/2 INTRODUCTION About this report

Thanks for downloading our Pattern runs a market ranking latest piece of content on exercise for the brands we ecommerce in the Asia Pacific partner with, to determine Contents region. We have had a presence which APAC markets and in APAC for nearly a decade; first marketplaces are the best fit for landing in Australia, then Hong their brand and provide the most Kong and mainland China, and opportunity. Factors we consider 4 35 more recently Japan and South include, product suitability, EXECUTIVE THE POWER OF East Asia. existing cross-border sales, brand SUMMARY SOCIAL SELLING awareness, local competition and Each of these markets is very the cost of acquisition marketing different in a number of ways, to drive sales. 5 36 however the data we present KEY COUNTRIES SELLING CROSS- on the following pages shows During 2021 we will launch Profiling Australia, BORDER IN APAC that they have two things in Western brands on Tmall and China, Indonesia, common; strong ecommerce JD.com in China, Amazon Japan, Malaysia, sales growth and marketplaces in Japan and Australia, and Philippines, being a key online sales channel Lazada across South East Asia. Singapore, South 37 for Western consumer brands. In addition, we partner with Korea, Thailand & THE ROLE OF D2C brands already selling on those Vietnam. SITES While we’ve bought them marketplaces to improve their together in this report, brands presence and drive profitable who want to enter these markets sales growth. 25 38 online or grow their ecommerce MARKETPLACES ABOUT PATTERN sales should be aware of these 2021 is a year of recovery. Now Key APAC Our marketplace differences and focus on the is the perfect time to revisit marketplaces profiled: trade partner ones that are the best fit for their APAC expansion plans that may Amazon, Coupang, and consulting brand. One marketplace won’t have been put on hold during JD, Lazada, Rakuten, proposition give you coverage of the entire the pandemic and ensure your Shopee and Tmall. explained. region. brand is benefiting from this fast- growth region.

/3 EXECUTIVE SUMMARY Executive summary

This diverse region benefits from ecommerce growth opportunities in both its mature and emerging markets. Capitalising on them requires local knowledge and a willingness to invest to reach scale.

On the face if it, markets such These include: While all this is true, there When creating an ecommerce as China, Australia, South Korea l Economies that are bouncing can also be reasons why these strategy for markets in this and Indonesia couldn’t seem back relatively quickly from markets may be difficult to region you must also think more different. Each is culturally the COVID-19 pandemic; crack. Entering China requires about the models and partners unique, at a different stage of significant investment in brand to use. For the majority of ecommerce development; and l Relatively high ecommerce awareness and acquisition these markets we recommend they vary hugely in the number growth rates and further marketing, as well as a cross-border selling as a and spending power of their ecommerce penetration willingness to take a longer-term starting point; and many of the online shoppers. potential; view on breaking even. marketplaces profiled in this report are great for enabling Yet they have some clear factors l Marketplaces being a key Executing a marketplace- this. in common that means the online route to market. first strategy for South Korea region, and individual markets means listing on local player Not only do they allow cross- should definitely be on the radar In particular, China’s scale and Coupang, which few Westerners border selling, but they are of Western brands who feel that willingness to embrace online have experience of. And when developing infrastructure to they’ve maximised their growth shopping makes it attractive, selling through marketplaces make it quicker and easier for potential in their home markets. South Korea has some of the in Australia you’ll face fierce Western brands to ship orders most tech-savvy citizens on competition from the country’s into the region too – Coupang earth, and Australians speak established omnichannel and Tmall have both invested in English; making it a natural retailers. Western warehouses. market to expand to for USA and UK brands. We’ve set out some of the most Lazada, Shopee and Amazon important datapoints that you all serve multiple markets. For need to understand when you this reason, you must think We’ve set out some of the most are first exploring whether any of strategically about the APAC these markets could be right for trade partner or trade partners important datapoints that you need to your brand. you work with to ensure that understand when you are first exploring they have the experience and scale to support you in all whether any of these markets could be of the countries that these right for your brand marketplaces supply.

/4 KEY COUNTRIES

Australia Australia’s economic record in Though stores were able to open in the POPULATION 2020 was a game of two halves. The economy shrank by 1.1% final quarter of 2020, part of the shift in overall, but after the steepest behaviour to shop online has stuck quarterly GDP fall in history, the 25.5M rebound in the second half of the year was equally as impressive. The competition among the key Data from our own research in URBANISATION Australia is expected to be back ecommerce sites in Australia is the Australian market shows to pre-COVID GDP levels by the quite different to other markets that Amazon benefited from middle of 2021. in the region. First, the share the restrictions on physical of traffic and sales is split retail in 2020. When we polled 86% One of the drivers of the bounce among a much larger group Australian online shoppers in back has been consumer of retailers and marketplaces August 2020, 47% reported that MEDIAN AGE spending, particularly online than in other markets, as offline they had bought something from spending. Online shopping retailers developed sophisticated Amazon.com.au in the past year, volumes grew by 44% according ecommerce sites. eBay has been up from 30% who had done so a to AusPost, based on the very successful in the market year previously. 38 difference in number of parcels and Amazon was a relatively late it delivered in January 2021 and entrant. While Australia is a relatively the same month in 2020. small market by population size, Amazon.com also appears the wealth of its inhabitants and Though stores were able to open in the list of top shopping the fact the majority live in metro in the final quarter of 2020, part sites alongside the local areas makes it a great target of the shift in behaviour to shop version. It can still be cheaper market for selling online. The online has stuck. Online sales in for Australian shoppers to population is not fast-growing, December 2020 were up 55% buy products from the US site but the percentage of total year on year, according to the than the local version, and the retail sales that are online is still Australian Bureau of Statistics, product selection is also still relatively small, and so double- and more than 5.6 million considerably larger. digit ecommerce sales growth Australian households shopped is predicted for at least the next online that month; 21% more than Amazon opened a local three years. in December 2019. operation in late 2017 and has not been as quick to grow its

Sources: sales as some commentators had United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, anticipated. However, 2020 was SimilarWeb, Internet Retailing, Australian Broadcasting Corporation, Sydney Morning Herald a turning point.

