e-commerce trend

Prepared for: PT Darya-Varia Laboratoria Date: June 2016

Prepared for:

Prepared by: Spire Research & Consulting

Presented on: 15 June 2016

Spire Presentation:E-Commerce@ Health and Beauty

Workshop Briefing

PT. Darya-Varia Laboratoria Tbk

Prepared for: PT Darya-Varia Laboratoria Date: January 2016

TABLE OF CONTENT

1 Regional E-Commerce Trends

2Indonesia E-Commerce Trends:Opportunities for Health and Beauty Products

3 Challenges to Enter the Market:Key Questions for Darya Varia

E-Commerce Trends


Key TrendsIndonesia Potential Growth on Modern TradeTraditional Retail Modern RetailSupermarket Convenience StoresConventional E-Commerce

Prepared for: PT Darya-Varia Laboratoria Date: June 2016Source: Tech in Asia, eMarketer, Spire Analysis

The Growth of Internet in South East Asia

Malaysia Indonesia Thailand Singapore Vietnam Philippines

20.1

74.6

17.6 9.1 32.4 34.8

67

29.8 26.4

104.2

36 35

Internet Users in South East Asia (2013)

Internet Users (in million) Internet Penetration (%)

2010 2011 2012 2013 2014 2015 2016

42.255.2 61.1

74.6 83.693.4

102.8

8.0 13.8 24.2 31.7 37.62 45.36 53.6618.98 24.9939.62 42.49 45.15 48.56 52.2

Indonesia Internet User & Growth

Internet User (million) Netizens (in million) Netizens Proportion (%)


Indonesia E – Commerce compared with other countries

Online retail sales as a proportion of overall retail sales are growing, as are the numbers of online digital buyers.

Alibaba to purchase Lazada Indonesia for US$ 1Billion.

Source: Bank of America Merrill Lynch, “ Consumer Products – Indonesia, Bricks and Clicks: e – com an opportunity for offline retailers and telcos”, November 2015Note: CAGR 2015 – 2020 total e – commerce market size

E – commerce growth to outspace other major countries

Indonesia = 49%India = 34%

China = 21%USA = 14%


TABLE OF CONTENT




Modern Trade Trends


Indonesia E-Commerce Market

Source: Ministry of Informatics, Spire Analysis

Indonesian e-Commerce market value is forecasted to grow more than 10 times in just 7 years, with CAGR at 48.75% resulting in projected

market size of US$130 Billion.

2014 2016 2020F0

20

40

60

80

100

120

140

1230

130

Indonesia Ecommerce Market DevelopmentUS $ Billion

CAGR 48.75

%

2010 2011 2012 2013 2014 2015

3,119.304,056.105,442.00

7,867.60

13,370.90

22,107.80

0.00 40.60 272.10 786.803,342.70

7,737.70

Indonesia Online Retails Value excluding Sales Tax in IDR bil-

lion

Internet Retailing Mobile Internet Retailing

Source: Euromonitor Spire Analysis


20%

Conventional online shopping sites

26.4%

Social media

platform

26.6%

Online forums or classified sites

27%

Messenger groups

2015

2014 20

16

201 34.6

million

5.9 million

7.4 million

8.7 million

Growth of Online Shoppers in Indonesia (million users)

E-commerce Development in Indonesia

Preferred e-commerce Channel for Online Shopping

Source: Tech in Asia, Statista, Economist Intelligence Unit

2013335

1.8

2014328

2.6

2015377

3.56

2016469

4.49

Online Sales vs Retail Sales in Indonesia (billion US$)

Percentage of online sales in total retail sales Retail Sales Online sales

0.6% 0.8% 0.9% 1%


Korea

Austra

lia

New Zea

land

Taiw

an

Singap

ore

China

Indon

esia HK

Philipp

ines

Thail

and

53%

25%21%

8% 6% 5% 4% 3% 4% 3%

51%

29%25%

29%

15% 12%

43%

6%< 1%

10%

% of Shoppers that Visit Retailer Websites Prior to Purchase% of retailer website visitors that buy online for groceries (consumer goods, including foods, personal cares)

E-Commerce Shopper Trend in Asia Pacific

FMCG retailers has started to invest in E-commerce.In Korea, more than 50% of the shoppers that visit retailers website, also purchase the products online.However, in Indonesia, with similar percentage of online shopper, only 4% has actually visited retailers website prior conduct purchase behavior.

Sources: 2015 Retail Innovation Summit


Who Shops Online?

99%Have shops online before

vs80%

Who shops more often?

Slightly

often

Veryoften

Shops more efficiently?

7/10 4/10

Source: Spire Online Survey

41-50 years old

35-40 years old

28-34 years old

21-27 years old

16-20 years old

< 15 years old

11.36%

6.82%

29.55%

51.14%

1.14%

0.10%

Shoppers Age Breakdown

Prepared for: PT Darya-Varia Laboratoria Date: June 2016Sources: Spire Survey

Spire Online Behavior Survey

Products Categories Purchase via Online Channel in Indonesia


TABLE OF CONTENT




Modern Trade Trends


What’s next?

Is E-commerce suitable for beauty and health supplement market in Indonesia?

Which business model is the best fit?

What are the risks? The challenge? The opportunities?

Prepared for: PT Darya-Varia Laboratoria Date: June 2016Sources: Spire, 2015 Retail Innovation Summit

New Wave of Business Models

User OfflineBusiness

Demand Value

The O2O model

Combine the best of online and offline worldIncrease the profit in both world

Link the online and offline

Offline Online Ultimate

Solution

Create the ultimate hands on experience

Improve quality and monitor your online reviews

Support “buy online and pick up at a store” or vice versa

Drop off point

Pick up point

Seller

Buyer

O2O Case Study


The OMNI model

New Wave of Business Models

STARBUCKS

DISNEY

Mobile Payment and Reward Experience

Sample Case Study

Multi Entertainment Experience


What are the challenges?

3. What?

2. Who?

6. When?

4. Where

1. Why?

5. How?

Great Opportunities Reflected by present trends

Any People & Netizen

Health & Beauty ProductsShare of trade in Online at

16%

Should be at 2015

E-CommerceThe O2O? The Omni?

E-Commerce Platforms:Website or Mobile Apps?B2B or B2C? Market place or Online Store?


What are the challenges?

What

Who

When

Where

Why?

How

MarketResearch


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e-commerce trend

Healthcare