ECOMMERCE IS DEAD LONG LIVE DIGITAL COMMERCE ASEAN DIGITAL COMMERCE IS SURGING
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- Camilla Little
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2 E IS DEAD LONG LIVE The ASEAN region s share of digital commerce is set to exceed US$30 billion over the next three years. 1 Consumer expectations are evolving ever faster, as they seek to shed time-consuming retail chores and spend more time on what they value most. Soon, they ll expect to get what they want, before they even know they want it. ecommerce as we know it is dying. It s time to build new assets and tools that meet the growing demands of the ASEAN consumer. It s time to get ready for digital commerce. ASEAN IS SURGING Technology has changed the face of retail. Power has shifted from brands to consumers, who are increasingly clued up about what they buy and have the purchasing options to match. Markets are being shaken from top to bottom, allowing a new cohort of determined competitors to emerge as leaders. Digital commerce in the ASEAN region is surging, and this enormous online market will grow exponentially to reach US$32 billion by What s behind this expansion? Demographics are a key factor. Half the region s people are under 30 2 and coming into their prime spending years. That s fueling huge growth in mobile and internet use: 800 million mobile connections and 480 million internet users are expected by And the region s increasing affluence, supported by rapid GDP growth in excess of 5 percent, 4 will create 70 million new consumer households 5 over the same period. Digital investments are equally important. Governments across ASEAN are projected to spend US$200 billion on digital infrastructure between 2015 and And companies in the region are set to invest US$10 billion in the next three years 6 (see Figure 1). FIGURE 1. THE CHANGING LANDSCAPE ASEAN GROWTH (US$) 30+ Billion 2.3X 14+ Billion KEY DRIVERS OF ASEAN GROWTH % 800 ASEAN Million Population Mobile Under Connections Age Million Internet Users Million New Consuming Households %+ 200 GDP Billion US$ Growth Digital Infrastructure Spend ASEAN INVESTMENTS (US$) 3 Billion (To date) Billion (Planned) RIDING THE WAVE
3 GIVE THEM WHAT THEY WANT - BEFORE THEY KNOW THEY WANT IT But the true driving force for digital commerce growth is the constantly evolving Asian consumer. As life in the ASEAN region becomes ever more hectic, time becomes increasingly precious. Today s empowered consumers are using their smartphones to shed time-consuming activities in favour of the things they value most like spending quality time with the family. Almost one in four online purchases are already made on smartphones. 7 And by 2020, almost two thirds of transactions will be online. 8 Savvy consumers want convenience and value, and seek the right level of choice and information by using their smart devices to get it. They re reading crowd-sourced reviews and comparing prices across multiple apps and websites when making a purchase decision. The Asian consumer is coming to expect seamless consumer experiences online and offline. As technologies evolve, smart homes will become a reality. Refrigerators will anticipate purchases and provide alerts when stocks run low. Voice-assisted devices will serve information predictively and help complete purchases via seamless payment methods. Shopping will become fully integrated into day-to-day life, freeing consumers from tedious chores. It s shopper s nirvana where consumers get what they want, before they even know they want it (see Figure 2). FIGURE 2. THE CONSUMER REVOLUTION 3 RIDING THE WAVE
4 EMBRACE OR GET LEFT BEHIND The digital era is prompting a shift from ecommerce to digital commerce. Leading companies are already leaving ecommerce behind, along with its limited activations, limited consumer experience and limited data. This is because what has worked in the past no longer does. Simply featuring products on an online platform and spending money on marketing is not enough to attract the evolving Asian consumer. This semi-active mode based on the current ecommerce paradigm is lagging behind what consumers want. Companies are starting to embrace digital commerce as a more holistic way of doing business online. It s allowing them to generate demand, control supply chains and enhance consumer experiences. It s enabling them to better exploit social media and new consumer-facing technologies. And it s providing actionable insights for effective and integrated marketing (see Figure 3). Fashion house Ralph Lauren is using radio frequency identification (RFID) technology to create a deeper emotional connection with consumers. At its flagship Manhattan store, RFID-enabled fitting rooms recognise what consumers bring in to try on. The products are automatically rendered on a smart mirror, along with additional sizes, colours and other recommendations. The mirror can communicate in six languages. And a tap of a button will summon a sales associate. The RFID data is also analysed to guide future merchandising decisions, such as which items are frequently tried on but not purchased. 9 FIGURE 3. SHIFT FROM E TO 4 RIDING THE WAVE
5 BE BOLD. BE AMBITIOUS. BE. LEVERAGE ACCENTURE CONTROL TOWER To keep pace with tomorrow s consumers, companies need to build up their digital commerce and marketing playbooks. And they must reevaluate their current technologies and online strategies. Accenture has developed a comprehensive approach to meet all digital commerce needs. It lets companies take control of their supply chains. It lets them carry out digital marketing. And it lets them generate demand and manage their digital commerce operations. It s an approach that leverages data analytics, product and web content management systems, payments, order management and logistics planning to deliver a best-in-class consumer experience (see Figure 4). ecommerce as we know it is dying. It s time to evolve to meet the growing demands of the ASEAN consumer. It s time to herald the new age of digital commerce. FIGURE 4. ACCENTURE CONTROL TOWER VALUE ASSESSMENT SUPPLY CHAIN DEMAND GENERATION OPERATIONS TECHNOLOGY ENABLERS CUSTOMER EXPERIENCE ANALYTICS FOR MORE INFORMATION, PLEASE CONTACT Mohammed Sirajuddeen Managing Director, Accenture Digital mohammed.sirajuddeen@accenture.com 5 RIDING THE WAVE
6 REFERENCES 1 emarketer, Worldwide Retail ecommerce Sales, August asean%e2%80%99s-digital-economy 3 We are Social, January 2017, Accenture Analysis 4 IHS Research, Euromonitor International 2017, Accenture Analysis 6 Temasek, , Accenture Analysis 7 ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 401,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at the-future-of-commerce-has-arrived-understanding-thenew-asian-consumer 9 Copyright 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture
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