Future of commerce: Understanding Southeast Asian consumers- Accenture

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

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

10
With high mobile & internet penetration, Indonesia is on track to become
a potential eCommerce hub; Poised to grow 5X between 2014-18
$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 ?

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,

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
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

The Asian Consumers Expectation

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
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

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
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?
•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
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

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

27
Year 2020: Consumers want to be delighted.....want everything in a MICROMOMENT
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?

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
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

Future of commerce: Understanding Southeast Asian consumers- Accenture

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