/5 KEY COUNTRIES

Australia VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 25.5M $20BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 86% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $1527

TOP 4 SHOPPING SITES 38 86% 7% BY TRAFFIC SHARE 12% 6%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 4%

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 57% 70% 3%

/6 KEY COUNTRIES

China Bouncing back relatively quickly Ecommerce has come a long way in China POPULATION from the pandemic compared to Western countries, China still in a decade, and Chinese online shoppers managed to achieve 2.3% growth should be considered amongst the most in its economy in 2020, with the sophisticated in the world 1.4BN final quarter back up to 6.5% growth compared to the prior year. URBANISATION However, unlike Western Pinduoduo is believed to have Retail sales contracted slightly economies, there are still several slightly more active users than for the whole of 2020, but in hundred million consumers who Alibaba but has not yet had the final quarter of the year are yet to gain internet access. For the same success at attracting 61% grew 4.6%. And online sales of this reason, we expect significant Western premium and luxury consumer goods rose by 14.8% further online sales growth as brands to join the platform.. MEDIAN AGE according to official figures, now the rest of the population comes It recorded a GMV of US$256 making up about one-quarter of online, in addition to those that billion in 2020, and its users tend total retail sales. already shop online buying more. to make lower value purchases on the platform. 38 The Chinese government is Chinese ecommerce is targeting further GDP growth of dominated by three big players Many Chinese consumers primarily more than 6% in 2021; but notes Alibaba – which runs Tmall, Tmall or only access the internet on that there are some impediments Global and Taobao – JD.com mobile devices. Both Tmall and to consumer spending. and newer entrant Pinduoduo. In JD.com report high usage of addition to this, smaller specialist their mobile apps. Pinduoduo Ecommerce has come a long marketplaces have emerged has taken this a step further – the way in China in a decade, and to become expert in particular marketplace is mobile-app only. Chinese online shoppers should product categories and larger be considered amongst the brands tend to have a Chinese Marketing strategies for China most sophisticated in the world. direct-to-consumer site too. also need to take into account the The online spend per customer bias towards mobile apps – and average of US$1276 makes Western brands focus their should include WeChat, Douyin Chinese customers as valuable as marketplace presence on Tmall (the Chinese version of Tiktok) those in the West. and JD.com, while Pinduoduo and, for premium brands selling has taken market share by selling cross-border, social shopping cheaper items to consumers site RED. We also discuss the Sources: who are newer to ecommerce in importance of livestreaming in United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, CNBC, Pinduoduo China’s smaller cities. more detail on p35.

/7 KEY COUNTRIES

China VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 1.4BN $877BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 61% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $1276

TOP 4 SHOPPING SITES 38 67% 23% BY TRAFFIC SHARE

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 82% 78%

/8 KEY COUNTRIES

Indonesia An economic growth engine of However, as with several other Despite Alibaba owning Lazada, POPULATION Southeast Asia, 2020 was the markets in the region there it has also invested in Tokopedia, first time that the Indonesian will be two drivers of growth – which has more than 100 economy had shrunk in more more of the current population million customers and 10 million than 20 years after experiencing coming online and those already merchants, the majority of 273.5M the highest COVID-19 caseload shopping online buying more. whom are Indonesian and new and death toll in the region. Down Though the country is made entrepreneurs. Tokopedia claims URBANISATION by 2.1% in 2020, the good news up of more than 17,000 islands, to reach 99% of districts in the is that GDP is forecast to bounce more than half of the population country. back at circa 5% growth in 2021. lives on the largest island Java, and the capital Jakarta has more Meanwhile Bukalapak has formed 56% The Indonesian government is than 30 million citizens within the a partnership with Microsoft. As hoping to inoculate more than metropolitan area. well as adopting the tech giant’s MEDIAN AGE 180 million of its 273 million platform for cloud computing, population, to get ahead of Indonesia is said to be online Microsoft has made a strategic further waves of the virus and marketplace Shopee’s biggest investment in the marketplace. It boost both consumer sentiment contributor to its overall web has six million online merchants, 30 and spending. traffic, but there are two other another six million offline local Indonesian marketplaces merchants and 100 million The statistics for Indonesia show also present – Tokopedia and customers. huge growth potential. Between Bukalapak. Lazada is the other 2015 and 2019 the Indonesian international marketplace with a ecommerce market grew at a presence in the country. Shopee compound annual growth rate of and Lazada are the platforms 88%, with the value of products probably best suited to Western sold online worth US$18 billion. brands who want to grow their online sales in the market. While the majority of the population is online, and the majority of those have purchased something on the web, online’s share of total retail sales is still Between 2015 and 2019 the Indonesian very low at 3%. As an emerging ecommerce market grew at a compound economy, Indonesian average Sources: online spend is also low at US$241 annual growth rate of 88%, with the value United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, Reuters, Statista, Tamebay, Web Retailer, Tokopedia, The Jakarta Post per person each year. of products sold online worth US$18 billion

/9 KEY COUNTRIES

Indonesia VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 273.5M $18BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 56% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $241

TOP 4 SHOPPING SITES 30 73% 3% BY TRAFFIC SHARE 23% 21%

PERCENTAGE OF INTERNET USERS PERCENTAGE OF INTERNET USERS THAT THAT USE SHOPPING APPS PURCHASED A PRODUCT ONLINE 6.5%

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 55% 88% 6.5%

/10 KEY COUNTRIES

Japan While Japan managed to contain While the internet penetration The third is a newer entrant POPULATION its COVID-19 outbreak better rate is high, and the majority of PayPay Mall, which was launched than many other developed those with internet access buy by Yahoo Japan in 2019 and has nations, its economy paid the something online, Japanese taken its lead from Alibaba in price, with GDP shrinking by consumers are conservative and combining a mobile payments 126M 4.8% in 2020. so much consumer spending app and online shopping remains offline. destination. It has quickly URBANISATION After the worst quarterly bought a new dynamic to the contraction in the Japanese Even at the height of the market, which was previously economy since the Second pandemic, when the Japanese dominated by the other two World War in the second quarter, government asked the players. 92% a bounce back in the second half population to practice restraint of the year was driven by private about leaving their homes, only PayPay Mall allows retailers and MEDIAN AGE consumption. 37% said they spent more online. brands to create a store in the online mall; and was launched A large economic stimulus The research conducted in May to complement the PayPay package announced in 2020, by Rakuten Insight, saw smartphone payment app, which 48 December 2020 include subsidy 56% of respondents saying that has had 35 million Japanese programmes to drive domestic the pandemic had no impact on users since its launch in October travel and consumer spending, their online shopping behaviour. 2018. Some 2.8 million stores and $9.6 billion to accelerate and merchants accept PayPay, digital transformation. Despite this, Japan is still an and the business also launched attractive market for brands PayPay Flea, for consumer-to- It is one of the paradoxes of to sell to consumers online, consumer transactions. the Japanese market, that and there are three online despite seeming to be very marketplaces that between Cross-border shopping is not as technologically advanced in them provide good coverage of popular in Japan as other Asian many ways, online shopping the market. markets, and so a local entity penetration has lagged that or marketplace seller partner is of less economically developed Rakuten Ichiba is a domestic ideal for brands who want to list Asian markets, standing at Japanese marketplace which and sell their products on any of only 8%. provides a platform for third- these three marketplaces. party sellers only. Amazon is the second important player; and Sources: sells goods directly as well as United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, Nikkei, Tamebay, Web Retailer, BBC, Statista allowing third-party sellers.

