Digital Commernce

Digital Commerce in Asia –
State of the Market.

2© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
What is the current state of
dCommerce in Asia?

Asia Digital Statistics
Source: Internet World Stats, Mobi Thinking,
Asia population (2013)
Asia internet users (2013)
Mobile device/internet users
(2013)
Asia social media users (2013)
1,798m
4,282m
920m
851m
Asia has big potential given the number of young people and its internet & mobile
penetration rate

Most Common Types of Products Sold online in Asia
0%
10%
20%
30%
40%
50%
60%
70%
80%
Consumer
Electronics
Books Clothing &
Apparel
Household
goods
Office
Supplies
Consumer
Packaged
Goods
Sporting
Goods
Pet
Supplies
Food &
Groceries
Tools &
Home
Luxury
Goods
Asia sold USD383.9B on B2C E-commerce Sales in 2013 with China leading the pack
0 200 400 600 800 1000 1200 1400
China
Japan
South Korea
India
Indonesia
Other
2013
2014
2015
2016

China Digital Statistics
2
3
Source: “Winning the $30 trillion Decathlon: Going for Gold in Emerging Markets,” McKinsey Global Institute; KPMG analysis
Taobao.com
TMall.com
Baidu
Amazon China
Weibo
Sina
Major players
include homegrown
companies as well
as Western names:
E-commerce is radically
changing Chinese
consumer habits. By
2017, China will be by
far the most “online
nation” in the world
China population (2013)
Chinese internet users (2013)
Mobile device/internet users (2013)
Chinese social media users (2013)
618m
1,393m
500m
598m

China Mobile Revolution

Key Technology Drivers for eCommerce in China
• 289 Payment
companies
• Innovative Financing
Products
• 618M Internet Users
• 2.68K Internet Sites
• Time spent on
Internet: 20.5
hrs/week
• RMB 45.5B Mobile
Payment
Transactions
• 289 Payment Co
• Innovative
Applications
• 1.23 B Mobile
Users
• 382M Smart Phone
Users
INTERNETPAYMENTS&APPS
MOBILESOCIAL
• 598M Social Media
Users
• Time Spent: 62 min
• Tencent Wechat –
hottest mobile
social

What are some of the
applications seen in the
market?

Market Insights – Same but different
Top10 Most Popular Social Media - China
Qzone – a social networking website created by Tencent. It allows users to
write blogs, keep diaries, send photos, listen to much and watch videos.
Estimated to have 800M users with 500M active users.
Tencent Weibo – a Chinese microblogging website launched by Tenchent.
Users may broadcast a message including 140 Chinese Characters at most
through the web. 600M users with 300 active users.
Sina Weibo – a Chinese microblogging website launched by SINA
Corporation. Has 500M registered users with 280Mactive users
WeChat – a mobile text and voice messaging communication service
developed by Tencent in China. It provides multimedia communication and
supports social networking. Has 600M egistered users with 400M active
users.
Pengyou – is a popular social network by Tencent. It is very similar to Tagged.
It utilises real names with an emphasis on real friendships and allow users to
register with any valid email address. Has 300M registered users with 100
active users.
51.Com – is a Chinese online social networking service provider which serves
as a online game platform. Has 200M registered users.
Kaixin001 – a social networking website, which allows photo sharing, online
messaging, music sharing and online gaming. Has 130M registered users
RenRen – is one of the earliest social network in China, which is very similar to
Facebook. Has 172M registered users. Has 150M registered users
Jiayuan – an online dating website in China. It has 90m registered users.
Douban – a Chinese SNS website allowing registered users to record
information and create content related to film, books, and music etc. It also
owns an internet radio station. Has 200M registered users
Source: Zuitech, CNNIC2013
Top 10 Most Popular Social Media - Global
Facebook – a social networking service. It allows
users to create their own profile, add other users as
friends, exchange messages, and receive automatic
notifications when they update their profile.
Twitter – an online social networking and
microblogging service that enables users to send and
read “tweets”, which are text messages limited to 140
characters.
LinkedIn – a social networking website for people in
professional occupations. It is mainly used for
professional networking
Google+ – a social networking identity service that is
owned and operated by Google Inc. It is also an
authorship tool that associates web-content directly
with its owner/author.
Pinterest – a pinboard-style sharing website that
allows users to create and manage theme-based
image collections such as events, interests, and
hobbies.
Tumblr – a microblogging platform and social
networking website owned by Yahoo!Inc. This allows
users to post multimedia and other content to a short-
form blog.
Flickr – an image hosting and video hosting website.
It is also widely used by photo researchers and by
bloggers to host images that they embed in blogs and
social media.
VK – is one of the biggest social network service in
Europe. It allows users to message contacts publicly
or privately, create groups, public pages and events,
share and tag images and play bowser-based games.
Instagram – an online photo-sharing, video-sharing
and social networking service that enables its users to
take pictures and videos, apply digital filters to them
and share them on a variety of SNSs.
MySpace – a SNS with a strong music emphasis and
pop music singer.
Source: eBizMBA, Jan 2014

Application of dCommerce – From Internet to Mobile eCommerce Platform
Internet Portals

