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Investment Perspectives in Thailand
Dr Adrian Vanzyl
adrian@ardentcap.com
This presentation will be available at www.arden...
• Why we are all here – topline SEA numbers
• Protests, politics, coups – serious or noise?
• Ardent HQ in Thailand – Why ...
• We raise almost all our money OUTSIDE of Thailand and SEA
• For example, last year’s major investors for us included
Jap...
Southeast Asia is bigger (2x) than the US and bigger than the EU
SE Asian Population
Internet Penetration is Exploding
24M
31M
18M
4M
55M
34M
194m
New internet
users
360m
Internet users
Source: We are Social...
0
2
4
6
8
10
12
14
16
18
20
22
24
26
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US$Billions
Year
Furniture & F...
Attempted coup
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
%
Major protests
GDP growth has not been affected by politi...
Political instability: implications
• Immediate – tourism
• Mid term – capital investment, factories
• Long term – affects...
Ardent Capital is an operator VC headquartered in Bangkok with offices in
Singapore and Indonesia, 300 staff across the po...
Ardent Capital team’s exits in SE Asia in the last 3 years
6 start-ups
sold to
sold to
sold to
invested in
Sustainable GDP per capita growth (Avg. 5-6% est. 2013)
Rising disposable income
Growing mobile broadband penetration
Acce...
Unique Market – LINE has 20M users in Thailand…
Source: Statista 2013
Messaging apps are looking to diversify by ecommerce...
• LINE platform came out of nowhere in 18 months
• > 20M users in Thailand alone
• Mobile first
• Rivaling and exceeding F...
Bangkok is the TOP Facebook city
• Facebook counts > 20M users in Thailand, ranking 16th in the world. The Internet
popula...
Bangkok has the MOST Instragram’d locations
• Siam Paragon was the most Instagram’d location in 2013
• Bangkok Internation...
Smartphone sales are
expected to have a
compound annual growth
rate of 43% from 2008 to
2016, reaching 59 million
units in...
Smartphone sales is robust and growing fast
Source: GoogleResearch, Euromonitor 2013
13.5
20.2
25.8
3.0
3.8
4.1
3.5
5.8
7....
Mobile and desktop usage is converging in SE Asia
92 91 91 90
86 85
82
76
71 69
8 9 9 10
14 15 18
24
29 31
95
94 93 92 92 ...
Social networks take up a large share of time online
16.1%
19.7%
21.6%
25.4%
30.8%
32.3%
41.5%
0% 10% 20% 30% 40% 50%
Sing...
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
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
2005 2006 2007 2008 2009 2010 2011 ...
The ASEAN Economic Community (AEC)
Free flow of
goods
Free flow of
services
Free flow of
investment
Free flow of
capital
W...
• True Incube
• AIS The StartUp
Key Thailand Incubators
• 500K THB (19K SGD) initial investment, with follow on for most
s...
• Founders Institute
• dtac Accelerate
Key Thailand Incubators (cont’d)
• World’s largest entrepreneur training and startu...
Key Thailand Co-Working Spaces
• Located in Ekkamai
• Hosts various start up events
• Upcoming Start Up Accelerator Progra...
• Reasonable legal setup (BOI is a great structure)
• Corruption in private sector is low
• Reasonable payments infrastruc...
• We do not start in Singapore
– the market is too small
– the exits are too small
– It proves little, experience not rele...
Notable investments into Thailand-based companies
Company Date Investor(s)
Q4 2013
Q2 2013
Q3 2013
Q3 2013
Q2 2013
• Building a team is tough
– People/HR/Culture scaling - Expertise to build a 500 person team in 18 months
– Tech scaling ...
• Similar to rest of SEA
• Copying is not bad. OK to be inspired by proven models. Execution still very
hard
• Focus on th...
Current Portfolio
S.E. Asia
Thailand
Thailand
S.E. Asia
S.E. Asia
Indonesia
Sri Lanka
Global
aCommerce.asia – Built by Ardent Capital
Phone Orders
Storage Picking
Packing
Online Orders Order Processing
Order Documen...
Full End-to-End Solution
Route PlanningDispatching Loading Truck
Loading Motorbike Delivering Credit Card on Delivery
Cash...
aCommerce Warehouses
Bangkok
• Storage Space: 2,600 sqm
• Office Space: 500 sqm
• Central Bangkok on Rama III Road
• Same ...
aCommerce Clients – All in the last six months
No. 1 Japanese TV
Shopping Network
No. 2 Largest Telecom
company in Thailan...
