Investment Perspectives in Thailand
Dr Adrian Vanzyl
adrian@ardentcap.com
This presentation will be available at www.arden...
Thailand + Tech investing = genius or crazy?
•
•
•
•
•
•
•

Why we are all here – topline SEA numbers
Protests, politics, ...
Why SEA, Why Thailand?
• We raise almost all our money OUTSIDE of Thailand and SEA
• For example, last year’s major invest...
SE Asian Population
Southeast Asia is bigger (2x) than the US and bigger than the EU
Internet Penetration is Exploding
2010

2020

31M

194m

24M
34M
18M

360m

New internet
users

Internet users

4M
55M

25...
Why SE Asia? eCommerce is exploding
Thailand, Philippines, & Indonesia Online Retail is Growing Fast!
Online Retail Sales ...
GDP growth has not been affected by political instability
Despite frequent political turmoil, history has shown that the T...
Political instability: implications

• Immediate – tourism
• Mid term – capital investment, factories
• Long term – affect...
Quick overview of Ardent Capital

Ardent Capital is an operator VC headquartered in Bangkok with offices in
Singapore and ...
Ardent Capital team’s exits in SE Asia in the last 3 years

sold to
sold to
sold to
invested in

6 start-ups
Why SE Asia? Converging Trends
Sustainable GDP per capita growth (Avg. 5-6% est. 2013)

Rising disposable income
Growing m...
Unique Market – LINE has 20M users in Thailand…
Messaging apps are looking to diversify by ecommerce and a mix of:
Picture...
LINE Stats for Thailand
aCommerce runs the eCommerce store for LINE
•
•
•
•
•
•
•
•
•

LINE platform came out of nowhere i...
Bangkok is the TOP Facebook city
•

Facebook counts > 20M users in Thailand, ranking 16th in the world. The Internet
popul...
Bangkok has the MOST Instragram’d locations
•
•

Siam Paragon was the most Instagram’d location in 2013
Bangkok Internatio...
Smartphone sales is robust and growing fast
Smartphone sales are
expected to have a
compound annual growth
rate of 43% fro...
Smartphone sales is robust and growing fast
59m

60

51m

9.8

50

43m
Smartphone Sales (in millions)

9.7

36m

40

4.6
1...
Mobile and desktop usage is converging in SE Asia
Southeast Asia is outpacing the US toward an equal mobile/desktop traffi...
Social networks take up a large share of time online
Social Network Share of Time Spent Online
41.5%

Philippines

Malaysi...
Most Promising Emerging Markets for Investors
The Thai Economy: Big
SE Asian countries rank high in ease of doing business

Source: Doingbusiness.org 2013
The Thai Economy: Sophisticated
Thailand - Online Retail Sales Forecasts
2010-2015: Compound Annual Growth Rate of 22.78%
Thailand- Online Retailers Segme...
The ASEAN Economic Community (AEC)
In 2015, Southeast Asia will transform into an integrated market, making it
easier for ...
Key Thailand Incubators
•

True Incube

•
•
•

•

AIS The StartUp

•
•

500K THB (19K SGD) initial investment, with follow...
Key Thailand Incubators (cont’d)
•

Founders Institute

•

•
•
•
•
•

World’s largest entrepreneur training and startup la...
Key Thailand Co-Working Spaces
•

HUBBA Thailand

•

Launchpad

•
•
•
•
•
•

Located in Ekkamai
Hosts various start up eve...
Why Thailand – highlights.
•
•
•
•
•
•
•
•
•
•

Reasonable legal setup (BOI is a great structure)
Corruption in private se...
Goldilocks Principle for SEA
• We do not start in Singapore
– the market is too small
– the exits are too small
– It prove...
Notable investments into Thailand-based companies
Company