/11 KEY COUNTRIES

Japan VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 126M $91BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 92% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $1119

TOP 4 SHOPPING SITES 48 86% 8% BY TRAFFIC SHARE 21% 21%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 4.5%

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 45% 69% 3%

/12 KEY COUNTRIES

Malaysia Malaysia has a lot of positive The data on the following Ecommerce sales POPULATION characteristics as an ecommerce page shows that while internet market, and we expect the shift penetration is high, and the grew significantly to online shopping seen during majority of Malaysians do some in 2020 – up by an the pandemic will only make shopping online, the amount they 32.4M it a more attractive place for spend is still relatively low. estimated 24.7% Western brands to sell their URBANISATION goods online. Ecommerce only makes up Lazada’s owner Alibaba has a very small percentage of also backed a Digital Free Trade A connected population, total consumer goods sales. Zone that has been designed to increasing middle classes and These conditions mean that encourage online trade between 78% a government commitment the ecommerce market has Malaysia and China. One of the to support the growth of yet to reach maturity, with a stated goals of the zone is to MEDIAN AGE ecommerce explain why it’s compound annual growth rate of make Malaysia an attractive predicted to be the next market 14.3% between 2020 and 2024 destination as a regional in the region that Amazon would forecast. fulfilment hub for brands who want to enter. want to reach Southeast Asian 30 Malaysians can already buy customers. Malaysian GDP did drop by products available for global 5.6% in 2020, and unlike other shipping from Amazon.com, Malaysia could be one of the markets, the decline was still and this will have allowed the most competitive ecommerce accelerating in the fourth quarter marketplace to assess the markets in the region in the of 2020. However, prior to this likely demand for an entry into next few years, with Shopee the economy was growing well, the market. With an instance trying to defend its market- up 4.3% in 2019. already live in Singapore, it leading position, and Lazada and has infrastructure in place on potentially Amazon both trying Ecommerce sales grew Malaysia’s doorstep. to provide competing platforms significantly in 2020 – up by that will target Western brands an estimated 24.7% – and If Amazon does enter the market who want to reach Malaysian ecommerce is one of the pillars it will have stiff competition from consumers. of the Malaysian government’s Shopee and Lazada. Shopee post-COVID recovery plan. is by far the leader in terms of share of online traffic, and provides next-day delivery to the Sources: majority of the country through United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, Global Data, JP Morgan, Tamebay, The Straits Times, MATRADE a tie-up with DHL.

/13 KEY COUNTRIES

Malaysia VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 32.4M $3BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 78% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $384

TOP 4 SHOPPING SITES 30 98% 1% BY TRAFFIC SHARE 41% 12%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 4%

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 61% 82% 3%

/14 KEY COUNTRIES

Philippines The value of the ecommerce The demographics of the Online POPULATION market in the Philippines looks country also support longer- very small compared to some term ecommerce growth, with marketplace other countries in the region, but a large population that is young visits and usage it is growing and can be a good and already well connected to are reported 109.6M add-on market for brands who the internet. Social media use are choosing to sell on platforms is very strong in the Philippines to have grown URBANISATION where it is possible to ship cross- and SME sellers have already quickly through border. sprung up to sell goods on social platforms such as Facebook and the pandemic, The economy contracted by 9.5% Instagram. and online sales 47% in 2020, in what was its worst performance since 1947. However, None of the main ecommerce may have doubled MEDIAN AGE a quick recovery is also predicted, sites in the country are local. during 2020 with a GDP rise of at least 6.5% Shopee has the most traffic, predicted in 2021 and a return to but has a smaller traffic share pre-COVID levels by mid 2022. advantage over its competitors 26 than in other markets, such as Online marketplace visits and Malaysia. It’s also interesting to usage are reported to have note that Amazon and Alibaba grown quickly through the both feature in the top shopping pandemic, and online sales may sites list, due to cross-border have doubled during 2020. ecommerce activity. Estimates for the annual value of ecommerce sales by 2025 go as As well as these international high as US$12 billion. players, regional online fashion site Zalora also does well in the A survey conducted by Global Philippines and provides a sales Web revealed that 48% of channel for many large Western Filipinos plan to shop online fashion brands. more once the pandemic is over. It is felt that there is substantial pent-up demand for products in categories including fashion, Sources: consumer electronics and home United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb/ ING, Inside Retail Asia, Global Data, Business World accessories.

/15 KEY COUNTRIES

Philippines VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 109.6M $952M URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 47% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $102

TOP 4 SHOPPING SITES 26 74% 1% BY TRAFFIC SHARE 38% 29%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 6%

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 59% 76% 1%

/16 KEY COUNTRIES

Singapore Singapore was one of the first This explains why the average Lazada and Amazon are next on POPULATION countries outside of China to amount spent on buying the list of marketplaces by traffic suffer with cases of COVID-19, consumer goods online is lower share, and Singapore is the only but has bounced back relatively than in some less developed Southeast Asian market where quickly. GDP was down by 5.8% markets, and why the percentage Alibaba – which owns Lazada 5.85M in 2020, but beat the official of total retail spend that is online – and Amazon are directly forecasts of a fall of between 6% is also low. competing. URBANISATION and 6.5%. Prior to the pandemic, online In Singapore, it is interesting to Though the smallest country sales were growing at a steady note that there is still slightly of those we have profiled, it double-digit rate and the more traffic to the US version 100% is strategically important for estimates for future growth have of Amazon, than the local .sg brands who want to sell online in been reduced slightly by the site. Given that around 30% MEDIAN AGE the region. Its six million citizens pandemic, but still come in at a of the population are expats – live in a relatively small urban compound annual growth rate of either working or studying in area, and the majority of its 7.7% to 2023. Singapore – it’s no surprise that inhabitants are middle class with cross-border ecommerce traffic 42 a very high per capita income. Singapore-headquartered is relatively high. Shopee is the biggest online It has a well-functioning postal shopping site by traffic. It 73% of online consumers in infrastructure and an address launched in 2015 and has used Singapore have shopped with and postcode system that makes this base to expand to the overseas sellers, and 35% of total home delivery relatively easy. other Southeast Asian markets online sales are cross-border. However, its high population it serves. The thinking is that density and excellent public Amazon may also use its base in Singapore has followed China’s transport means that it is easy Singapore to try to expand into lead with an enthusiastic to shop in stores, and many other markets in the region, with uptake of livestreaming, and Western brands have a physical Malaysia the most likely. both Shopee and Lazada offer retail presence. In addition, it has platforms that allow merchants the third oldest population in the to create livestreaming content. region. 73% of online consumers in Singapore have