Overview:
• Highly optimized model around customer acquisition
• Quidsi model in USA (diapers.com, wag.com) – sold to
Amaz...
Thank you
Adrian Vanzyl
CEO & Co-Founder
Email: adrian@ardentcap.com
+66 81 930 8308
946 Dusit Thani Building, 4th fl.,
Ra...
• Additional data slides follow.
Support Slides
36,392
37,185
36,817
34,822
36,473 36,161
2007 2008 2009 2010 2011 2012
Japan
43,228 43,636
43,070
41,366
42,001 42,447
20...
And further GDP growth is expected
36,161 36,963
41,486 42,085
2012 2013 2014 2015
Japan
42,447 43,112
38,975 39,399
2012 ...
Source: Euromonitor
Disposable income has increased since 2007
-
10,000
20,000
30,000
40,000
50,000
60,000
2007 2008 2009 ...
-
10,000
20,000
30,000
40,000
50,000
60,000
2012 2013 2014 2015
Disposable Income per Capita [Female] 2012-2015 (US$)
Sing...
Source: The Digital Media and Attitudes of Southeast Asian Consumers 2011, Nielsen; eMarketer
14
19.8
21.5
25
16.6 16
20.5...
7.0 8.9 11.6
16.7 19.1 20.5 22.2 24.4 27.1
30.4
34.5
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
11.1 13.0 13.6
17.2 20.2
...
Credit card and transaction volume will also grow
42,159
47,631 49,351 50,265 53,254 56,071 58,856 61,609 64,248 66,749 69...
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...
Started in Dec 2011
Adaptation of Zappos.com
1,300+ employed across the region
Annualized Gross Run Rate: €115mm
Well over...
1.95
2.71
3.86
4.80 5.07
7.57
9.90
13.05
2005 2006 2007 2008 2009 2010 2011 2012
Online Retail Sales Value in Indonesia, M...
1550
684 679
430 328
2351
1260
1086
628
490
Vietnam Indonesia Thailand Philippines Malaysia
Unique Visitors (‘000s)
Rocket...
More people living inside this circle than outside
Overview:
• Little competition, > 90% market share
• Path to exit started with 26% sale to Dialog/Axiata
(dominant carrier...
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Transcript of "Ardent capital and_thailand_investments_2014-01-15_v3"

  1. 1. Investment Perspectives in Thailand Dr Adrian Vanzyl adrian@ardentcap.com This presentation will be available at www.ardentcap.com
  2. 2. • 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 Thailand + Tech investing = genius or crazy?
  3. 3. • 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 Why SEA, Why Thailand?
  4. 4. Southeast Asia is bigger (2x) than the US and bigger than the EU SE Asian Population
  5. 5. Internet Penetration is Exploding 24M 31M 18M 4M 55M 34M 194m New internet users 360m Internet users Source: We are Social, Accenture 2010 2020 62% Est. internet penetration 25% 2010 internet penetration
  6. 6. 0 2 4 6 8 10 12 14 16 18 20 22 24 26 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 US$Billions Year Furniture & Floor Coverings Sports & Leisure Equipment Home & Garden Products Books, News & Stationery Apparel, Accesories & Luxury Goods Music, Video & Entertainment Software Food & Grocery Electrical & Electronics 7.1 23.5 13.5 3.5 2.5 Thailand, Philippines, & Indonesia Online Retail is Growing Fast! Online Retail Sales Forecast 2005 – 2015 – Source ICD Research Why SE Asia? eCommerce is exploding 18.7
  7. 7. Attempted coup 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 % Major protests GDP growth has not been affected by political instability 2011 Tsunami and floods 2008 GFC 1997-98 Asian Financial Crisis Source: GDP Data from Thailand’s National Economic and Social Board Coup Despite frequent political turmoil, history has shown that the Thai economy has its own dynamics and its own momentum
  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. 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 Quick overview of Ardent Capital
  10. 10. Ardent Capital team’s exits in SE Asia in the last 3 years 6 start-ups sold to sold to sold to invested in