Date
Q4 2013

Q2 2013

Q3 2013

Q3 2013

Q2 2013

Investor(s)
Challenges for Entrepreneurs and investors
• Building a team is tough
– People/HR/Culture scaling - Expertise to build a 5...
New Opportunities for Investors and Entrepreneurs
•
•
•

Similar to rest of SEA
Copying is not bad. OK to be inspired by p...
Current Portfolio

Thailand
S.E. Asia
Thailand
S.E. Asia
S.E. Asia
Global
Sri Lanka

Indonesia
aCommerce.asia – Built by Ardent Capital

Online Orders

Storage

Quality Control

Phone Orders

Picking

Packing

Order P...
Full End-to-End Solution

Dispatching

Loading Motorbike

Cash on Delivery

Route Planning

Loading Truck

Delivering

Cre...
aCommerce Warehouses

Bangkok
• Storage Space: 2,600 sqm
• Office Space: 500 sqm
• Central Bangkok on Rama III Road

Jakar...
aCommerce Clients – All in the last six months

No. 1 cosmetics and beauty
company in the world

No. 2 Largest Telecom
com...
Petloft (Pet Supplies) & Venbi (Parenting)
WhatsNew Thailand – Vertical eCommerce
Overview:
• Highly optimized model aroun...
Thank you

Thank you
Adrian Vanzyl
CEO & Co-Founder
Email: adrian@ardentcap.com
+66 81 930 8308
946 Dusit Thani Building, ...
Support Slides
•

Additional data slides follow.
Double Digit GDP Growth from 2007 to 2012
In contrast to the USA and Japan, Southeast Asia has experienced doubledigit gro...
And further GDP growth is expected
Cumulative Growth in GDP per Capita 2012-2015
Southeast Asia’s Average

17.7%
6.7%
8.8%...
Disposable income has increased since 2007
Disposable Income per Capita [Male] (US$)
60,000

Disposable Income per Capita ...
…and will continue to grow
Disposable Income per Capita [Female] 2012-2015 (US$)

Disposable Income per Capita [Male] 2012...
Internet is the number one medium
Unlike the US, internet has surpassed TV in most Southeast Asian countries
as the #1 med...
Credit card usage has increased significantly
Credit Card Transaction Value ($US Billion)
Indonesia

7.0

8.9

11.6

'07

...
Credit card and transaction volume will also grow
Number of Credit Cards
in Southeast Asia (‘000s)
50,265
47,631 49,351
42...
Online Advertising is Totally Out of Line
In Southeast Asia, people spend 44% of their media time online, but only 2% of
a...
Biggest player in SEA - Who is Rocket Internet?
Rocket Internet has built over 100 companies in 50+ Countries
Started in 2...
Rocket’s SE Asia bets:

Started in Dec 2011

Started in Feb 2012

Adaptation of Zappos.com

Adaptation of amazon.com and
a...
E-commerce has seen spectacular growth in SE Asia
Online Retail Sales Value in Indonesia, Malaysia,
Philippines, Thailand ...
Rocket Internet’s Lazada is catching up
Unique Visitors (‘000s)
+52%
2351

+84%

1550

1260
684

+60%
1086
679

+46%
430

...
More people living inside this circle than outside
Anything.lk
Anything.lk – The Amazon of Sri Lanka
Overview:
• Little competition, > 90% market share
• Path to exit starte...
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Investment Perspectives in Thailand by Dr Adrian Vanzyl (Ardent Capital)

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Adrian Vanzyl from Ardent Capital presented on Investment Perspectives in Thailand at e27's inaugural VentureCon event held on 16 January 2014.

