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Growth of eCommerce in South East Asia
- 1. Growth of eCommerce in SE Asian Region. WCA eCommerce Alex Allen, Managing Director eCommerce Network Webinar Series: 12th October 2017
- 2. 2 Amy Wong WCA eCommerce Amy Wong, General Manager RIJIN
- 3. CONTENTS 01 RIJIN INTRODUCTION 02POTENTIAL MARKET IN SOUTHEAST ASIA 03 04 CHALLENGES CASE STUDIES 05 ROLE OF HONG KONG
- 4. RIJIN was established in 2008 Provide international air, sea freight forwarding and 3PL logistics services Committed to develop E-Commerce logistics solutions Specialize in B2B2C, B2C business model Offer E-Commerce Fulfillment Center (EFC) Qualified by China Customs & CIQ as a licensed Cross-border E-Commerce Enterprise, and a Cross-border E-Commerce Logistics Service Provider. 4
- 5. 5 AsiaEurope Africa Oceania North America Latin America More than 1.5 million square feet of own warehousing capacity in Asia Pacific, North America & Europe.
- 6. 6 E-COMMERCE POTENTIAL IN SOUTHEAST ASIA TOTAL POPULATION INTERNET USERS ACTIVE SOCIAL MEDIA USERS MOBILE SUBSCRIPTIONS ACTIVE MOBILE SOCIAL USERS 644.1 Million 339.2 Million 305.9 Million 854 Million 272.6 Million UBRANISATION: 48% PENETRATION: 53% PENETRATION: 47% vs. POPULATION: 133% PENETRATION: 42% Source: WE ARE SOCIAL Key facts you should pay attention to
- 7. 0.6 1.1 2.1 0.8 0.5 0.6 7.6 8.1 9.1 7.8 7.5 7.6 10.6 11.1 12.1 10.8 10.5 10.6 0 5 10 15 20 25 Estimated Total Retail Sales in coming 5 years Current % of Total Retail Sales 7 Source: Maybank Kim Eng, Temasek Holdings, Google Inc. E-COMMERCE POTENTIAL IN SOUTHEAST ASIA E-Commerce market is projected to grow rapidly
- 8. Singapore – Carousell Vietnam – Lazada Indonesia – Bhinneka Myanmar – Kaymu Pakistan – Daraz Philippines – Sulit Malaysia – Lelong Sri Lanka – Kapruka India – Flipkart, Snapdeal Key Southeast Asia Online Platform Source: letstalkpayments E-COMMERCE POTENTIAL IN SOUTHEAST ASIA
- 9. In Singapore, starting from 1Oct2012, Goods and Services Tax is waived on imported goods of S$400 or less Dedicated e-commerce offices and agencies help to reshape the regulatory environment. Malaysia (The National eCommerce Council (NeCC)) Vietnam (Ministry of Trade’s E-commerce Department) CHALLENGES – Knowledge and Experience Singaporeans are the most active users in the region purchasing products online from overseas —two out of three people do it regularly Example Knowledge of regulatory environment and local market understanding is a key to initiate a business
- 10. 49% of HS codes CHALLENGES - Import Regulations 10Source: The Jakarta Post 19% Indonesia is now working to shorten the list of prohibited and restricted good from
- 11. 74% Indonesia +17500 islands Philippines +7000 islands Transaction paid by cash 11 CHALLENGES – Cash on Delivery & Island Countries Last mile delivery and payment collection become the elements to succeed
- 12. CHALLENGES – IT Capability Rijin Last mile service provider/ Customs/Broker Customer E-Commerce Order Details Status Tracking Manifest Data Data Exchange
- 13. CASE STUDY - Philippines Dominant online marketplace in Southeast Asia
- 14. 1 2 Uncertain Tax Burden arise from the chosen import channel Unclear government policy CASE STUDY - Philippines
- 15. Latest De Minimis value of imported items increased from USD20 to USD200 , being tax exempt Last mile carrier accept Cash on Delivery Exporter’s knowledge of destination Communicate Knowledge Cash on Delivery CASE STUDY - Philippines
- 16. Role of Hong Kong Via Hong Kong • Free Trade Zone • Stocking/ Pick and Pack/ Rework/ Re-pack/Re-label/Return handling/ Other value-added Services •Air/Ocean/Truck
- 17. How to join in? www.wcaecommerce.com ecommerce@wcaworld.com Alex Allen – alex@wcaworld.com Managing Director eCommerce Network Thanks for joining the Webinar!
Editor's Notes
- e-commerce sales could grow to 5 percent to 10 percent of overall retail purchases over the next five years, according to Maybank. China and South Korea, already have higher penetration rates of online retailing of 16 percent and 18 percent respectively
- https://letstalkpayments.com/southeast-asias-top-e-commerce-sites-by-country/
- Understand which department to approach and its regulation before start e-com business GST S400 https://www.vatlive.com/vat-news/singapore-e-commerce-gst-extension/ https://medium.com/fast-forward-advisors-blog/cross-border-b2c-e-commerce-in-southeast-asia-key-trends-and-solutions-bcf34cdae939 E-commerce Regulatory Environment: In Philippines and Vietnam there are creation of dedicated e-commerce offices and agencies which help to reshape the regulatory environment. However, the trustmark that e-commerce companies can acquire does not appear to be trusted by consumers. Indonesia and Thailand lack chapters supporting e-commerce and law support businesses going cross-border. Singapore has taken the lead across the region in adopting many forward-looking regulation that address e-commerce. Regulatory environment for cross-border e-commerce in Malaysia is relatively strong but enforcement of existing regulations should be improved. https://www.mdec.my/digital-innovation-ecosystem/ecommerce/nesr GST on Imported Goods The amount of GST payable is computed based on the CIF value (cost, insurance and freight) of the goods plus all duties payable. The postage paid for the goods can be taken as freight and insurance charges. Online purchases from overseas ecommerce companies are not subject to the tax if the value of the purchase is lower than S$400 (US$293). https://www.techinasia.com/singapore-gst-ecommerce-digital-goods However, GST need not be paid for goods (except for dutiable products) with CIF value of not more than $400. https://www.iras.gov.sg/IRASHome/GST/Consumers/Consumers-Importing-Goods-into-Singapore/ How it works in Singapore is that Goods and Services Tax (GST) need not be paid for imported items bought online by locally based consumers, except for dutiable products which includes alcohol, tobacco products, and vehicles — if the cost (including insurance and freight charges) totals up to S$400 or less. This is why many online shoppers spread out their purchases to avoid paying tax.
- 49% of 10,826 HS (harmonized system) codes listed in the Custom Tariff Book are either prohibited and restricted goods imported into Indonesia http://www.thejakartapost.com/news/2017/08/09/indonesia-to-shorten-list-of-prohibited-restricted-goods.html
- 1. COD Today’s SEA is eerily similar to China 10 years ago. With credit card penetration in the low single digits, COD has become the dominant payment method, with 74 percent of transactions in emerging SEA paid through cash, based on data from aCommerce.