E-LiftOff - aCommerce

e-liftoff
Asean e-commerce ready to
launch
Paul Mckenzie
Consultant
September 2015
For important disclosure information please refer to the last page of this presentation.
e-liftoff - Summary
Proprietary report
Underpenetrated relative to population and GDP share
Online retail understated due to large C2C markets
Main drivers and obstacles
Online retail will be huge in Indonesia; big in Thailand
Cosy competitive environments for offline retail will end
Page 2
Global share of B2C online retail sales
(%)
Share of world
population
Share of
global GDP
Share of B2C
online retail sales
Indian subcontinent
23
3
0.8
China
19
14
19.7
Africa
15
3
0.2
Asean
8
3
0.5
Central and South America
8
8
3.0
North America
6
26
30.2
Western Europe
6
24
26.8
Eastern Europe + Russia
5
5
3.4
Others
5
5
0.8
North Asia
3
8
12.8
Australia / NZ
1
2
1.8
100
100
100
World total
Page 3
B2C share of total online retail
90
(%)
14CL
19CL
82
80
75
70
60
60
60
56
50
50
46
40
40
30
30
30
20
10
0
US
China
Philippines
Malaysia
Thailand
Source: Euromonitor, iResearch, US Department of Commerce, company interviews
Page 4
Indonesia
Online retail sales forecasts - 5Y Cagr
45
(%)
42
40
35
30
25
20
17
15
18
14
10
5
0
Malaysia
Philippines
Thailand
Indonesia
Source: CLSA
Page 5
Online retail sales/capita
1,000
(US$)
14CL
932.8
19CL
900
800
700
600
500
400
337.5
300
200
110.3
100
0
53.0
USA
China
Thailand
40.8
73.9
62.8
Malaysia
14.9
5.2
Indonesia
Source: CLSA, Euromonitor, iResearch, US Department of Commerce
Page 6
10.0
Philippines
Online retail sales as % of total retail sales
25
20
(%)
14CL
19CL
20.2
15
10.7
10
8.9
7.2
5
3.9
3.4
2.2
2.4
0.8
0
China
USA
Thailand
Malaysia
Indonesia
1.2
Philippines
Note: total retail sales exclude autos, auto parts, retail sales of fuel, restaurant and hotel sales as well as the unorganised retail sector (unlicensed/non-tax paying).
Source: CLSA, Euromonitor, iResearch, US Department of Commerce
Page 7
Key drivers and obstacles
Large addressable markets with young populations
Offline retail is underpenetrated
Income levels
Social media - well connected
Mobile-shopping driver
Online payment
Logistics
Page 8
Key drivers and obstacles (cont)
SKU count and merchandise selection
Import duties, taxes and online prices
Private/direct equity funding
Short/medium-term consumption conditions
Page 9
Large addressable markets
Country
Population (m)
Global pop rank
China
1,402
1
India
1,249
2
USA
325
3
Indonesia
256
4
Brazil
204
5
Pakistan
188
6
Nigeria
182
7
Bangladesh
159
8
Russia
147
9
Japan
127
10
Philippines
102
12
Vietnam
92
13
Thailand
67
21
Malaysia
31
43
Source: World Population review
Page 10
Young populations
Percentage of population below age 30
80
70
(%)
70
62
56
60
54
51
50
50
49
41
40
40
37
36
30
28
36
30
30
28
20
10
Source: CLSA, Euromonitor
Page 11
Japan
Germany
China
Pakistan
UK
USA
Thailand
Bangladesh
Brazil
Vietnam
Indonesia
Malaysia
India
Philippines
Russia
Nigeria
0
Offline retail is underpenetrated
200,000
GFA (000m²)
USA
China
Indonesia
Malaysia
Philippines
2.0
157,631
160,000
140,000
120,000
2.5
Thailand
2.2
180,000
(m²/capita)
1.5
100,000
Total retail GFA,
top 10 retailers
0.5
0.5
0.1
4,702
1,736
2,698
3,999
0.3
0.5
34,666
Total store count,
top 10 retailers
847
1,804
941
0
2,178
20,000
6,415
40,000
32,473
60,000
1.0
0.8
80,000
Total retail GFA/capita
(RHS)
Source: CLSA, Euromonitor
Page 12
0.0
Offline retail is underpenetrated
Countries
Total
pop (m)
No. of cities with
pop >1m
No. of cities with
pop of 0.5-1.0m
No. of cities with
pop of 0.1-0.5m
Indonesia
256
11
10
112
Philippines
102
5
6
74
Malaysia
31
2
7
27
Thailand
67
1
0
20
1,402
62
61
292
325
12
25
240
China
USA
Source: World Population Review
Page 13
Income levels
