1. Opportunities and Challenges
Indonesian E-Tourism Summit 2011
Lim Lai Hock
Director, Online Segment and Solutions
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2. The world’s largest Internet user base
Source: Internet World Stats
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3. The world’s fastest-growing middle-class
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4. Forecasted
Internet Internet
Internet Internet Users Internet Users
Penetration User
Country Penetration in 2009 by end of 2010
Rate in 2011 Growth
Rate (2009) (Million) (Millions)
(Forecast) (2009 to
2010)*
China 29% 32% 384 420 9%
Japan 75% 78% 96 99 3%
India 7% 8% 81 89 10%
Korea 71% 81% 37 49 30%
Indonesia 13% 13% 30 31 3%
Philippines 25% 30% 24 30 24%
Australia
Indonesia’s Internet penetration rate is
78% 81% 17 18 7%
Thailand 25% 26% 16 18 9%
discouraging
Hong Kong 68% 69% 5 5 4%
Singapore 73% 78% 3.5 3.7 9%
… until you compare it with India
Source: Internet World Stats, *Other Internet Statistics Websites (CNIC, ITU, NIIDA) and EDC Analysis
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5. Business fundamentals are
unchanged
Same challenges apply
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6. Know the customers
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7. Why do consumers shop online?
88%
Being able to shop at
any time
82%
83%
Get the best Top Being able to
prices three shop easily
Reasons for
shopping
online
Source: Visa e-Commerce Tracking Survey 08
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8. How loyal are online shoppers?
28% 30%
Yes
Sometimes
No
42% You can increase
retention rate to 72%
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9. What drive away consumers?
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10. It’s not just about who holds the mouse.
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11. Know the risks
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12. Travel is hardest hit by online fraud
Fraud Spend Penetration
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13. Some e-commerce myths
• Myth: All payment partners have same
capability, choose the one with lowest fees &
MDR
• Myth: Payment partner will absorb all risks
so I can maximize my profit
• Myth: There’s ZERO risk doing business
with us
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14. Hard facts about Online Fraud Risks
• Airlines (Source: CyberSource)
– US$5.5 Billion in lost sales volume
– US$1.5 Billion written off, for payment fraud (~1.2%
of total revenue)
• Online Merchants (Source: Sage Pay)
– 68%: Payment fraud most daunting to manage
– 60%: Unaware if their provider is Bank Certified, PCI
Compliant, and 3D Secure Certified
• As a result, the merchant is non-compliant and liable
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15. More hard facts
• Online travel merchants
• fraud losses between 0.2% to 5% of top-line
revenue
• Non-compliance of PCI can attract fines of
10K-20K euro from Visa and Mastercard
• Online payment is strategic to online business
model
 Unanimously voted by leading online merchants
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16. Build and maintain
a competitive advantage
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17. Scalability matters … more than ever!
• Traditional business growth potential is
linearly constrained by your resources
• Online business growth potential can grow
exponentially practically overnight
• Can existing business process cope if
business volume doubled overnight?
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18. Where can you drive more efficiency?
18%
Engage
Book
Finalize
47%
Finishing
18% Ticketing
Others
7%
7%
3%
Average from a set of travel agencies around world and within Asia
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19. Drive online as a profitable business
As much as 30% of total ticket
volume can be lost due to human
errors (eg ADMs)
Online business profitability should be
managed even more aggressively than
your traditional business
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20. Thank You
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