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Investment Perspectives in Thailand by Dr Adrian Vanzyl (Ardent Capital)

  1. 1. Investment Perspectives in Thailand Dr Adrian Vanzyl adrian@ardentcap.com This presentation will be available at www.ardentcap.com
  2. 2. Thailand + Tech investing = genius or crazy? • • • • • • • Why we are all here – topline SEA numbers Protests, politics, coups – serious or noise? Ardent HQ in Thailand – Why specifically Bangkok? Thailand specifics The Thai ecosystem Opportunities for investors and entrepreneurs in Thailand Specific examples of what Ardent is doing
  3. 3. Why SEA, Why Thailand? • We raise almost all our money OUTSIDE of Thailand and SEA • For example, last year’s major investors for us included Japanese (Recruit, GMO, NTT Docomo, Cyberagent) and USA (Siemer) • At some point we always have to explain SEA • And in particular Thailand • This is a very detailed deck with lots of data in the appendix that YOU can use to answer this same question • Please download it from www.ardentcap.com
  4. 4. SE Asian Population Southeast Asia is bigger (2x) than the US and bigger than the EU
  5. 5. Internet Penetration is Exploding 2010 2020 31M 194m 24M 34M 18M 360m New internet users Internet users 4M 55M 25% 62% 2010 internet penetration Est. internet penetration Source: We are Social, Accenture
  6. 6. Why SE Asia? eCommerce is exploding Thailand, Philippines, & Indonesia Online Retail is Growing Fast! Online Retail Sales Forecast 2005 – 2015 – Source ICD Research 26 23.5 24 22 18.7 20 Sports & Leisure Equipment Home & Garden Products 18 16 US$ Billions Furniture & Floor Coverings 13.5 Books, News & Stationery 14 12 Apparel, Accesories & Luxury Goods 10 7.1 Music, Video & Entertainment Software 8 6 2.5 4 3.5 Food & Grocery 2 Electrical & Electronics 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year
  7. 7. GDP growth has not been affected by political instability Despite frequent political turmoil, history has shown that the Thai economy has its own dynamics and its own momentum % Coup 4,000 Attempted coup 3,500 Major protests 2011 Tsunami and floods 3,000 2008 GFC 2,500 2,000 1997-98 Asian Financial Crisis 1,500 1,000 500 0 Source: GDP Data from Thailand’s National Economic and Social Board
  8. 8. Political instability: implications • Immediate – tourism • Mid term – capital investment, factories • Long term – affects everything. Quality of life, exits, growth tied to GDP • Thailand has survived so far despite the politics • Reality – life goes on. Offices open. Supermarkets open. Public transport unaffected. No anti western sentiment – this is 100% internal
  9. 9. Quick overview of Ardent Capital Ardent Capital is an operator VC headquartered in Bangkok with offices in Singapore and Indonesia, 300 staff across the portfolio, 120 in Bangkok Traditional VC – we make seed and early stage investments, with six investments made in past 18 months throughout Southeast Asia Labs business – we incubate companies in-house such as aCommerce and WhatsNew Three of founding team of six are Thai American (Paul, Tom, John) My background – 20 years doing Internet – 1 ASX IPO (Sausage Software), 1 NASDAQ IPO (LookSmart), 1 Microsoft Exit (LinkExchange), 1 NZX IPO, 12 years VC in San Francisco (Blumberg Capital), 7 years across SEA
  10. 10. Ardent Capital team’s exits in SE Asia in the last 3 years sold to sold to sold to invested in 6 start-ups