PPP-adjusted GDP per capita vs B2C online retail spending/capita
1,200
B2C spending/capita (US$)
1,100
United
Kingdom
1,000
900
Finland
800
700
USA
600
South
Korea
500
400
300
200
100
0
Hong Kong
Indonesia
Philippines
0
China
10,000
Thailand
20,000
Malaysia
30,000
40,000
50,000
60,000
70,000
GDP per capita - PPP (US$)
Note: six years of historical data for each market. Source: Euromonitor
Page 14
Social media - Well connected
Country
No. of
Facebook
users (m)
Facebook
user as a
% of pop
aged >14
Global
rank
No. of
Twitter
users (m)
Twitter
user as a
% of pop
aged >14
Indonesia
69
37
4
19.5
11
5
Philippines
41
62
6
8.5
13
Thailand
33
60
9
4.5
Vietnam
30
42
10
Malaysia
16
71
182
23
US
Japan
Global No. of Line
rank Users (m)
Line users
as a % of
pop aged
>14
Global
rank
No. of
Instagram
Users (m)
Instagram
users as a %
of pop aged
>14
30.0
16
3
1.17
1
8
8.5
13
12
1.13
2
8
11
33.0
60
2
1.50
3
na
na
na
na
na
na
0.61
1
20
3.5
16
na
10.0
44
10
1.13
5
71
1
107.7
42
1
10.0
4
11
90
35
21
15
29.3
26
3
54.0
49
1
Source: CLSA, Facebook, TechinAsia, Twitter
Page 15
0
Mobile-shopping driver
What % of your online shopping purchases over the last year were carried out on mobile devices?
Mid-point weighted score = 29
Mid-point weighted score = 18
Indonesia
Malaysia
More than
75%
51-75%
5%
4%
More than
75%
11%
Zero
12%
5175%
12%
31-50%
11%
1-5%
13%
31-50%
14%
1120%
12%
21-30%
10%
Philippines
1-5%
15%
21-30%
7%
1120%
11%
6-10%
20%
Mid-point weighted score = 29
51-75%
7%
Zero
17%
31-50%
11%
11-20%
12%
1-5%
20%
Thailand
More than
75%
13%
More than
75%
16%
51-75%
8%
21-30%
9%
6-10%
16%
Mid-point weighted score = 29
Zero
19%
31-50%
14%
6-10%
15%
21-30%
12%
Zero
9%
1-5%
16%
6-10%
15%
11-20%
14%
Source: CLSA
Page 16
Mobile-shopping driver
Internet penetration
140
(%)
Mobile-internet penetration
Fixed-line broadband
120
Mobile internet
(%)
Indonesia
Malaysia
Philippines
Thailand
127
120
100
108
106
104
100
95
89
87
79
80
71
71
71
66
63
58
60
47
40
36
40
28
80
60
45
36
25
40
25
17
20
6
20
Source: Euromonitor, International Telecoms Union
United
Kingdom
Germany
France
USA
Brazil
South
Korea
Japan
Thailand
Philippines
Malaysia
Indonesia
China
0
0
11A
12A
13A
14A
15CL
Source: Euromonitor
Page 17
16CL
17CL
18CL
Mobile-shopping driver
Mobile-internet penetration (%) vs B2C online retail spending/capita (US$)
Expenditure per capita (US$)
1,200
United Kingdom
1,100
1,000
Norway
Denmark
900
USA
800
Switzerland
700
South Korea
Germany
600
500
400
Taiwan
300
Thailand
200
Philippines
100
0
Japan
France
Hong Kong, China
Indonesia
China
Malaysia
0
10
20
Penetration (%)
30
40
50
60
70
80
90
100
110
Source: Euromonitor, ITU
Page 18
120
130
Mobile shopping driver
Cheapest monthly mobile data tariff packages
(2MB - prepaid)
12
(US$)
Average mobile data speeds
10
(Mbps)
9
10.0
10
8
7
8
7.3
6
5
6.0
6
8.8
4
7.7
3
4
2
2.8
India
4.7
Indonesia
Malaysia
Source: CLSA telecoms analysts
Philippines
Thailand
Source: ITU, CLSA telecoms analysts
Page 19
South
Korea
Japan
China
USA
0
Indonesia
0
1.7
2.7
Malaysia
2
2.5
Thailand
1
2.4
Philippines
2.6
4.0
Online payment
Banking statistics
Country
No. of persons with
bank accounts (m)
Population aged
above 18 (m)
Population 18 yrs+ with
bank accounts (%)
No. of personal credit
cards issued (m)
% of adult population
owning a credit card
Brazil
98
144
68
188.3
32
China
870
1,102
79
504.7
16
69
70
99
6.1
46
438
824
53
18.1
4
62
173
36
14.9
2
107
111
97
335.9
66
Malaysia
17
21
81
8.1
20
Nigeria
40
89
44
0.7
3
Philippines
19
60
31
8.0
3
Thailand
41
52
78
18.3
6
UK
50
51
99
54.5
62
229
245
94
528.9
60
21
67
31
3.5
2
Germany
India
Indonesia
Japan
USA
Vietnam
Source: World Bank, Euromonitor
Page 20
Online payment
How do you mainly pay for your online-shopping purchases?