  11. 11. 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 Why SE Asia? Converging Trends 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… Source: Statista 2013 Messaging apps are looking to diversify by ecommerce and a mix of: 10 30 50 80 100 120 150 160 200 230 280 300 30 40 50 60 70 80 89 89 100 100 100 130 0 100 200 300 400 12-2011 07-2012 01-2013 04-2013 07-2013 10-2013 Line Kakao Talk Pictures Music Newsfeed Games Stickers 2.8 14 50 100 151 210 210 194 234 272 0 100 200 300 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013
  13. 13. • 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? LINE Stats for Thailand aCommerce runs the eCommerce store for LINE
  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 Source: http://www.socialbakers.com/blog/647-top-10-biggest-facebook-cities # 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% 10 Buenos Aires Argentina 3 533 840 28.52%
  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 Source: http://blog.instagram.com/post/69877035043/top-locations-2013 # 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 New York
  16. 16. 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 Smartphone sales is robust and growing fast
  17. 17. Smartphone sales is robust and growing fast Source: GoogleResearch, Euromonitor 2013 13.5 20.2 25.8 3.0 3.8 4.1 3.5 5.8 7.5 1.3 1.7 1.9 4.2 7.0 9.7 2.1 4.6 9.8 0 10 20 30 40 50 60 2008 2009 2010 2011 2012 2013 2014 2015 2016 SmartphoneSales(inmillions) Indonesia Malaysia Philippines Singapore Thailand Vietnam 3.4m 6.0m 11m 20m 28m 36m 43m 51m 59m
  18. 18. Mobile and desktop usage is converging in SE Asia 92 91 91 90 86 85 82 76 71 69 8 9 9 10 14 15 18 24 29 31 95 94 93 92 92 91 89 86 88 85 5 6 7 8 8 9 11 14 12 15 0 10 20 30 40 50 60 70 80 90 100 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 Mobilevs.Desktop%Traffic Southeast Asia Desktop Southeast Asia Mobile USA Desktop USA Mobile Southeast Asia is outpacing the US toward an equal mobile/desktop traffic share… Source: StatCounter 2013
  19. 19. Social networks take up a large share of time online 16.1% 19.7% 21.6% 25.4% 30.8% 32.3% 41.5% 0% 10% 20% 30% 40% 50% Singapore Worldwide Vietnam Indonesia Thailand Malaysia Philippines Social Network Share of Time Spent Online Source: Southeast Asia Digital Future in Focus 2013, ComScore
  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 0.0 1000.0 2000.0 3000.0 4000.0 5000.0 6000.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 US$Million Year Thailand- Online Retailers Segmentation, Sales Forecast by Category (US$ Million), 2005- 15. Source: ICD Research Furniture & Floor Coverings Sports & Leisure Equipment Home & Garden Products Books, News & Stationery Apparel, Accesories & Luxury Goods Music, Video & Entertainment Software Food & Grocery Electrical & Electronics 0.8B 1.3B 1.4B 1.5B 2.0B 2.5B 3.1B 3.9B 4.8B 5.6B 0.6B 2010-2015: Compound Annual Growth Rate of 22.78%
  25. 25. The ASEAN Economic Community (AEC) Free flow of goods Free flow of services Free flow of investment Free flow of capital What it means… Free flow of skilled labor What it is comprised of… More attractive to foreign direct investment Easier to obtain/move capital across the region Easier to recruit talent from countries in Southeast Asia Cheaper and easier to sell goods across borders Easier to provide services and establish companies in the region 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 Source: ASEAN
  26. 26. • True Incube • AIS The StartUp Key Thailand Incubators • 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. • Founders Institute • dtac Accelerate Key Thailand Incubators (cont’d) • 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
  28. 28. Key Thailand Co-Working Spaces • 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 • HUBBA Thailand • Launchpad • Located in Silom • 800 sq.m. shared space • Ultra High Speed Internet • Six meeting rooms
  29. 29. • 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 Why Thailand – highlights.