  11. 11. Why SE Asia? Converging Trends Sustainable GDP per capita growth (Avg. 5-6% est. 2013) Rising disposable income Growing mobile broadband penetration Accelerating smartphone penetration Social Media penetration Increasing Credit Card penetration AEC 2015 Over $17B of branded and direct to consumer ecommerce coming into SEA in next 3 years
  12. 12. Unique Market – LINE has 20M users in Thailand… Messaging apps are looking to diversify by ecommerce and a mix of: Pictures Music Newsfeed 300 Games Stickers 272 400 234 210 300 210 200 280 300 194 230 151 200 200 150 100 100 160 120 100 50 2.8 30 14 0 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 0 10 12-2011 40 30 50 50 07-2012 60 70 01-2013 Line Source: Statista 2013 130 80 100 80 89 89 04-2013 Kakao Talk 100 07-2013 100 100 10-2013
  13. 13. LINE Stats for Thailand aCommerce runs the eCommerce store for LINE • • • • • • • • • LINE platform came out of nowhere in 18 months > 20M users in Thailand alone Mobile first Rivaling and exceeding Facebook member base The LINE store has 5.5M friends, majority of which were acquired in 72 hours Largest direct to consumer channel in the country, largest active reach Most campaigns sell out in minutes Last Monday – 700 vouchers, released at mid day, sold out 2 minutes later Platform where competitors are now doing – Movie sales, transactions, music, games, reservations • What should Facebook do?
  14. 14. Bangkok is the TOP Facebook city • Facebook counts > 20M users in Thailand, ranking 16th in the world. The Internet population in Thailand is same as Facebook penetration # City Country Users Penetration 1 Bangkok Thailand 8 682 940 104.34% 2 Jakarta Indonesia 7 434 580 34.10% 3 Istanbul Turkey 7 066 700 62.98% 4 London United Kingdom 6 139 180 73.79% 5 Bogota Colombia 6 112 120 82.15% 6 Sao Paulo Brazil 5 718 220 29.88% 7 Mexico City Mexico 4 294 820 23.30% 8 Santiago Chile 4 129 700 73.35% 9 Mumbai India 3 700 460 18.95% Argentina 3 533 840 28.52% 10 Buenos Aires Source: http://www.socialbakers.com/blog/647-top-10-biggest-facebook-cities
  15. 15. Bangkok has the MOST Instragram’d locations • • Siam Paragon was the most Instagram’d location in 2013 Bangkok International Airport was the most Instragram’d location in 2012 # Location Where? 1 Siam Paragon Bangkok 2 Times Square New York 3 Disneyland California 4 Bellagio Fountains Las Vegas 5 Disney World Florida 6 Staples Center Los Angeles 7 Central Park New York 8 Dodger Stadium Los Angeles 9 Bangkok International Airport Bangkok 10 The High Line Source: http://blog.instagram.com/post/69877035043/top-locations-2013 New York
  16. 16. Smartphone sales is robust and growing fast Smartphone sales are expected to have a compound annual growth rate of 43% from 2008 to 2016, reaching 59 million units in 2016 Source: GoogleResearch, Euromonitor 2013
  17. 17. Smartphone sales is robust and growing fast 59m 60 51m 9.8 50 43m Smartphone Sales (in millions) 9.7 36m 40 4.6 1.9 7.0 28m 7.5 1.7 30 2.1 20m 20 11m 4.2 1.3 3.5 3.8 3.0 25.8 6.0m 10 4.1 5.8 20.2 3.4m 13.5 0 2008 2009 2010 Indonesia Source: GoogleResearch, Euromonitor 2013 2011 Malaysia Philippines 2012 2013 Singapore Thailand 2014 Vietnam 2015 2016
  18. 18. Mobile and desktop usage is converging in SE Asia Southeast Asia is outpacing the US toward an equal mobile/desktop traffic share… 100 90 95 92 94 93 92 91 91 90 86 80 Mobile vs. Desktop % Traffic 92 91 85 89 86 88 85 82 76 70 71 69 60 50 40 29 30 24 20 14 8 9 9 6 7 8 15 18 10 5 10 8 9 11 14 12 0 2010-06 2010-09 2010-12 2011-03 2011-06 2011-09 2011-12 2012-03 2012-06 2012-09 2012-12 2013-03 2013-06 Southeast Asia Desktop Source: StatCounter 2013 31 Southeast Asia Mobile USA Desktop USA Mobile 15