Malaysia
Indonesia
Online payment
platform like
Paypal
8%
Cash on delivery
27%
Online bank
transfer
(including online
payment via
debit cards)
22%
Offline bank
transfer (e.g.
ATM or cashier
payment)
8%
Credit card
36%
Offline bank
transfer (e.g.
ATM or cashier
payment)
8%
Philippines
Online payment
platform like
Paypal
16%
Online bank
transfer
(including online
payment via
debit cards)
7%
Cash on delivery
18%
Online bank
transfer
(including online
payment via
debit cards)
27%
Credit card
21%
Offline bank
transfer (e.g.
ATM or cashier
payment)
22%
Online payment
platform like
Paypal
11%
Thailand
Cash on delivery
44%
Credit card
25%
Online payment
platform like
Paypal
10%
Online bank
transfer
(including online
payment via
debit cards)
13%
Offline bank
transfer (e.g.
ATM or cashier
payment)
17%
Cash on delivery
31%
Credit card
29%
Note: Charts measure the allocation of first rank across payment channels. Source: CLSA
Page 21
Logistics
Online-shopping exercise - Ranking of delivery times by Asean market (1 = fastest)
Country
Indonesia
Malaysia
Philippines
Thailand
Average overall delivery times
3
2
4
1
Average delivery times in capital city
1
3
4
2
Average delivery times to medium distant cities¹
4
1
3
2
Average delivery times to most distant cities¹
3
2
4
1
¹ Based on distance from capital city. Source: CLSA
Delivery times and failures
Total No. of
orders made
No. of online retail
sites ordered from
Average
delivery time
% of deliveries
taking < 5 days
% of deliveries
taking 5-14 days
% of deliveries
taking > 14 days
% of delivery
failures
Indonesia
45
5
4 days 20 hours
51
47
0
2
Malaysia
45
5
4 days 3 hours
71
16
2
11
Philippines
45
5
8 days 5 hours
33
29
13
25
Thailand
48
5
3 days 7 hours
82
10
0
8
Source: CLSA
Page 22
SKU count and merchandise selection
SKU count at leading retailers in the big-four Asean markets
Market/company
Site launch
SKUs
As of
Indonesia
Market/company
Site launch
SKUs
As of
Malaysia
Berrybenka
2012
20,000
Feb 15
DM Dasher
2012
70
May 15
Bilna
2012
30,000
Feb 15
Hishop
2013
2,700
May 15
Blibli
2011
110,000
Feb 15
iPmart Malaysia
2012
150,000
May 15
Bobobobo
2012
20,000
Feb 15
Lelong
1999
1,000,000
May 15
Sep 2015
150,000
Jun 15
Mudah.my
700,000
end 14
Tokopedia
2009
5,000,000
Feb 15
Rakuten Malaysia
2012
200,000
May 15
Zalora Indonesia
2012
76,000
Jun 15
Youbeli
2009
145,000
May 15
Zalora Malaysia
2012
50,000
May 15
Mataharimall
Philippines
Thailand
Calyxta
2014
200
Feb 15
Cdiscount
2014
30,000
April 15
Lazada Philippines
2012
250,000
May 15
Central Online (COL)
2013
56,000
April 15
SM Retail
(shop.thesmstore.com)
2014
15,000
Feb 15
HomePro online
(www.directtoshop.com)
2012
35,000
April 15
Lazada Thailand
2012
400,000
April 15
Zalora Thailand
2012
35,000
April 15
Rakuten Tarad
1998
200,000
April 15
Source: Company interviews
Page 23
SKU count and merchandise selection
No. of local brands among the top-30,
best selling apparel brands (all channels)
25
20
No. of local brands among the top-30,
best-selling consumer-electronics brands¹
(No.)