Sources: shopped with overseas sellers, and 35% of United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, JP Morgan, CNBC, The Straits Times total online sales are cross-border

/17 KEY COUNTRIES

Singapore VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 5.85M $2BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 100% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $847

TOP 4 SHOPPING SITES 42 90% 3% BY TRAFFIC SHARE 14% 9%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 6%

Sources: United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb 68% 74% 5%

/18 KEY COUNTRIES

South South Korea’s economy has In March 2021, plans were Coupang’s focus on convenience, Korea fared relatively well through announced to invest US$267 by building out its own logistics 2020, with its GDP contracting million to speed up the growth and fulfilment infrastructure, POPULATION by only 1%, mainly driven by a of the country’s online retail has paid off. 70% of the South growth in exports of computing industry. In particular, 4000 Korean population live within products to parts of the world robots will be deployed to seven miles of a Coupang where demand increased as support ecommerce logistics logistics centre and it has built 51.3M more people needed to work and delivery robots will be AI technology to help it forecast from home. allowed to operate on sidewalks. demand; so the right products URBANISATION Drone delivery services are also are in the right place to be The country did well to contain expected to be tested in 2022. delivered as quickly as possible. its COVID-19 outbreak, and restrictions have been less strict The most interesting ecommerce Its delivery options – including a 82% than in other markets. The South site in South Korea is Coupang, next-day delivery before dawn Korean ecommerce market is which is considered to be South service – particularly appealed to MEDIAN AGE estimated to have grown by Korea’s answer to Amazon. shoppers during the pandemic. 22.3% in 2020; and could be Coupang is said to have grown worth as much as US$142 billion Launched in the market in 2010, its share of the South Korean by 2024. it was founded by a Harvard ecommerce market from 18.1% in 44 Business School dropout who 2019 to 24.6% in 2020. South Korean online shoppers saw a gap in the market to bring are extremely well connected; convenience to the nation’s Coupang recently completed an and spend the most online shoppers. IPO in the USA, following in the per person of all shoppers in footsteps of Alibaba. The sale of the region. For this reason, shares has raised a considerable the percentage of retail sales amount of money, and the that are online is already at company will be able to invest 16%. An investment push by in trying to further dominate the the government is designed to market. increase this further. The South Korean ecommerce market is estimated to have grown by 22.3% in

Sources: 2020; and could be worth as much as United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, Inside Retail Asia, Global Data, CNBC, The Independent US$142 billion by 2024

/19 KEY COUNTRIES

South VALUE OF MARKET FOR ONLINE CONSUMER Korea GOODS PURCHASES (USD) POPULATION $65BN 51.3M AVERAGE ANNUAL REVENUE PER ONLINE URBANISATION CONSUMER (USD)

INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE 82% OF TOTAL B2C RETAIL SPEND $2118 MEDIAN AGE 92% 16% TOP 4 SHOPPING SITES 44 BY TRAFFIC SHARE

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE

Sources: United Nations / World Bank / Statista / Global Web Index / Hootsuite / We Are Social / SimilarWeb 59% 80%

/20 KEY COUNTRIES

Thailand The Thai economy contracted Back in 2019, JP Morgan Global logistics businesses POPULATION by 6.1% in 2020, mainly due estimated that 50% of Thailand’s including UPS and FedEx have to a reduction in tourism and total ecommerce spend was also established operations in exports. However, private cross-border, indicating that the market, supporting home consumption fell by only half demand was running ahead of delivery services. 70M that figure, and GDP is expected supply in the market. to return to growth of 3.2% in Mobile is hugely important to URBANISATION 2021. The top three countries that the success of ecommerce in product was being purchased Thailand. As you can see on the Thailand is a mobile-first from were Japan, China and the following page, 82% of shoppers ecommerce market, and internet USA. This explains why Amazon. with access to the internet use 51% penetration is relatively high, com makes the list of the top mobile shopping apps, likely one largely driven through access shopping sites by traffic, though of the reasons that the mobile- MEDIAN AGE via mobile devices. Like many there is no local instance of the only marketplace Shopee has other developing markets in the marketplace available. gained traction in the market. region, high internet penetration rates don’t yet translate into The Thai government entered Thailand leads the region in 40 high ecommerce sales. into a strategic partnership Southeast Asia for the roll-out with Alibaba in 2018 to develop of 5G services, and this will However, there were positive the country’s ecommerce make shopping on mobile even growth signs prior to the capabilities, and recruit quicker and easier. At least one pandemic, with a compound Thai brands to sell on its mobile network operator has annual growth rate for marketplaces elsewhere in the already launched 5G services in ecommerce of 12.5% between world. 77 provinces across the country. 2019 and 2021. Included within this deal was Tied to the high use of mobile the creation of a Smart Digital apps is social media penetration Hub, utilising Alibaba’s data in general; the majority of Thai and logistics technologies to online shoppers have researched optimise the flow of goods products on social media before across Thailand’s borders. making purchases. Facebook already had 48 million users in 2019, and there are now estimated to be 55 million Sources: Mobile is hugely important to the success social media users in the United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, Statista, Alibaba, Nikkei, JP Morgan of ecommerce in Thailand country in total.

/21 KEY COUNTRIES

Thailand VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 70M $4BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 51% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $243

TOP 4 SHOPPING SITES 40 79% 1% BY TRAFFIC SHARE 31% 24%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 5%

Sources: United Nations / World Bank / Statista / Global Web Index / Hootsuite / We Are Social / SimilarWeb 58% 82% 2%