  19. 19. Social networks take up a large share of time online Social Network Share of Time Spent Online 41.5% Philippines Malaysia 32.3% Thailand 30.8% Indonesia 25.4% Vietnam 21.6% Worldwide 19.7% Singapore 16.1% 0% Source: Southeast Asia Digital Future in Focus 2013, ComScore 10% 20% 30% 40% 50%
  20. 20. Most Promising Emerging Markets for Investors
  21. 21. The Thai Economy: Big
  22. 22. SE Asian countries rank high in ease of doing business Source: Doingbusiness.org 2013
  23. 23. The Thai Economy: Sophisticated
  24. 24. Thailand - Online Retail Sales Forecasts 2010-2015: Compound Annual Growth Rate of 22.78% Thailand- Online Retailers Segmentation, Sales Forecast by Category (US$ Million), 2005- 15. Source: ICD Research 5.6B 6000.0 4.8B 5000.0 US $ Million Sports & Leisure Equipment Home & Garden Products 3.9B 4000.0 Books, News & Stationery 3.1B 3000.0 2.5B Apparel, Accesories & Luxury Goods 2.0B 1.5B 2000.0 1000.0 0.8B 1.3B Music, Video & Entertainment Software Food & Grocery 1.4B 0.6B 0.0 2005 Furniture & Floor Coverings Electrical & Electronics 2006 2007 2008 2009 2010 Year 2011 2012 2013 2014 2015
  25. 25. The ASEAN Economic Community (AEC) In 2015, Southeast Asia will transform into an integrated market, making it easier for businesses in Southeast Asia to expand. Thailand is a logical regional hub What it is comprised of… What it means… Free flow of goods Cheaper and easier to sell goods across borders Free flow of services Easier to provide services and establish companies in the region Free flow of investment More attractive to foreign direct investment Free flow of capital Easier to obtain/move capital across the region Free flow of skilled labor Source: ASEAN Easier to recruit talent from countries in Southeast Asia
  26. 26. Key Thailand Incubators • True Incube • • • • AIS The StartUp • • 500K THB (19K SGD) initial investment, with follow on for most start-ups 99 days bootcamp in co-working space Business support: 26M customer base, distribution channels, media support, business partnerships Mentorship program including market insights, investor access, business support, co-working space, and pitching workshops StartUp Weekends is a venture competition
  27. 27. Key Thailand Incubators (cont’d) • Founders Institute • • • • • • World’s largest entrepreneur training and startup launch program Active in 55 cities including Bangkok 1000 companies participated 89.5% survival rate 10,000 jobs created • • • 20 startups initially selected for the workshop stage Selection is subsequently narrowed down to 10 Finalists present at demo day and winner(s) flies to Silicon Valley dtac Accelerate
  28. 28. Key Thailand Co-Working Spaces • HUBBA Thailand • Launchpad • • • • • • Located in Ekkamai Hosts various start up events Upcoming Start Up Accelerator Program & Demo Day Various business and technical workshops Ultra High Speed Internet Multiple Meeting Rooms • • • • Located in Silom 800 sq.m. shared space Ultra High Speed Internet Six meeting rooms
  29. 29. Why Thailand – highlights. • • • • • • • • • • Reasonable legal setup (BOI is a great structure) Corruption in private sector is low Reasonable payments infrastructure Good credit card and banking penetration in the population Reasonable logistics (transport and traffic are OK) High mobile phone penetration (> 100% saturation) High smartphone penetration High quality mobile broadband Large market Closed language market, price premium on exit