16
(No.)
15
14
20
19
12
15
10
14
10
8
6
5
7
4
5
4
4
Thailand
9
8
Philippines
10
2
0
Source: Euromonitor
Indonesia
China
India
Thailand
Philippines
Malaysia
Indonesia
China
India
0
Malaysia
0
¹ All channels. Source: Euromonitor
Page 24
SKU count and merchandise selection
What percentage of your online shopping did you spend on foreign sites?
Mid-point weighted score = 16
Mid-point weighted score = 17
Indonesia
More than
50%
31-50% 7%
7%
21-30%
13%
11-20%
13%
Less than
5%
35%
6-10%
25%
Mid-point weighted score = 21
Philippines
More than
50%
13%
31-50%
8%
21-30%
13%
11-20%
11%
31-50%
8%
Malaysia
More than
50%
7%
Less than
5%
27%
2130%
11%
11-20%
18%
6-10%
29%
Mid-point weighted score = 14
Thailand
More than
50%
6%
31-50%
5%
Less than
5%
37%
6-10%
18%
2130%
12%
11-20%
12%
Less than
5%
47%
6-10%
18%
Source: CLSA
Page 25
SKU count and merchandise selection
What are the three top reasons you have shopped on foreign e-commerce sites?
100
90
Indonesia
(%)
80
86
80
60
40
39
37
40
15
20
Greater
Greater trust Greater trust
product
in the quality
in the
variety than
of the
reliability of
domestic
products
delivery
online stores
(%) 82
Cheaper
prices
Easier to pay Other (please
specify)
Philippines
80
7
60
(%)
81
Cheaper
prices
Easier to pay Other (please
specify)
Thailand
77
53
55
50
43
40
40
28
30
20
Cheaper
prices
28
30
9
10
Greater
Greater trust Greater trust
product
in the quality
in the
variety than
of the
reliability of
domestic
products
delivery
online stores
Greater
Greater trust Greater trust
product
in the quality
in the
variety than
of the
reliability of
domestic
products
delivery
online stores
70
62
60
0
0
90
77
70
50
20
10
10
80
30
30
30
90
64
57
50
52
50
70
60
70
0
72
70
73
Malaysia
(%)
Easier to pay Other (please
specify)
20
6
10
0
Greater
Greater trust Greater trust
product
in the quality
in the
variety than
of the
reliability of
domestic
products
delivery
online stores
Cheaper
prices
Easier to pay Other (please
specify)
Note: Charts measure the percentage of occurrence in top three reasons. Source: CLSA
Page 26
Import duties, taxes and online prices
Duties + taxes on a US$100 cotton-knit dress manufactured in and imported from China
- Excl freight + insurance
(US$)
Product value
at the port
Import duty Import income
tax
Goods &
services tax
(GST)
Value-added
tax (VAT)
Total duties
Total landed
cost
Tax and duty
mark-up (%)
Indonesia
100
15.0
8.6
-
11.50
35.10
135.10
35.1
Malaysia
100
-
-
6.0
-
6.00
106.00
6.0
Philippines
100
15.0
-
-
13.80
28.80
128.80
28.8
Thailand
100
30.0
-
-
9.10
39.10
139.10
39.1
Vietnam
100
20.0
-
-
12.00
32.00
132.00
32.0
Singapore
100
-
-
-
-
-
100.00
0.0
Duties + taxes on a US$100 pair of Nike Air Jordans manufactured in and imported from China
- Excl freight + insurance
(US$)
Product value
at the port
Import duty Import income
tax
Goods &
services tax
(GST)
Value-added
tax (VAT)
Total duties
Total landed
cost
Tax and duty
mark-up (%)
Indonesia
100
20.0
9.00
-
12.00
41.00
141.00
41.0
Malaysia
100
-
-
6.0
-
6.00
106.00
6.0
Philippines
100
15.0
-
-
13.80
28.80
128.80
28.8
Thailand
100
30.0
-
-
9.10
39.10
139.10
39.1
Singapore
100
-
-
-
-
-
100.00
0.0
Source: Duty Calculator
Page 27
Import duties, taxes and online prices
The lowest online price¹ available across multiple Asean sites vs Taobao/Tmall in China,
Flipkart in India and Amazon in the USA
(US$)
Samsung
mobile phone
Ray-Ban
sunglasses
NIKE
running shoes
Xiaomi
mobile phone
Oral-B electrical
toothbrush
Levi's jeans
Indonesia
686
112
48
105
52
20
Malaysia
622
81
60
88
38
39
Philippines
746
101
117
119
68
86
Thailand
828
112
81
141
57
34
China
920
109
100
109
22
70
India
842
123
n.a.
