The Future of Commerce has ArrivedUnderstanding the Asian ConsumerIndonesia – 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
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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 ConsumersAble To Purchase Items Beyond Their
Subsistence For First Time
Greater Number Of Wealthier Consumers
Emerging In
New Target CitiesOutside Asean’s Tier 1 Cities
38 MillionNewly Affluent
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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 ecosystemPayments/delivery/Infrastructure
Highly evolved consumer with sophisticated demandsReadiness to embrace technology interventions in lives
Social aspect of shoppingEntertainment & Family bonding
Comfortability with the online ecosystemTrust and reliability. Quality of products is an issue across all
Intensive research before shopping: consumer awarenessResearch limited to price and deals in Indonesia & Singapore
Key technology adopterse.g. Rise of m-commerce
Source: Accenture Research: APAC eCommerce Digital Research
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Owing to a rapidly growing consuming class, Indonesia
35.7 52.7
2014 2019
9
CAGR 14-19Asia
CAGR 14-19World
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 14-19Indonesia
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 GrowthIndonesia v/s Asia v/sWorld
~2X GrowthIndonesia 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
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10
With high mobile & internet penetration, Indonesia is on track to become a potential eCommerce hub; Poised to grow 5X between 2014-18
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$1.3 Bn
2015
2020
Indonesia eCommerce Retail Sales: All Categories* (USD Bn)
~6X $7.9 Bn
Significantgrowth 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 ?
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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 teacherMother of two kids
Source: Online communities research – by Accenture & IPSOS; APAC Expert Interviews; Accenture Research: Accenture eCommerce Digital Research,
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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
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Might ofMicro-moments
Might ofMicro-moments
Might ofMicro-moments
Might ofMicro-moments
Might ofMicro-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
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The Asian Consumers Expectation
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The Asian Expectations
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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 nowto capture them – or risk ceding control to the digital commerce players that have enabled the region-wide upsurge in digital commerce.
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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
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I wish… I had aSMART 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
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22
CPGs need to relook at their overall digital commerce strategy and integrate itwith their strategic vision
Imperatives for Success: Define Digital Commerce Strategy
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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 crossborder ecommerce
• Invest in brand engagement:integrating online& offline to lead the consumer to purchase online seamlessly
• Integration with digitalto source ideas and test product innovation
• Digitize supplychain to “delight”at fulfillment
• Leverage big datafor efficient andeffective 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?
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•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
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It’s the Micro Moments
Deliver unique experiences that delight and enable loyalty, seamlessly, NOW
Enable the Purchasing DecisionDeliver the best products to consumers – before they’ve even asked for it
Be Omni-Channel
Stay connectedand on, always
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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
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27
Year 2020: Consumers want to be delighted.....want everything in a MICROMOMENT
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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
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How Aminah lives in 2025 ???
Truly connected livesAminah 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 shoppingShop 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