  30. 30. Goldilocks Principle for SEA • We do not start in Singapore – the market is too small – the exits are too small – It proves little, experience not relevant to the rest of SEA – Too easy, too many competitors • We do not start in Indonesia – it is too difficult as a first market, with too many challenges – Legal, infrastructure, ownership, payments, staffing • We start in Thailand – because it is difficult, but not too difficult – Lessons learnt are applicable to rest of region • After Thailand – Indonesia – Then Philippines, Malaysia, Singapore, and Vietnam
  31. 31. Notable investments into Thailand-based companies Company Date Q4 2013 Q2 2013 Q3 2013 Q3 2013 Q2 2013 Investor(s)
  32. 32. Challenges for Entrepreneurs and investors • Building a team is tough – People/HR/Culture scaling - Expertise to build a 500 person team in 18 months – Tech scaling - Expertise to build tech that scales to 100s of millions of transactions • Think big vs perceived lack of capital – Historically have grown from cash flow – small, single markets – MUST think regional – minimum 3 of 6 markets – MUST think big problems – little solutions don’t sell for much • Think exits – Global acquirer doesn’t need your IP – Does need your people – So turn the tech model upside down – People are more valuable than IP
  33. 33. New Opportunities for Investors and Entrepreneurs • • • Similar to rest of SEA Copying is not bad. OK to be inspired by proven models. Execution still very hard Focus on three things – Team – competition is manageable so a strong team has head start – Total addressable market – is it really big? Are you too early? – Proven models – give you a roadmap, reduce risk • Ardent Capital – what are we doing? – Basic infrastructure – Transactional commerce – generate real revenue, easier to value, barriers to entry
  34. 34. Current Portfolio Thailand S.E. Asia Thailand S.E. Asia S.E. Asia Global Sri Lanka Indonesia
  35. 35. aCommerce.asia – Built by Ardent Capital Online Orders Storage Quality Control Phone Orders Picking Packing Order Processing Order Checking Order Documentation
  36. 36. Full End-to-End Solution Dispatching Loading Motorbike Cash on Delivery Route Planning Loading Truck Delivering Credit Card on Delivery Customer Care Center Finance & Accounting
  37. 37. aCommerce Warehouses Bangkok • Storage Space: 2,600 sqm • Office Space: 500 sqm • Central Bangkok on Rama III Road Jakarta • Storage Space: 1,515 sqm • Office space included • Central Jakarta location • Same day delivery • Same day delivery
  38. 38. aCommerce Clients – All in the last six months No. 1 cosmetics and beauty company in the world No. 2 Largest Telecom company in Thailand B2B Beauty & Spa products distributor owned by IBS Beauty Malaysian online buying and auction site No. 1 messaging app in Thailand (20M users) No. 1 Largest Retailer in Thailand No. 1 Largest Retailer in Indonesia Leading online luxury cosmetics and skin care in SEA Largest Regional Luxury Online Retailer (Funding $79M) B2C Beauty & Spa products distributor owned by IBS Beauty B2B2C platform with 800 brands and 20,000 different items Blackmores, Australia’s leading natural health brand No. 1 Online Pet food and pet care E-commerce site in Thailand Premium Craft Beer with hundreds of selectioin No. 1 Online parenting Ecommerce site in Thailand No. 1 Japanese TV Shopping Network