92
n.a.
42
USA
722
79
100
n.a.
26
20
¹ Lowest price highlighted in box. Source: Online retailer websites
Online price range across multiple Asean sites vs Taobao/Tmall in China,
Flipkart in India and Amazon in the USA
(US$)
Samsung
mobile phone
Ray-Ban
sunglasses
NIKE
running shoes
Xiaomi
mobile phone
Oral-B electrical
toothbrush
Levi's jeans
686-1,013
112-215
48-98
105-130
52
20-72
622-851
81-202
60-92
88-132
39-63
39-87
746-1,013
101-260
117
119
68
86-97
828-943
112-226
81-152
141-149
57
34-95
920
109-247
100-143
109-117
22-31
70-98
India
842-870
123
-
92
-
42-55
USA
722-825
79-150
100-249
-
26
20-60
Indonesia
Malaysia
Philippines
Thailand
China
Note: lowest range in box. Source: Online retailer websites
Page 28
Private/direct equity driver
Total number of internet related private/
direct-equity deals, 3Q13-2Q15
Total number of private/direct-equity,
internet deals by Asean market
160
(No.)
10
140
136
9
122
120
(No.)
Indonesia
Malaysia
Philippines
Thailand
9
8
8
7
100
6
6
80
5
5
60
39
40
39
4
3
3
20
12
7
2
2
Singapore
Thailand
Philippines
Malaysia
Indonesia
India
China
3
12
0
Source: CLSA, Techlist, TechinAsia, e27, CrunchBase, AngelList
5
1
1
0
000
3Q13
1
3
22
2
1
0
4Q13
2
1
0
1Q14
2
2Q14
3
2
2
1
11
4Q14
1Q15
1
1
0
3Q14
Source: CLSA, Techlist, TechinAsia, e27, CrunchBase, AngelList
Page 29
2Q15
Short/medium-term consumption conditions
Economic forecasts for the big-four Asean markets from the CLSA economics team
2012
2013
2014
15CL
16CL
Indonesia
5.5
5.4
5.3
4.5
5.0
Philippines
6.6
5.6
5.4
5.6
6.1
Malaysia
8.3
7.2
7.0
6.0
3.6
Thailand
6.3
0.8
0.6
1.8
3.5
Indonesia
6.0
5.6
5.0
4.7
5.3
Philippines
6.7
7.1
6.1
5.7
7.0
Malaysia
5.5
4.7
6.0
4.8
4.2
Thailand
7.3
2.8
0.9
2.8
3.7
Private consumption growth (%)
Real GDP growth (%)
Year end exchange rate
Indonesia
Rp/US$
9,670
12,189
12,440
13,975
14,250
Philippines
P/US$
41.19
44.41
44.62
47.00
47.75
Malaysia
RM/US$
3.06
3.28
3.50
4.20
4.35
Thailand
Bt/US$
30.59
32.86
32.90
36.10
38.00
Source: CLSA
Page 30
Different business models vs China
Much more use of
consignment models
Larger share of logistics
responsibilities resting
with merchant vendors
for first-party sales
Greater marketplace
engagement from the
platform operator
Large numbers of Asean online retailers with
first-party sales have a consignment component
Market/company
Business model
Consignment sales
Berrybenka
100% B2C direct sales
70% consignment
Bilna
100% B2C direct sales
10% consignment
Blibli
100% B2C direct sales
70% consignment
Bobobobo
On the shopping side: 100% B2C direct sales 100% consignment
MatahariMall
95% B2C marketplace; 5% direct sales
None
Tokopedia
100% C2C marketplace
None
Zalora Indonesia
Direct sales + B2C marketplace
Sizeable
Hishop
100% direct sales
Majority
iPmart Malaysia
100% direct sales
None
Lelong
100% B2C marketplace
None
Rakuten
100% B2C marketplace
None
Youbeli
100% B2C marketplace
None
Zalora Malaysia
Direct sales + B2C marketplace
Sizeable
For the general merchandise portion: 100%
direct sales
70% consignment
Indonesia
Malaysia
Thailand
Central Online (COL)
HomePro online
100% direct sales
(www.directtoshop.com)
50% consignment
Zalora Thailand
Sizeable
Direct sales + B2C marketplace
Source: Company interviews
Page 31
Consolidation likely
How did your online retail spending break down over the last year?