  30. 30. • 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 Goldilocks Principle for SEA
  31. 31. Notable investments into Thailand-based companies Company Date Investor(s) Q4 2013 Q2 2013 Q3 2013 Q3 2013 Q2 2013
  32. 32. • 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 Challenges for Entrepreneurs and investors
  33. 33. • 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 New Opportunities for Investors and Entrepreneurs
  34. 34. Current Portfolio S.E. Asia Thailand Thailand S.E. Asia S.E. Asia Indonesia Sri Lanka Global
  35. 35. aCommerce.asia – Built by Ardent Capital Phone Orders Storage Picking Packing Online Orders Order Processing Order Documentation Order Checking Quality Control
  36. 36. Full End-to-End Solution Route PlanningDispatching Loading Truck Loading Motorbike Delivering Credit Card on Delivery Cash 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 • Same day delivery Jakarta • Storage Space: 1,515 sqm • Office space included • Central Jakarta location • Same day delivery
  38. 38. aCommerce Clients – All in the last six months No. 1 Japanese TV Shopping Network No. 2 Largest Telecom company in Thailand 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 Premium Craft Beer with hundreds of selectioin No. 1 Online parenting E- commerce site in Thailand No. 1 Online Pet food and pet care E-commerce site in Thailand No. 1 Largest Retailer in Thailand No. 1 Largest Retailer in Indonesia No. 1 cosmetics and beauty company in the world Leading online luxury cosmetics and skin care in SEA No. 1 messaging app in Thailand (20M users) Blackmores, Australia’s leading natural health brand Malaysian online buying and auction site B2B Beauty & Spa products distributor owned by IBS Beauty
  39. 39. 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 Petloft (Pet Supplies) & Venbi (Parenting) WhatsNew Thailand – Vertical eCommerce Key Data • Annualized run rate revenue: $2M • Monthly Burn rate: $100K • Staff: 12 • Funding to date: $700K Three months’ top line average monthly growth of 47%
  40. 40. Thank you Adrian Vanzyl CEO & Co-Founder Email: adrian@ardentcap.com +66 81 930 8308 946 Dusit Thani Building, 4th fl., Rama IV Rd. Bangrak, Bangkok,10500 Thailand Thank you
  41. 41. • Additional data slides follow. Support Slides
  42. 42. 36,392 37,185 36,817 34,822 36,473 36,161 2007 2008 2009 2010 2011 2012 Japan 43,228 43,636 43,070 41,366 42,001 42,447 2007 2008 2009 2010 2011 2012 USA 6,737 7,049 6,913 6,691 7,425 7,640 2007 2008 2009 2010 2011 2012 Southeast Asia’s Average Source: Trading Economics Double Digit GDP Growth from 2007 to 2012 60% 5% 26.5% 14.0% 15.5% 12.8% 9.8% 30.2% Cumulative Growth in GDP per Capita 2007-2012 In contrast to the USA and Japan, Southeast Asia has experienced double- digit growth in GDP per capita from 2007 to 2012
  43. 43. And further GDP growth is expected 36,161 36,963 41,486 42,085 2012 2013 2014 2015 Japan 42,447 43,112 38,975 39,399 2012 2013 2014 2015 USA Source: Trading Economics 7,640 7,704 8,582 8,927 2012 2013 2014 2015 Southeast Asia’s Average 60% 5% 18.8% 15.5% 8.8% 18.1% 6.7% 1% 17.7% Cumulative Growth in GDP per Capita 2012-2015
  44. 44. Source: Euromonitor Disposable income has increased since 2007 - 10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 USA Disposable Income per Capita [Male] (US$) - 10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 USA Disposable Income per Capita [Female] (US$) Avg. CAGR = 2.37% Avg. CAGR = 1.58% - 10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 Disposable Income per Capita [Female] (US$) Singapore Vietnam Thailand Philippines Malaysia Indonesia - 10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 Disposable Income per Capita [Male] (US$) Singapore Vietnam Thailand Philippines Malaysia Indonesia Avg. CAGR = 9.26% Avg. CAGR = 9.72%
  45. 45. - 10,000 20,000 30,000 40,000 50,000 60,000 2012 2013 2014 2015 Disposable Income per Capita [Female] 2012-2015 (US$) Singapore Vietnam Thailand Philippines Malaysia Indonesia - 10,000 20,000 30,000 40,000 50,000 60,000 2012 2013 2014 2015 Disposable Income per Capita [Male] 2012-2015 (US$) Singapore Vietnam Thailand Philippines Malaysia Indonesia Source: Euromonitor …and will continue to grow Expected Avg. CAGR 6.63% Expected Avg. CAGR 7.16% - 10,000 20,000 30,000 40,000 50,000 60,000 2012 2013 2014 2015 USA Disposable Income per Capita [Male] 2012-2015 (US$) - 10,000 20,000 30,000 40,000 50,000 60,000 2012 2013 2014 2015 USA Disposable Income per Capita [Female] 2012-2015 (US$) Expected CAGR 3.54% Expected CAGR 3.14%