  39. 39. Petloft (Pet Supplies) & Venbi (Parenting) WhatsNew Thailand – Vertical eCommerce Overview: • Highly optimized model around customer acquisition • Quidsi model in USA (diapers.com, wag.com) – sold to Amazon for $545M • Petloft is now number 1 in its space in 5 months Key Data • Annualized run rate revenue: • Monthly Burn rate: • Staff: • Funding to date: $2M $100K 12 $700K Three months’ top line average monthly growth of 47%
  40. 40. Thank you Thank you Adrian Vanzyl CEO & Co-Founder Email: adrian@ardentcap.com +66 81 930 8308 946 Dusit Thani Building, 4th fl., Rama IV Rd. Bangrak, Bangkok,10500 Thailand
  41. 41. Support Slides • Additional data slides follow.
  42. 42. Double Digit GDP Growth from 2007 to 2012 In contrast to the USA and Japan, Southeast Asia has experienced doubledigit growth in GDP per capita from 2007 to 2012 Cumulative Growth in GDP per Capita 2007-2012 Southeast Asia’s Average 30.2% 9.8% 5% 15.5% 60% 7,640 14.0% 7,425 12.8% 7,049 6,737 6,913 6,691 26.5% 2007 2008 2009 USA 43,228 43,636 2007 2008 37,185 43,070 2009 2011 2012 Japan 41,366 Source: Trading Economics 2010 2010 42,001 2011 42,447 36,392 36,817 36,473 36,161 34,822 2012 2007 2008 2009 2010 2011 2012
  43. 43. And further GDP growth is expected Cumulative Growth in GDP per Capita 2012-2015 Southeast Asia’s Average 17.7% 6.7% 8.8% 5% 15.5% 60% 8,927 8,582 18.1% 18.8% 7,640 1% 2012 7,704 2013 41,486 43,112 38,975 2012 Source: Trading Economics 2013 2015 Japan USA 42,447 2014 39,399 2014 2015 36,161 2012 42,085 2014 2015 36,963 2013
  44. 44. Disposable income has increased since 2007 Disposable Income per Capita [Male] (US$) 60,000 Disposable Income per Capita [Female] (US$) 60,000 Avg. CAGR = 9.26% 50,000 Avg. CAGR = 9.72% 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 Singapore Vietnam Thailand Singapore Vietnam Thailand Philippines Malaysia Indonesia Philippines Malaysia 2012 Indonesia USA Disposable Income per Capita [Male] (US$) 60,000 USA Disposable Income per Capita [Female] (US$) 60,000 Avg. CAGR = 1.58% 50,000 Avg. CAGR = 2.37% 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - 2007 Source: Euromonitor 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
  45. 45. …and will continue to grow Disposable Income per Capita [Female] 2012-2015 (US$) Disposable Income per Capita [Male] 2012-2015 (US$) 60,000 60,000 Expected Avg. CAGR 6.63% 50,000 Expected Avg. CAGR 7.16% 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - 2012 2013 2014 2015 2012 2013 2014 Singapore Vietnam Thailand Singapore Vietnam Thailand Philippines Malaysia Indonesia Philippines Malaysia 2015 Indonesia USA Disposable Income per Capita [Male] 2012-2015 (US$) Expected CAGR 3.14% 60,000 USA Disposable Income per Capita [Female] 2012-2015 (US$) Expected CAGR 3.54% 60,000 50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - - 2012 Source: Euromonitor 2013 2014 2015 2012 2013 2014 2015
  46. 46. Internet is the number one medium Unlike the US, internet has surpassed TV in most Southeast Asian countries as the #1 medium Hours Spent per Week on Media 35.7 25 21.5 20.3 20.53 19.8 16.6 14 14 13.3 12 10.6 8.3 5.8 4 Indonesia Malaysia 10.9 7.5 6.3 4.3 16 16.6 5 3.6 Philippines Internet Source: The Digital Media and Attitudes of Southeast Asian Consumers 2011, Nielsen; eMarketer Singapore TV Radio 5.2 3.7 Thailand Newspaper 4.8 3.9 2.22 Vietnam USA