Malaysia
Indonesia
Lazada
Tokopedia
Tokobagus (or OLX)
Traveloka
Other (please specify)
Qoo10 Indonesia
Kaskus
Groupon Indonesia
Elevenia
Zalora
Instagram
eBay (overseas site)
Berniaga
Bukalapak
Tiket
Bhinneka
Agoda (overseas site)
Lionair
Aliexpress (overseas site)
Rakutan Belanja Online
Blibli
Dinomarket
Amazon (overseas site)
Booking.com (overseas site)
Lamido
Bhinneka
Berrybenka
Bilna
Nusatrip
Indonetwork
IndoTrading
HiJup
23.17
9.85
9.27
6.18
5.41
5.02
4.44
4.05
3.86
3.67
3.67
3.09
2.51
2.51
1.93
1.35
1.35
1.16
1.16
0.97
0.97
0.97
0.77
0.77
0.58
0.39
0.39
0.39
0.19
5
21.74
AirAsia.com
15.50
Other (please specify)
13.99
Lelong.my
12.67
Zalora
10.59
Agoda (overseas site)
6.99
Booking.com
3.97
ebay (overseas site)
3.78
Qoo10
3.40
eBay Malaysia
3.21
Amazon (overseas site)
2.08
Aliexpress (overseas site)
1.13
Youbeli
0.38
Easy.my
(%)
0
Lazada
10
15
20
25
0.38
Ipmart.com
(%)
0.19
5
0
10
Lazada
35.73
Zalora
4.19
eBay (overseas site)
eBay Philippines
3.99
Agoda (overseas site)
4.26
3.89
3.89
Bigc.co.th
3.19
Agoda (overseas site)
1.60
Tarad-Rakutan
Booking.com (overseas site)
1.60
iTrueMart
1.60
Booking.com (overseas site)
Metro Mall
4.81
Ensogo
eBay (overseas site)
AirAsia.com
6.85
Zalora
6.79
4.39
Amazon (overseas site)
10.19
AirAsia.com
9.58
Ayos Dito
12.96
Others (please specify)
10.58
Others (please specify)
33.52
Weloveshopping
15.17
Sulit.com.ph or OLX.com.ph
0.60
3.15
2.96
2.41
2.22
Cdiscount
1.85
1.85
Aliexpress (overseas site)
0.40
Pantipmarket.com
HalloHalloMall
0.20
Amazon (overseas site)
1.85
TipCP
0.20
Central.co.th
1.67
Lamido.com.ph
0.20
Aliexpress (overseas site)
(%)
Widget City
0
5
10
15
25
Thailand
Philippines
Lazada
Cebu Pacific
20
15
20
25
30
35
40
1.30
Munkong Gadget
(%)
0.37
0
5
10
15
20
25
Note: Charts measure the allocation of first rank across companies. Source: CLSA
Page 32
30
35
40
Consolidation likely
How many online retail sites have you bought from over the past year?
Indonesia
6 sites or
more
10%
5 sites
7%
Malaysia
6 sites or
more
10%
1 site
13%
4 sites
10%
3 sites
28%
1 site
8%
2 sites
29%
4 sites
13%
2 sites
32%
3 sites
33%
Philippines
6 sites or
more
5 sites 8%
6%
1 site
17%
4 sites
12%
3 sites
28%
5 sites
7%
2 sites
29%
Thailand
6 sites or
more
16%
5 sites
5%
1 site
9%
2 sites
28%
4 sites
12%
3 sites
30%
Source: CLSA
Page 33
Offline retailers - The online challenge
Offline sales cannibalisation
Discounted prices and margin pressure
Offline store-opening opportunity overstated
Profit focus can be a disadvantage
Indonesia and Thailand more proactive vs China . . .