  46. 46. Source: The Digital Media and Attitudes of Southeast Asian Consumers 2011, Nielsen; eMarketer 14 19.8 21.5 25 16.6 16 20.5320.3 10.6 13.3 12 10.9 16.6 35.7 8.3 5.8 6.3 7.5 5.2 4.8 14 4 4.3 3.6 5 3.7 3.9 2.22 Indonesia Malaysia Philippines Singapore Thailand Vietnam USA Hours Spent per Week on Media Internet TV Radio Newspaper Internet is the number one medium Unlike the US, internet has surpassed TV in most Southeast Asian countries as the #1 medium
  47. 47. 7.0 8.9 11.6 16.7 19.1 20.5 22.2 24.4 27.1 30.4 34.5 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 11.1 13.0 13.6 17.2 20.2 23.9 25.9 27.9 30.0 32.0 33.9 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 18.0 18.3 18.6 22.2 30.9 34.6 37.5 40.3 43.2 46.1 49.1 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 0.2 0.2 0.3 0.5 0.8 1.2 1.5 1.8 2.2 2.6 3.0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 5.8 5.9 6.2 7.2 9.6 11.4 12.5 14.0 15.8 18.1 20.8 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 14.0 16.4 17.5 20.1 25.2 29.7 32.8 36.0 39.3 42.7 46.1 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Credit card usage has increased significantly Source: Euromonitor Credit Card Transaction Value ($US Billion) Indonesia Malaysia Philippines Singapore Thailand Vietnam
  48. 48. Credit card and transaction volume will also grow 42,159 47,631 49,351 50,265 53,254 56,071 58,856 61,609 64,248 66,749 69,101 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number of Credit Cards in Southeast Asia (‘000s) $56.12 billion $187.35 billion 2007 Southeast Asia Credit Card Transaction Value 2017 Southeast Asia Expected Credit Card Transaction Value Source: Euromonitor 234% Cumulative Growth 903 983 1,124 1,179 1,225 1,279 1,439 1,605 1,678 1,857 1,942 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number of Credit Card Transactions in Southeast Asia (millions)
  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 Source: Euromonitor, Nielsen 50.87% 34.48% 4.79% 1.88% 32.32% 9.46% 14.63% 43.59% 0% 10% 20% 30% 40% 50% 60% TV Print Radio Online % of Total Ad Spend vs % of Total Time Spent on Media % Ad Spend % Time Spent out of line
  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 Employing over 27,000 people Raised over $1bn in 2012 30+ exits $2.5bn+ in revenue 7 companies currently in SE Asia Indonesia Malaysia Philippines Singapore Thailand Vietnam Indonesia Malaysia Philippines Thailand Vietnam Indonesia Indonesia Malaysia Singapore Vietnam Indonesia Malaysia Singapore Thailand Vietnam Indonesia Malaysia Philippines Singapore Malaysia Philippines
  51. 51. Started in Dec 2011 Adaptation of Zappos.com 1,300+ employed across the region Annualized Gross Run Rate: €115mm Well over $126mm in funding Spent over $23mm in marketing in 2012 Rocket’s SE Asia bets: Started in Feb 2012 Adaptation of amazon.com and alibaba.com 900+ employed across the region Annualized Gross Run Rate: €92mm Well over $185mm in funding INVESTORS:
  52. 52. 1.95 2.71 3.86 4.80 5.07 7.57 9.90 13.05 2005 2006 2007 2008 2009 2010 2011 2012 Online Retail Sales Value in Indonesia, Malaysia, Philippines, Thailand (US$ Billion) E-commerce has seen spectacular growth in SE Asia Source: Online Retailers in Emerging Asia to 2015, ICD Research
  53. 53. 1550 684 679 430 328 2351 1260 1086 628 490 Vietnam Indonesia Thailand Philippines Malaysia Unique Visitors (‘000s) Rocket Internet’s Lazada is catching up …while Amazon is losing visitors Mar 2013 Sep 2012 Mar 2013 Apr 2012 +52% +84% +49%+46% +60% -20% -26% -5% -5% -28% 166 295 137 182 577 123 235 133 173 416 Vietnam Indonesia Thailand Philippines Malaysia Source: Southeast Asia Digital Future in Focus 2013, ComScore
  54. 54. More people living inside this circle than outside
  55. 55. Overview: • Little competition, > 90% market share • Path to exit started with 26% sale to Dialog/Axiata (dominant carrier) • Full product selection • 100+ staff Anything.lk Anything.lk – The Amazon of Sri Lanka Key Data • Annualized run rate revenue 2014: $5.8M • Monthly Burn rate: $112K • Staff: 108 • Funding to date: $2M
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