  47. 47. Credit card usage has increased significantly Credit Card Transaction Value ($US Billion) Indonesia 7.0 8.9 11.6 '07 '08 '09 16.7 19.1 '10 '11 20.5 22.2 24.4 16.4 17.5 20.1 '07 '08 '09 '10 '12 '13 '14 25.2 '11 29.7 32.8 36.0 6.2 7.2 9.6 '15 39.3 '16 42.7 '17 13.0 13.6 '07 '08 '09 46.1 '12 '13 '14 11.4 12.5 14.0 '15 15.8 17.2 20.2 '10 '11 Thailand 30.9 18.0 Philippines 5.9 30.4 11.1 Malaysia 14.0 27.1 Singapore 34.5 '16 18.1 '17 18.3 18.6 '07 '08 '09 20.8 30.0 32.0 23.9 27.9 33.9 25.9 '12 '13 '14 '15 '16 '17 46.1 49.1 34.6 37.5 40.3 43.2 '12 '13 '14 '15 '16 '17 2.2 2.6 3.0 1.8 '14 '15 '16 '17 22.2 '10 '11 Vietnam '07 Source: Euromonitor '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 0.2 0.3 0.5 0.8 1.2 1.5 0.2 5.8 '07 '08 '09 '10 '11 '12 '13
  48. 48. Credit card and transaction volume will also grow Number of Credit Cards in Southeast Asia (‘000s) 50,265 47,631 49,351 42,159 53,254 56,071 Number of Credit Card Transactions in Southeast Asia (millions) 64,248 58,856 61,609 66,749 69,101 1,857 1,942 903 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Euromonitor 1,439 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 Southeast Asia Credit Card Transaction Value $56.12 billion 983 1,225 1,279 1,124 1,179 1,605 1,678 234% Cumulative Growth 2017 Southeast Asia Expected Credit Card Transaction Value $187.35 billion
  49. 49. Online Advertising is Totally Out of Line In Southeast Asia, people spend 44% of their media time online, but only 2% of advertising spending is devoted to online advertisement; however, e-commerce is changing this % of Total Ad Spend vs % of Total Time Spent on Media 60% out of line 50.87% 50% 43.59% 40% 32.32% 34.48% 30% 20% 14.63% 9.46% 10% 4.79% 1.88% 0% TV Print % Ad Spend Source: Euromonitor, Nielsen Radio % Time Spent Online
  50. 50. Biggest player in SEA - Who is Rocket Internet? Rocket Internet has built over 100 companies in 50+ Countries Started in 2007; headquartered in Berlin 75+ active independent portfolio companies Indonesia Malaysia Philippines Singapore Thailand Vietnam Indonesia Malaysia Singapore Thailand Vietnam Employing over 27,000 people Raised over $1bn in 2012 Indonesia Malaysia Philippines Singapore Malaysia Philippines 30+ exits $2.5bn+ in revenue 7 companies currently in SE Asia Indonesia Malaysia Philippines Thailand Vietnam Indonesia Indonesia Malaysia Singapore Vietnam
  51. 51. Rocket’s SE Asia bets: Started in Dec 2011 Started in Feb 2012 Adaptation of Zappos.com Adaptation of amazon.com and alibaba.com 1,300+ employed across the region 900+ employed across the region Annualized Gross Run Rate: €115mm Annualized Gross Run Rate: €92mm Well over $126mm in funding Well over $185mm in funding Spent over $23mm in marketing in 2012 INVESTORS:
  52. 52. E-commerce has seen spectacular growth in SE Asia Online Retail Sales Value in Indonesia, Malaysia, Philippines, Thailand (US$ Billion) 13.05 9.90 7.57 4.80 5.07 2008 2009 3.86 2.71 1.95 2005 2006 Source: Online Retailers in Emerging Asia to 2015, ICD Research 2007 2010 2011 2012
  53. 53. Rocket Internet’s Lazada is catching up Unique Visitors (‘000s) +52% 2351 +84% 1550 1260 684 +60% 1086 679 +46% 430 Vietnam Indonesia Thailand 628 Philippines 235 166 Vietnam Source: Southeast Asia Digital Future in Focus 2013, ComScore Indonesia Malaysia 416 -5% 137 133 123 490 577 -20% 295 328 -28% …while Amazon is losing visitors -26% +49% Sep 2012 Mar 2013 Thailand -5% Apr 2012 Mar 2013 182 173 Philippines Malaysia
  54. 54. More people living inside this circle than outside
  55. 55. Anything.lk Anything.lk – The Amazon of Sri Lanka Overview: • Little competition, > 90% market share • Path to exit started with 26% sale to Dialog/Axiata (dominant carrier) • Full product selection • 100+ staff Key Data • Annualized run rate revenue 2014: • Monthly Burn rate: • Staff: • Funding to date: $5.8M $112K 108 $2M
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