/22 KEY COUNTRIES

Vietnam Vietnam stands alone among Vietnam has a large population, Tiki claims to be the POPULATION countries in Asia Pacific in not and good internet penetration, biggest ecommerce site in reporting a single quarter of but the amount each consumer the country. Much like Amazon, economic contraction during spends on consumer goods it was founded as a bookselling 2020. Its economy continued to online is still relatively low, hence platform, before evolving 97.3M grow throughout the COVID-19 the low overall value of goods into an online marketplace pandemic as the Government sold online. This is expected to with fulfilment centres and its URBANISATION took quick actions to control the ramp up in the coming years. own logistics network. spread of the disease. Research from Google and its In 2017 it received financial Vietnamese GDP is estimated partners estimates that the backing from Chinese online 38% to have grown by 2.9% during value of the Vietnamese internet retailer JD. Third parties can sell 2020, driven by strong economy (which includes goods on Tiki, and it also has a cross- MEDIAN AGE manufacturing output and and services sold online) grew border selling programme for resilient exports; which more by 16% between 2019 and 2020. international brands. than compensated for the This measure is expected to decline in tourism Vietnam faced have a compound annual growth Meanwhile the other local 32 from closing its borders. rate of 29% between 2020 and competitor, Sendo, has both 2025. a general platform for third- The numbers for 2021 look even party sellers (many of whom are more promising, with a GDP There is competition in the individuals) and SenMall which growth forecast of 10%. The market between the two largest sells guaranteed authentic sales of consumer goods and regional Southeast Asian branded goods. services shrank year-on-year in ecommerce platforms – Shopee March and April 2020, but then and Lazada – and a couple Sendo has differentiated returned to growth for the rest of local competitors, Tiki and itself from the competition of the year. Sendo. by focusing on enabling ecommerce for citizens outside of Vietnam’s two largest cities Hanoi and Ho Chi Minh City.

Vietnamese GDP is estimated to In May 2020 it was reported have grown by 2.9% during 2020, driven that Tiki and Sendo had agreed to a merger, although this deal Sources: by strong manufacturing output and had fallen through by July of United Nations, World Bank, Statista, Global Web Index, Hootsuite, We Are Social, SimilarWeb, Sendo, CNBC, DealStreetAsia, Web Retailer resilient exports that year.

/23 KEY COUNTRIES

Vietnam VALUE OF MARKET FOR ONLINE CONSUMER POPULATION GOODS PURCHASES (USD) 97.3M $3BN URBANISATION AVERAGE ANNUAL REVENUE PER ONLINE CONSUMER (USD) 38% INTERNET PENETRATION B2C ECOMMERCE SPEND AS A PERCENTAGE OF TOTAL B2C RETAIL SPEND MEDIAN AGE $135

TOP 4 SHOPPING SITES 32 74% 1% BY TRAFFIC SHARE 29% 9.5%

PERCENTAGE OF INTERNET USERS THAT USE PERCENTAGE OF INTERNET USERS THAT SHOPPING APPS PURCHASED A PRODUCT ONLINE 9%

Sources: United Nations / World Bank / Statista / Global Web Index / Hootsuite / We Are Social / SimilarWeb 55% 75% 4%

/24 KEY MARKETPLACES Amazon Prime is available in all MARKETS markets alongside market- Australia, China, India, leading delivery timeframes. In Japan, Singapore Singapore, part of its selection TOP PRODUCT is sold cross-border from the US CATEGORIES through its International Store Video Games, Electronics, and Amazon also offers two- Home & Kitchen, Health & hour delivery on grocery items. Beauty, PC Software

In each APAC market, Amazon Amazon’s presence across the faces competition from APAC region is diverse, from other local and international Japan (the marketplace’s second competitors. In Japan, it has largest instance after the US site) fought hard against local player to Singapore, where it’s serving Rakuten to at least equal its a population of less than six market share. In Australia, it million. In between is Australia competes against increasingly which, while also a relatively strong omnichannel retailers small market by Amazon’s in addition to eBay and other standards, has grown quickly in local marketplaces. However, it the past year as Australia saw doubled annual sales in Australia Amazon’s push into China with It’s much more likely to adopt a an online sales boom during in 2020, with encouraging a local marketplace failed, cross-border model for further its particularly strict COVID indicators for both product as it could not compete with Asian expansion, at least as it lockdown. sales and subscription revenues the fast growth and business sizes markets up to assess their (including Prime). model developments of Alibaba potential for a local site with The marketplace operates in and JD.com. In 2019, Amazon the large investment in logistics basically the same way in every The big question now is whether announced the closure of its and fulfilment infrastructure that Asian market, with a mixture Amazon will try to push further Chinese marketplace and refocus such a move entails. of a wholesale model – where into Asia or leave the region’s on cross-border selling to Sources: Amazon buys stock from brands ecommerce markets to be further Chinese consumers. Australian Financial Review, CNBC, Amazon to sell directly to consumers – developed by local players. With and allowing third-parties to sell its base in Singapore, a push on the sites too. into Malaysia would make sense, but it’s likely to be cautious in entering other markets.

/25 KEY MARKETPLACES Amazon

AVERAGE MONTHLY AVERAGE TRAFFIC AVERAGE MONTHLY DEVICE DISTRIBUTION TRAFFIC GROWTH UNIQUE VISITORS (MOBILE VS DESKTOP)

AUSTRALIA 32M 55% 8M M: 39% D: 61%

CHINA 15M -41% 5M M: 46% D: 54%

INDIA 285M -8% 92M M: 35% D: 65%

JAPAN 579M 8% 59M M: 46% D: 54%

Sources: SINGAPORE Similar Web Dec 2019 – Dec 2020, 5M 95% 2M M: 49% D: 51% Statista

/26 KEY MARKETPLACES Coupang While 70% of Coupang merchants More recently, Coupang had allowed it to differentiate its offer MARKETS are small businesses, with a highly successful IPO in the and maximise efficiencies. South Korea revenues of $3 million a year USA, raising $4.6 billion. Its or less, the marketplace is also growth strategy for the next few To stay one step ahead of TOP PRODUCT a channel to market for larger years includes attracting more competitors, Coupang has also CATEGORIES international brands, including customers, increasing customer invested heavily in convenience, Baby, Vitamins & LEGO, Gap and Nature’s Way. It engagement and growing its particularly around speed of Supplements, Toys has both its own inventory as well product selection. delivery and ease of returns. Its & Games, Beauty & Consumer Electronics as allowing third parties to sell on delivery service, Rocket, provides the platform. It grew quickly in 2020, with same-day, next-day and next-day Coupang has firmly established 14.8 active customers reported before dawn delivery options. The itself in the lives of many Koreans; Coupang’s profile has increased in the final quarter of 2020, up before dawn option is designed becoming the biggest online significantly outside of South from 11.8 million in the same to ensure items are delivered to marketplace in the country and Korea in the last couple of quarter of 2019. Net revenue customers before they leave for its third-largest employer since it years. In late 2019, it launched per customer also increased in work or school. was founded in 2010. It delivers a global partner programme to this time, up by 59% to $256 for more than 2 million shipments help international brands enter Q4 2020. Much like Amazon, Customers can also return items each day, and added 25,000 to its South Korea using the platform; Coupang is focuses on offering with a simple system to request workforce in 2020. this included the opening of a broad selection at the lowest a return on an app; they then just international warehouses, such as prices available in the market. leave the package outside to be one in California where US brands It has built its own end-to-end picked up. No repackaging or can store goods to be sold cross- infrastructure including logistics returns labels are required. border. and technology, which has