Application of dCommerce – Mobile eCommerce Platform
6 7 8 9
1
0
1 2 3 4 5
1
1
1
2
1
3
1
4
1
5
1
6
1
7
1
8
1
9
2
0
MobileBankingTPPMobilePayment
MobileeCommercePlatforms

Application of dCommerce – Marketing and Advertisement
WeChat has integrated the mobile payment solution in its 5.0 version by leveraging its
400m domestic users which will reform the online and offline purchasing behaviour.
Sharing with
friends
- WeChat allows
users to share
links, coupons with
their friends, as
well as share to
other SNS.
Lucky draws
- Some accounts
conduct lucky
draw with prize to
increase
subscription to
their accounts
Promotions
- Business can
share their
promotions
through their
WeChat account.
QR Code
- With the QR code,
it brings promotion
from offline to
online
Product Catalogue
- Product catalogue
can be found on
WeChat accounts
Innovative
Promotion
- Property
Developers utilise
the video function to
demonstrate 360˚
virtual tour of their
flats

Examples of dCommerce: Didi Taxi and Kuai Di promotion of mobile
payments plus …
AUTOMATIC POSITIONING
To hail taxi
OPTIMIZATION SETTINGS CONTACT YOUR TAXI
The application of a
mobile application for
taxi booking removing
the need for a central call
station:
• 2 of the most popular
taxi booking system that
helps eliminates the
middleman ensuring
better utilization using
LBS and mobile app
communication tool
• Accelerated with the
recent promotion in early
2014 to encourage
mobile payment namely
Alipay and Wechat
payment,

Examples of dCommerce – Social Community linking to sales
Mushroom Street, the largest shopping ladies
sharing community, along with millions of users
discover the fashion, sharing shopping.
Here you can find the best online shopping users to
share a single product and the most likely shop,
watching the show with, learn skin care, fashion
goods. You can also become the most talked about
fashion online shopping of people enjoying the
enthusiasm of fans to follow.
Consumers who become KOL
Mogujie is a ladies online fashion
community which provides a forum
to share fashion ideas and promote
products. Mogujie is recognised as
one of the leading providers of
these services in China.
Mogujie’s website also links directly
to e-Commerce websites that sell
goods and is available on social
media, apps, and internet platforms.
Quick facts

Examples of dCommerce – Innovative use of customer base
Aliloan
Zhongchou
Web
Paipai
Credit
…
1st Generation 2nd Generation
Yuerbao Licaitong
Bafaitong
Wexin
Red Packet
Jindong …

Winning : Requires mastering Data Analytics
17
Building up an analytics department, leveraging efficient tools (GA)
Measuring engagement (visits and transactions), establishing customer
segmentations and 30/90/120 days ROI
Detecting broken point & taking optimizing actions
Improving navigation through regular updates & new functionalities

And market Insights on Consumer Wishes
Retailers are relooking
at their ecommerce
strategies and
payments is a big
focus.
Understanding what
drives consumers will
make a big difference
to how retailers will
develop their
strategies.
The ecosystem needs
to be ready to adapt
and cater for the
changing priorities
which retailers will
have
1. Convenience will attract consumers
2. Become part of the daily routine
3. Collaborate with the rest of the ecosystem
4. Bridge the online-offline divide
5. Be socially aware – provide P2P
6. Integrate with complimentary technologies
7. Be part of loyalty
8. Be aware of market changes

The Post 80/90s are more tech savvy and have different buying behaviours
EMERGENCE OF THE DIGITAL
MULTITASKER

China’s Rise of the middle class
The future China
domestic market
will be driven by
the emerging
urban middle class
Source: “Winning the $30 trillion Decathlon: Going
for Gold in Emerging Markets,” McKinsey Global
Institute
82%
6%
2%
7%
36%
51%
6%
Affluent
(>34K per year)
Lower class
(6K-16K per year)
Poor
(<6K per year)
Major shift in urban
household income
between 2010 and
2020
10%
2010 2020
Middle class
(16-34K per
year)
Average disposable annual
income for Chinese urban
residents in 2012 was the
equivalent of about $4,000,
an increase of 9.6 percent
after taking inflation into
account.

Though smaller, Asia is also a potential
AsPac “Middle Class” expected to grow most
21

Incidence
in past 1 year
1 time
2-3 times
4 times and more
Total
(Year 2012)
Total
(Year 2008)
The Chinese are travelling

China is one of the hotspots for dCommerce Innovations
Innovation?
Micro-Innovation?
OR

The Future is Now

The China model: Willingness and ability to
adapt the business model, sometimes
significantly and be prepared to use new
disruptive technologies
1
The New Consumers: Have you really
engaged with and listened to your consumers?
Consumers are having a far greater influence
on your products
Speed to Market: Level of competition is
intensifying so it is proving critical to engage
early with your consumer base and gather the
data!
Supply Chain : it is becoming more demand
driven and cost competitive – VFM and
customization…
Product Innovation: Is this the most
disruptive force? Are we ready for an
automated end-to-end development process
2
3
4
5
Have you got the model right?

© 2013 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are
affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG
International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a
thorough examination
of the particular situation.

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