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E-Commerce: Crossing the Borders at the Click of a Mouse

E-Commerce: Crossing the Borders at the Click of a Mouse. Li Jiming Deputy Director General of Yunnan Department of Commerce PRC, June 2011. Yunnan International E-commerce Company. The US Is No Longer the Center of the Online Universe. Source: comScore World Metrix, October 2010.

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E-Commerce: Crossing the Borders at the Click of a Mouse

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  1. E-Commerce:Crossing the Bordersat the Click of a Mouse Li Jiming Deputy Director General of Yunnan Department of Commerce PRC, June 2011 Yunnan International E-commerce Company

  2. The US Is No Longer the Center of the Online Universe Source: comScore World Metrix, October 2010

  3. U.S. E-Commerce Dollar Sales Growth ($ Billions) Source: comScore e-Commerce Measurement

  4. E-Commerce Growth Exceeds Growth of Total Retail

  5. Lower Income Segment is the Strongest Rebound e-Commerce Sales by Income Segment ($ Billions) Growth vs. YA Source: comScore e-Commerce Measurement

  6. Distribution of Internet Users, Age 15+ Source: comScore Media Metrix, December 2010

  7. Growth of Mobile Market Enablers in EU5 Source:comScore MobiLens, Dec-2009 -Dec-2010 (3 Month Average)

  8. In Comparison: % Adults in EU Making Online Purchases

  9. South Korea: E-Commerce • South Korea is the third largest eCommerce market in the Asia-Pacific region, after Japan and China • On the global stage, it has higher online penetration, broadband penetration, and mobile penetration than the United States – and is recognized as a leader in mobile payments and virtual goods

  10. South Korea: E-Commerce • The number of Internet users in South Korea reached 36 million in 2009, accounting for 74% of the total population • E-Commerce growth in South Korea is higher than expected - projected to reach approximately USD 17 billion in 2009 • Payment cards are the dominant online payment tender in South Korea and are used for approximately two-thirds of online purchases

  11. E-Commerce Takes Off in Japan • Revenues from e-commerce in Japan have expanded every year by around 17% since 2005, and are expected to grow at nearly 10% a year for the next five years

  12. Online Audience Sizes in Southeast Asia Source: comScore Media Metrix, December 2009 to December 2010

  13. Emerging Internet Markets in Southeast Asia Skew Very Young Source: comScore Media Metrix, December 2009 to December 2010

  14. Online Retail is Growing Rapidly in Southeast Asia Source: comScore Media Metrix, December 2009 to December 2010

  15. Top Retail Sites are Almost Exclusively Local Unique Visitors (000) Top 5 Retail Sites per Country

  16. Half of Asia Internet Users Are in China • Until the end of 2010, the number of internet users in China has taken up 23.2% of that in the world, and 55.4% of that in Asia

  17. E-Commerce: Increased Retail Sales Share

  18. Fragmented Market Grows Online Shopping • Unlike in the US, the traditional retail market in China is highly fragmented

  19. China Online Retailers Stand Out • E-commerce saves online retailers store operating costs, lowers their marketing expenses, and improves their inventory turnover, allowing them to offer competitive prices • Chinese consumers often enjoy 30-40% discounts when shopping online, relative to shopping at the traditional retail stores • Most online retailers offer free door-to-door delivery within days

  20. ADB: Why e-Commerce Important* • Internet is dramatically changing the way goods and services are produced, delivered, sold and purchased • Internet technologies have the potential to empower SME • Potential benefits of e-commerce for developing world are immense - any company can enter global markets where size and location become rather irrelevant * Asavin Chintakananda, Senior Advisor, Asian Development Bank, Page 6 of “Financing E-Commerce While Fighting Poverty” Presentation

  21. China: The Engine of GMS Trade • Continuous price rise in China as well as the protectionist measures in the US and the EU are motivating Chinese firms to move into neighboring ASEAN region Source: United Nations Commodity Trade Statistics Database and Author‟s Calculation.

  22. China: Trading Across Border Costs

  23. Phase 1: B2B Trial in ASEAN-China FTA • AMSs may consider to make reference and utilize ASEAN-China FTA B2B Platform • Targeting lower entry costs and barriers for ASEAN enterprises • Access exciting yet fragmented markets • B2B for ASEAN Member Countries and China to promote inter-regional trade • More support coming targeting Cross-Border online settlement and e-Port • Currently running a trial with Malaysia – lesson learned: government support is critical to success

  24. B2B: Homepage

  25. B2B: Trade Workflow

  26. Rationale for Trial • Accelerate adoption of e-commerce trade • Continuous building of infrastructure, legal framework and increase awareness in e-trade on costs and benefits • Targeting trade opportunities between ASEAN Member Countries and China as a priority in the early trial – worth consideration • Domestic B2C and C2C markets when ready • Effective utilization of transportation infrastructure upgraded in recent years

  27. Phase 2: B2B2C Through Established Partners • Utilize and make use of an established electronic shopping mall at Newegg and other established channels in the U.S. • Leapfrog bypassing ground zero • Shorten learning curve • Access vast middle class consumer segment • Accelerate trading with China through Newegg platform in China • Currently running a trial with Malaysia

  28. Phase 3: Domestic B2C/C2C • Consider to utilize Newegg and other available Public e-Commerce Platforms • Consider not to re-invent certain basics • Reduce learning curve • Lower start-up and entry costs • Tailor-made to specific needs • Government support from each country is critical • Relevant ASEAN Secretariat involvement and coordination very important • Comprehensive planning but small wins through trials utilizing an established channel is recommended

  29. Conclusion • Global e-commerce spending is projected to increase more than 90% by 2014 • Majority of the growth will be in Asia Pacific region especially from China • f • Leverage on the existing platform for faster and easy entry into the e-commerce market • Utilization of FTA B2B platform to increase inter-regional trades

  30. Keys to Success • Adequate e-commerce infrastructure in place • Policy and regulatory framework • Common platform: wheels not made here • B2B before B2C in certain countries • International and local collaborators

  31. THANK YOU! http://www.asean-cn.org http://www.cn-asean.org JUNE 2011 Yunnan Department of Commerce PRC

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