AVERAGE MONTHLY AVERAGE TRAFFIC AVERAGE MONTHLY DEVICE DISTRIBUTION TRAFFIC GROWTH UNIQUE VISITORS (MOBILE VS DESKTOP)

SOUTH KOREA Sources: SimilarWeb Mar 2019-Mar 2020, 70M -20% 10M M: 34% D: 66% Coupang & Statista

/27 KEY MARKETPLACES JD.com its full year GMV rose by 25% to infrastructure. With more than store operation and provides MARKETS US$402 billion. 900 warehouses across China, customised suggestions for China more than 90% of orders are improvements. It sells everything from grocery delivered the same-day or TOP PRODUCT through to high end fashion next-day. JD.com has also JD Live – the company’s CATEGORIES online, and operates the offline enabled luxury brands to deliver livestreaming platform – was Consumer Electronics, supermarket chain SEVEN omnichannel services, including used with great effect through Automotive, Food & FRESH. In addition to its domestic click-and-collect from their the pandemic to allow brands to Beverages, Fashion & Apparel, Cosmetics & operations, it also operates Chinese stores. grow awareness and sales of their Personal Care JD Worldwide, a cross-border products. During 618 Festival, marketplace for brands and In 2020, JD extended its main JD hosted more than 300,000 JD.com is the second largest sellers based outside of China. shopping event 618 festival to last livestreaming sessions, and 167 ecommerce site in China by 18 days, and saw sales rise 33.6% brands achieved livestreaming market share, and after a few Unlike Tmall, JD has a mixed year on year. JD Worldwide saw sales of more than US$1.5 million bumpy years where it faced stiff business model, buying stock sales up 50% year on year for the off the back of livestreaming. competition from both Tmall from brands to sell directly – 11 days of its 11.11 promotion. and newer entrant Pinduoduo, it more than seven million SKUs Brands to have launched flagship has bounced back and achieved – as well as allowing sellers to JD has invested in training for stores on JD.com so far in 2021 outstanding results in 2020. open their own stores on its brands running stores on the JD range from luxury British shoe marketplace. Worldwide platform to help them brand John Lobb, to French With a 30.3% jump in annual maximise their sales, and in 2020 sporting goods retailer Decathlon active customers in 2020 – to JD has built an immensely also launched a tool that helps and also Starbucks. 472 million at the end of 2020 – impressive logistics and delivery to analyse problems with their

GROSS MERCHANDISE VALUE

$402BN AVERAGE MONTHLY AVERAGE TRAFFIC AVERAGE MONTHLY DEVICE DISTRIBUTION TRAFFIC GROWTH UNIQUE VISITORS (MOBILE VS DESKTOP)

Sources: CHINA SimilarWeb Dec 2019 – Dec 2020, 236M -30% 57M M: 51% D: 49% Statista & JD.com

/28 KEY MARKETPLACES Lazada During Alibaba’s 11.11 shopping MARKETS festival in November 2020, Indonesia, Malaysia, Lazada broke its own records, Philippines, Singapore, Thailand, Vietnam with 400,000 brands and sellers serving 40 million customers in TOP PRODUCT one day. CATEGORIES Baby, Consumer Much like its Alibaba stablemate Electronics, Fashion, Beauty, Home Appliances Tmall, Lazada has been quick to adapt to new ways of selling, Alibaba-backed Lazada operates with its livestreaming platform in six APAC markets, and offers LazLive. During 11.11 in 2020, 11 a route to market for both million livestreaming views were local small and medium-sized recorded and Lazada suggests sellers as well as global brands. a strong uptick in sales from It has more than 100 million this activity. It also offers games monthly active users, and saw on the platform as part of its LazMall reportedly has 70 Nike is one such brand to launch order volumes double in 2020 “shoppertainment” strategy million unique users buying from a LazMall flagship store in 2020, compared to the previous year. to engage the region’s online 18,000 brands; and regularly which it sees as complementary population, many of whom are innovates to ensure that the to its direct-to-consumer website It believes it can continue on relatively new to the internet. customer experience keeps them and local retail partners. Nike has a sharp growth trajectory as engaged and buying. LazMall made its range available in five while 70% of South East Asia’s Though the majority of brands offers customers a 15-day markets and is using Lazada’s consumers have internet access, and sellers are smaller local SMEs, returns policy and guarantees delivery infrastructure to fulfil online sales penetration is still Lazada is very actively courting the authenticity of product orders. low, and spending power is rising large international brands looking – which is crucial in a region Sources: as the middle class population for a route to market. where counterfeit products are Lazada doubles in size by 2030. common. Its premium platform for brand owners, retailers and authorised distributors to sell on – LazMall – is actively recruiting brands already selling on Tmall and Tmall Global to list their products on the site

/29 KEY MARKETPLACES Lazada

AVERAGE MONTHLY AVERAGE TRAFFIC AVERAGE MONTHLY DEVICE DISTRIBUTION TRAFFIC GROWTH UNIQUE VISITORS (MOBILE VS DESKTOP)

INDONESIA 31M 19% 12M M: 81% D: 19%

MALAYSIA 14M -22% 4M M: 42% D: 58%

PHILIPPINES 36M 4% 10M M: 57% D: 43%

SINGAPORE 8M -18% 2M M: 39% D: 61%

THAILAND 36M 1% 8M M: 48% D: 52%

Sources: VIETNAM Similar Web Dec 2019 – Dec 2020, 20M -24% 7M M: 60% D: 40% Statista

/30 KEY MARKETPLACES Rakuten In 2020, Ichiba reported an Rakuten believes that this shift opt-in to its uniform shipping MARKETS annual GMV of more than – and further strong ecommerce programme; previously merchants Japan, Taiwan 3 trillion Yen (US$28 billion). It has growth – is possible as Japan still set their own shipping costs and more than 100 million users and has a relatively small percentage they were not transparent for TOP PRODUCT 50,000 sellers on the platform, of retail sales online compared consumers. CATEGORIES and claims a 27% share of total to China and other Western Electronics, Home & Japanese ecommerce sales. countries. Brands need either a business Outdoor, Fashion & entity in Japan or to work with Apparel, Beauty & Personal The marketplace achieved One of the hurdles to growth that a trade partner to create a store Care, Sports & Fitness strong sales through 2020, after Rakuten has had to overcome on the marketplace. Rakuten several years when its growth is logistics capacity in Japan. describes itself as shop-centric, Japan’s home-grown marketplace had slowed, through both new For this reason, the business and gives more flexibility to Rakuten Ichiba is a third-party and returning customers. They has invested in its own logistics brands over customer experience, only marketplace, and does not shopped there when physical infrastructure – particularly for last including how their store and directly sell any product itself. retail was closed in Japan, and mile – and it recently announced a product pages look and feel. Its parent company has a strong kept on coming back even partnership with Japan Post. grip on Japanese consumers, when it had reopened. Rakuten A monthly membership fee is providing everything from reported a GMV that was up by It has also simplified shipping charged in addition to the sales banking to communications 48% year on year between April costs for consumers by commission, and digital marketing services. and June 2020. encouraging merchants to on the platform is also possible.

