eCommerce solutions and technologies are rapidly evolving and so is the market opportunity. CEO’s and CIO’s of every online business are struggling to cherry-pick the most appropriate solution for their growing needs. One of the factors that make it even more difficult is the enormous scale predicted for the market growth. Then there is an increasing popularity of mobile commerce that further weighs into the decision process.
Market Size and Opportunity:
The analysts forecast the Global E-commerce Software market to grow at a CAGR of 11.73 percent over the period 2012-2016. Asia-Pacific will contribute the most new dollars to business-to-consumer (B2C) ecommerce sales in coming years, according to eMarketer’s forecast of digital sales of retail and travel products and services. This year alone, B2C ecommerce sales are expected to grow 23% in the region, with sales in China and Indonesia growing particularly fast, up 65% and 71%, respectively.
In 2013 user experience is seen as investment area to drive future revenue. As per Oracle’s findings on B2C global trends, 41% of respondents said they plan to invest in a Commerce platform when asked for their top 3 investment areas, 38% of respondents cited digital customer experience as a planned investment, Social (37%) and mobile (37%) ranked third and fourth, respectively, as investment areas in 2013.
SAP’s findings suggests APAC is far ahead of other regions as far as m-commerce goes. 84 percent want more interactions, 67 percent want more payment methods (e.g. a mobile wallet), and 42 percent have actually purchased something through their mobile phones
New Business Models and Partnerships
Even as you read this there are thinking caps at work trying to devise new ways and ideas to maximize their sales online. This burning need has given rise to various business models like the multi-channel commerce, bricks-and-clicks and hybrid online-offline that maximizes the competitive advantage from the combination of both the web and the physical channel.
With the social channel gaining more importance there are online businesses that are launch daily deals, flash sales and referral offers on the social media as soon as it goes live online. Be it the Amazon or the eBay or the Snapsters of the world each one of them is doing it. In India and China given the rising traffic on social media and on mobile there are cross channel teasers broadcasted almost every day.
Indonesia is poised to become a major player in e-commerce in the next few years, with estimated total market revenue ranging from US$3bn (baseline scenario) to US$10bn (upside scenario) by 2015, representing growth rates of 3X to 10X from the current level. Hence, the intent to bring a focus in this white paper. Indonesian ecommerce is to be watched closely in the coming months and years primarily for the following reasons –
a) Economic growth – Indonesia is on a rapid economic growth path. The growth in the middle class population (GDP > $3000) is one of the key drivers of this growth.
b) Internet penetration – With around 25% of Indonesian population, and growing, using internet for various purposes is also triggering the growth in ecommerce. Typical usage of users is in the area of bank transfers, net banking and online shopping. People have also getting used to using their mobile phones and tablets for transacting online. Of the 25% around 6% have conducted online transactions to tune of 10Trillion rupiahs.
With the launch of a local payment gateway IPAYMU and more on the anvil the comfort factor of transacting online is rising.
Some of the challenges that exist and will hopefully get addressed over time are –
a) Most people in Indonesia do not have a credit card hence the most popular method of epayment is through either bank transfers or cash on delivery (COD). COD is a popular payment method in the Asian region for obvious reasons. But then that’s slowly changing with more and more adaptations of secured payment gateways and consumer protection laws getting strengthened.
b) Backend logistics support needs a technology booster shot. With low technology and non-integrated (avoiding the usage of disintegrated) systems it gets expensive to ship particularly bulk items or to places in the east of Indonesia. There could be exceptions like JNE/Tiki that has a sizeable coverage all across Indonesia.
So, in summary, keep an eye and stay invested in Indonesia if you are a long term player.
Product vendors that will dominate the eCommerce market include Oracle Corp with the Web Commerce Suite, SAP with Hybris and IBM with Websphere Commerce. Gartner’s 2013 Magic Quadrant for E-Commerce has identified them as the three as leaders. Among the challengers Demandware does seems to be serious threat to the leaders.
The three key aspects that help you measure the big guns in this area –
1) Dependability and Scalability
2) Higher degree of Personalization
3) Strong integration capabilities
This Magic Quadrant illustrates the key technical, organisational and go-to-market challenges that e-commerce practitioners will face in the coming years. Beyond these parameters the practitioners will have to go deep into the customer present and future needs and mapping them with product capabilities to identify the best fitting solution.
Customers tend to fall in the trap of their ‘Now’ needs and ride on the product that fits well into their ‘Now’ situation. It is imperative that the customer vision also is understood and the alignment with the product’s roadmap ensured.
We strongly believe that our company Logixal is well poised to address the ecommerce spurt in Asia particularly since we are sitting right in the middle of region – India. The Indian online business has a lot of similarities and synergy with the market in other countries in the Asian region and hence our India experience positions us as one of the market leaders in the ecommerce implementation.