eCommerce Market Entry Strategies to Successfully Launch your eCommerce Business Across Asia-Pacific

Marcelo Wesseler, CEO, SingPost eCommerce Pranay Mehra, Vice President, SingPost eCommerce

AGENDA

• Overview

• Market entry success factors & considerations

1. eCommerce Basics?

2. Which markets should you enter?

3. How to size your opportunity and create a business case?

4. What are the market entry options & platforms?

5. How to choose the right payment options & prevent fraud?

6. What about logistics, customs, duties, & legal framework?

7. How do you market your site & drive traffic?

• Summary

• Q&A

$3 billion market cap.

A+ Credit Rating*

Full Service eCommerce

in Asia Pacific

Localized front end,

payments, order & store

management

Logistics

Centers 15 3 Call

Centers 8 Languages

& Dialects

600+ eCommerce Clients

eCOMMERCE SUCCESS FACTORS

• Keep It Simple and Measure Daily

• Revenue = Visitors * Conversion * AOV

• Success =

- EBIT or Net Margin

- Customer Lifetime Value > CAC

- GM after logistics & marketing spend

- Owning customer data

CUSTOMER EXAMPLES

WHICH MARKETS SHOULD YOU ENTER?

WHICH MARKETS SHOULD YOU ENTER?

MAJORITY OF US SITES ARE LEAPFROGGING

TO ASIA PACIFIC WITH ECOMMERCE

HOW TO SIZE YOUR OPPORTUNITY?

Pragmatic sizing approach:

• Your international traffic * 5

• Consider brand / product restrictions

• Regulatory approvals

• Local Keyword analysis

• If you have offline sales, use % of retail

Korea ~15%

UK ~10%

US ~9%

China ~9%

Australia ~6%

Southeast Asia ~2%

IMPACT OF CUSTOMER EXPERIENCE ON

REVENUE

Don’t forget: success = positive GM after logistics & marketing cost! *include customer care cost in logistics cost

SOURCE: McKinsey & Company, SP eCommerce Research

US SITES WITH ECOMMERCE PRESENCE IN ASIA

CAN IMPROVE CUSTOMER EXPERIENCE

Best addressed through setting up a localized eCommerce operation in-house or outsourcing to a regional end-to-end provider.

SOURCE: McKinsey & Company, SP eCommerce Research

Option 1:

• Separate international checkout

• Vendor buys on consumer’s behalf

Option 2:

• Outsource via vendor-branded

checkout with fraud protection;

• Careful! Keep customer ownership

• In-house local team

• Language

• Marketing

• Free local shipping

• Free local returns

• Omni-channel enablement,

e.g. fulfill from stores

• Domain/ Language

• Payments

• Fast regional shipping

• Local returns

• Hybrid models (drop ship,

fulfillment by market)

• Franchise option for brands

WHAT ARE THE MARKET

ENTRY OPTIONS & PLATFORMS?

WHAT ABOUT LOGISTICS, DUTIES & LEGAL FRAMEWORK?

De Minimis (in USD) – The challenge with custom duties.

Other regulatory challenges…

• Complex rules (e.g. import

approvals for many commodities

like books, etc)

• Valuation concerns

• Uneven application of rules

• Payment options & fraud

• Requirement to setup legal entities

to trade in local currency and

obtain domain

• Foreign ownership restrictions

SOURCE: Singapore Post Research

HOW DO YOU MARKET YOUR SITE & DRIVE TRAFFIC?

Seasonal Marketing Spend

Marketing Costs Increasing

Rural Gold Mines equals High CLV

Focus on Organic & Brand Traffic

SUMMARY

• Free, fast shipping & local returns

• Test the waters before you jump

• Carefully select markets and platform

• Know the regulatory & product restrictions

• Marketing will be your biggest challenge

THANK

YOU Feel free to get in touch with us:

MARCELO

marcelowesseler@singpost.com

PRANAY

pranay@singpost.com