GROSS MERCHANDISE VALUE AVERAGE MONTHLY AVERAGE TRAFFIC AVERAGE MONTHLY DEVICE DISTRIBUTION TRAFFIC GROWTH UNIQUE VISITORS (MOBILE VS DESKTOP) $28BN JAPAN 542M 19.5% 58M M: 68% D: 32%

Sources: TAIWAN Similar Web Sept 2019 – Sept 2020, 7M 2% 3M M: 55% D: 45% Rakuten, Statista

/31 KEY MARKETPLACES Shopee Mall Sellers can also use the MARKETS platform’s premium marketing Indonesia, Malaysia, tools and have access to Mall Philippines, Singapore, Taiwan, Thailand, Vietnam campaigns and vouchers which the platform uses to drive TOP PRODUCT demand. Sellers are asked to CATEGORIES maintain good account health Home Appliances, which is based on four factors: Baby, Mobile Phone & accessories, Health & shipping orders on time and in Beauty good condition, customer service standards, customer reviews South East Asian marketplace and following all guidelines on Shopee offers commission-free listings. selling for small traders who want to sell on the marketplace. Much like Tmall, Shopee offers multiple ad types to help drive For brand owners and their traffic to your listings, keyword The platform also encourages Shopee LIVE is an in-app authorised distributors there is ads, discovery ads and Shop social selling through the livestreaming platform that a premium option – Shopee Mall ads; the last of which promote Shopee social feed and Shopee allows brands to broadcast to Seller – where your authenticity your store rather than specific LIVE. Brands can create a Story their customers, who can make is validated by Shopee and products at the top of search (similar to an Instagram story) purchases and ask questions of commission fees of between results pages. A marketing to share with their followers that the brand in real-time. 2% and 5% depending on the messaging tool – Chat Broadcast is visible on their feed for 24 product category. – allows brands to bulk message hours and should be designed to Current and future scheduled customised recipient groups encourage viewer interaction. livestreams are accessible to It claims to be the fastest within the app and communicate customers via a Shopee LIVE growing online marketplace with them if they respond. tab on the brand’s store page. in South East Asia and is the Livestreams can also be made number one shopping app in the available for replay on this tab so region based on app downloads that the content can be shared and users. Launched in 2015 in Shopee claims to be the fastest growing with a wider audience. Singapore, it now also services online marketplace in South East Asia and Malaysia, Thailand, Indonesia, is the number one shopping app in the Vietnam, the Philippines and Sources: Taiwan. region based on app downloads and users Shopee

/32 KEY MARKETPLACES Shopee

GROSS MERCHANDISE VALUE

AVERAGE MONTHLY AVERAGE TRAFFIC AVERAGE MONTHLY DEVICE DISTRIBUTION TRAFFIC GROWTH UNIQUE VISITORS (MOBILE VS DESKTOP) $35.4BN

INDONESIA 103M 69% 32M M: 74% D: 26%

MALAYSIA 37M 67% 7M M: 38% D: 62%

PHILIPPINES 37M 107% 11M M: 54% D: 46%

SINGAPORE 10M 144% 3M M: 50% D: 50%

TAIWAN 56M 53% 9M M: 37% D: 63%

THAILAND 43M 82% 7M M: 42% D: 58%

Sources: VIETNAM Statista , Similar Web Sept 2019 – 55M 79% 12M M: 46% D: 54% Sept 2020

/33 KEY MARKETPLACES Tmall & Tmall Global With 779 million active annual Livestreaming became MARKETS consumers in China in 2020, particularly important through China Alibaba has substantially more lockdown, for brands to reach reach than its nearest competitor customers when physical retail TOP PRODUCT JD.com. was closed, and its popularity ACTIVE ANNUAL CATEGORIES has maintained as restrictions CONSUMERS Fashion & Apparel, Baby, Only a subset of users shop on were lifted. Alibaba’s Taobao Live Beauty & Personal Care, Tmall Global, but it attracts more livestreaming platform generated Consumer Electronics, CHINA Vitamins & Supplements affluent consumers who are most US$61.5 billion in sales in 2020. 779M interested in buying Western Tmall’s parent company products. To ensure its best ever result, Alibaba has been able to retain Alibaba’s flagship promotional the top position for share of Tmall has worked hard to add event – 11.11, – was extended to 11 Chinese ecommerce sales brands and merchants to the days in 2020. Spreading out the with its constant focus on cross-border platform as a promotional event put less strain GROSS MERCHANDISE innovation and improvement. pull for more users, and during on logistics functions to get VALUE Tmall achieved GMV growth of 2020 the number trading on the the orders sent out. More than 19% year-on-year in its most platform increased by 60%. 250,000 brands participated $945BN important financial quarter of generating a GMV of US$74 October to December, which Alibaba has created warehousing billion across the 11 days, up 26% includes 11.11 (Singles’ Day). in Western markets so brands on the same days in 2019. trading cross-border can store The domestic and cross-border their product there – Tmall versions of Tmall are both exports the product to China available to Western brands. when the order is placed. Delivery Those with a business entity timeframes should be shorter in China can use the domestic than if the brand is shipping version of the marketplace. orders from its home market to Chinese consumers itself. Those without a local entity are encouraged to use Tmall Global Brands who create a store on and trade cross-border. either platform are encouraged to invest in Tmall’s on-platform marketing as well as off-platform Sources: marketing to drive their sales. Similar Web Sept 2019 – Sept 2020, Alibaba, Statista, Tmall

/34 ANALYSIS The importance of social selling in APAC We’ve successfully used livestreaming platforms to engage and convert customers in China, and the same techniques can work in South East Asia too.

Customer acquisition marketing livestreaming platforms and costs can be high when you first reported uplifts in usage during enter a new market. For China in 2020; particularly during particular, we always recommend lockdowns when stores were using social channels to maximise closed. Other social platforms a brand’s discoverability, as well are also allowing shoppable as advertising on marketplaces livestreams – including Douyin such as Tmall. Livestreaming is (Tiktok), WeChat and RED. one way to achieve this. Below we outline how that are dedicated to your brand. drive thousands of purchases Chinese and South East Asian livestreaming works to help This can help you to educate and during the stream. consumers are among the your brand to engage and retain convert consumers who already world’s most prolific viewers customers. have awareness of your brand. Meanwhile, micro-influencers – of livestreamed content, and with expertise in your category this includes ecommerce Going live You may also work with – can be an effective way of livestreams. Forbes cites figures You can use livestreaming influencers (called KOLs or key engaging smaller audiences suggesting that 9% of all Chinese content to promote your opinion leaders) to showcase who are most likely to buy your ecommerce sales were the result products in several ways; both your products to their followers products. They may feature your of livestreaming in 2020, more to engage those who are already and extend your reach. products alongside other brands’ than double the 2019 figure; with aware of your brand, and also to items on a session, or create a 265 million consumers watching help consumers discover your While the most well-known session that is dedicated to your ecommerce livestreams in March brand and products for the first KOLs can have millions of products. 2020. time. followers they are also extremely expensive. If you are prepared to While the production values of Livestreaming has been adopted Firstly, your trade partner should pay for their involvement, then the content may not seem high by marketplaces across the have their own presenters on you can work with more widely compared to Western standards region. Tmall, JD.com, Lazada staff, who can present your known KOLs to feature your of “tv shopping”, the results and Shopee have all developed products on livestream shows products on a livestream and speak for themselves.

/35 ANALYSIS Selling cross-border into South East Asia

Cross-Border Selling However, be aware that you Many of the marketplaces will still need a local trade operating in the region partner, who will deal with the encourage brands to sell cross- marketplace and act as your border, to give their customers representative, as well as taking access to a wider range of care of aspects of the operation products. There are several that need to be conduced in the benefits for brands, particularly local language, such as product when they are first testing listings and customer service. and building demand for their products in a new market. No local labelling As the product is being sold Below we outline some of the from a different market as a benefits and challenges of cross- cross-border purchase then there border selling. is no requirement to re-label goods in the local language. This No local entity required can also allow you to side-step Setting up a business in markets local product standards – for pool for cross-border orders. infrastructure to get products such as Japan or China can example, make-up must be This could be nearshore, such to China quickly once orders are take months, requires much tested on animals in China, and as in Hong Kong for orders to placed. paperwork and may also so many cosmetics brands have China, to minimise delivery necessitate having a national chosen to sell cross-border to times. Or you could fulfil cross- Pricing of the country as one of the avoid this. border orders from your main There are additional costs local company’s directors. stock pool in the West. There for selling cross-border, such Cross-border selling removes While local labels aren’t required, are benefits of not ring-fencing as higher delivery costs, and this barrier to entry. As long we would still recommend stock, but the main downside potentially sales tax or duties as you can receive payment that product descriptions are is that orders could take one to on personal imports that will for orders in the currency of properly translated in listings and two weeks to be received. determine your pricing strategy. the country you are selling to information on sizes, weights and Consumers expect higher prices then you will be able to create volumes made clear. Alibaba has tried to solve this than the West in markets such a store on the cross-border problem, allowing brands to as Japan. Pricing analysis by platform of marketplaces such Stock pool decisions store their goods in its Western market is crucial to optimise as Tmall, JD.com, Rakuten or You must decide where you warehouses and then using your pricing strategy for the Lazada. are going to locate your stock its sophisticated logistics region.

/36 ANALYSIS Do you need D2C in APAC?

Though marketplaces are the biggest online sales channels in some of the region’s markets, D2C still has a role if you want to expand sales.

Marketplaces can help you Creating a D2C site for Australia to get a foot in the door of a is relatively easy as it will be country you’ve not sold to direct in English but, if you want it before, particularly if you want to be fully localised, then you to start out by selling cross- will still need to account for border. However, a D2C website local language, trends and the can help you to fully exploit the difference in seasons compared opportunities in a market. to the Northern hemisphere.

The business case will differ by China A D2C site also allows you It has a relatively large market, and below we outline the If you are a premium or luxury to offer additional value add population, who are digital argument for some key countries brand with limited distribution services and omnichannel savvy and are interested in in the region. in the market, then we would features, such as click-and- purchasing Western brands. recommend considering a collect if you have stores in However, there is relatively low Australia Chinese language web presence China. proficiency in English, and so This is the one market in the to complement your marketplace a Japanese website has been region where a marketplace-first stores. This will deliver a halo A Chinese D2C site should necessary rather than expecting approach may not be the best effect to your total sales in the be thought of as a marketing that consumers will make cross- option. market. channel as much as a sales border purchases from brands’ channel, and may not be American, UK or Australian Omnichannel retail is extremely A D2C site will both give profitable in its own right. websites in English. sophisticated, and marketplaces confidence to Chinese customers do not have a commanding share buying your goods for the first Japan Japan still has a relatively low of online sales (though their time (even if they end up buying Japan is one of the markets in ecommerce penetration rate, and penetration is growing). on a marketplace) and be a place Asia where brands have been so a D2C site is a good idea to where your most loyal brand fans willing to invest in a localised inform and engage consumers prefer to transact. D2C website for a combination if you also have offline sales of reasons. channels in the market.

/37 About Pattern

Pattern is the ecommerce partner to a Our strategy consultants can help your brand growing number of global consumer brands. to identify ecommerce opportunities and Contact us now to discuss how We are a Tmall four-star Trade Partner, as well build a market entry strategy. or audit your we could help to grow your Asia as being one of the biggest Amazon sellers in current presence and create a roadmap for Pacific online sales. the world. growth. Then we help you deliver on those plans. For assistance with selling online in In addition to our thriving businesses in North China, Japan and South East Asia: America and EMEA, we provide online routes This can include becoming your authorised to market and trade partner services for partner for marketplaces such as Tmall, [email protected] Western brands in China, Japan, Australia and JD.com, Amazon and Lazada. across South East Asia. For assistance with Unlike other trade partners in the region, we selling online in Australia: Whether you want to enter new Asia Pacific offer both a service and stock-buy model. In [email protected] markets online or grow your existing business both cases we will work closely with you to there, we can support you in achieving your build demand for your products and simplify For assistance with selling online goals. marketplace selling. anywhere else in the World: [email protected]

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