. . . but new online ventures will initially be loss-making
Sales cannibalisation of offline operations
Channel integration will be a major challenge
China hangover
Page 34
Offline retailers - The online challenge
Listed offline retailers¹: 2014 margins and returns on capital
25
(%)
China
Asean big-four markets
20.2
20
18.8
15
13.0
11.8
10
10.2
8.6
5
0
Ebitda margin
ROE
ROIC
¹ CLSA coverage universe. Source: CLSA
Page 35
Asean e-commerce & logistics: Valuations
Name
Code
Share
price (loc)
Currency
Mkt cap
(US$bn)
Year
end
EPS growth
(% YoY)
15F
16F
15F
PE
(x)
16F
16F
EV/
Ebitda
(x)
16F
div
yield
(%)
16F
ROIC
(%)
Rec
Asean online retailers
COL PCL
COL TB
40.50
Bt
0.36
Dec
11
26
26.6
21.2
11.1
1.8
na
No rec
Ensogo
E88 AU
0.10
A$
0.05
Dec
87
81
na
na
na
na
na
No rec
Rocket Internet
RKET GR
23.79
€
4.82
Dec
(757)
36
na
na
na
0.0
na
No rec
Asean logistics companies
GD Express
GDX MK
0.91
RM
0.25
Jun
(8)
50
44.0
29.3
19.8
1.1
na
No rec
Pos Malaysia
POSM MK
3.83
RM
0.48
Mar
na
na
22.4
15.8
5.8
3.4
na
No rec
SingPost
SPOST SP
1.78
S$
2.72
Mar
4
13
25.0
22.2
16.5
3.9
12.1
BUY
Code
Share
price
Currency
Price performance (%)
Rec
1M
3M
1Y
3Y
Asean online retailers
COL PCL
COL TB
40.50
Bt
(13)
(32)
(20)
18
No rec
Ensogo
E88 AU
0.10
A$
(38)
(44)
(65)
na
No rec
Rocket Internet
RKET GR
23.79
€
(30)
(44)
na
na
No rec
Asean logistics companies
GD Express
GDX MK
0.91
RM
(38)
(41)
(46)
175
No rec
Pos Malaysia
POSM MK
3.83
RM
(11)
(17)
(21)
27
No rec
SingPost
SPOST SP
1.78
S$
(7)
(4)
3
69
BUY
Prices as of 25 Aug 2015. Source: CLSA, Bloomberg estimates for non-rated company data
Page 36
Indonesia, Malaysia: Offline valuations
Name
Code
Share
price (loc)
Currency
Mkt cap
(US$bn)
Year
end
EPS growth
(% YoY)
PE
(x)
15F
16F
15F
16F
16F
EV/
Ebitda
(x)
16F
div
yield
(%)
16F
ROIC
(%)
Rec
Asean offline retailers
Indonesia
Ace Hardware
ACES IJ
580.00
Rp
0.71
Dec
9
17
16.4
14.0
9.6
1.2
27.0
O-PF
Hero
HERO IJ
1,350.00
Rp
0.40
Dec
na
na
na
na
na
na
na
No rec
Matahari Dept Store
LPPF IJ
15,650.00
Rp
3.10
Dec
32
21
23.6
19.5
14.2
2.6
na
No rec
Matahari Putra Prima
MPPA IJ
2,130.00
Rp
0.80
Dec
7
23
19.4
16.2
9.4
1.5
na
No rec
Mitra Adiperkasa
MAPI IJ
3,800.00
Rp
0.45
Dec
52
120
58.3
26.5
7.9
0.3
6.3
U-PF
Ramayana Lestari
RALS IJ
585.00
Rp
0.30
Dec
(18)
16
14.3
12.3
4.0
4.0
na
No rec
7-Eleven
SEM MK
1.50
RM
0.43
Dec
30
18
22.6
19.2
8.4
2.3
348.7
U-PF
Aeon
AEON MK
2.79
RM
0.92
Dec
1
7
18.2
17.1
7.1
1.9
na
No rec
Amway
AMW MK
9.81
RM
0.38
Dec
(5)
4
17.0
16.4
9.3
6.0
na
No rec
Bonia
BON MK
0.69
RM
0.13
Jun
259
16
11.2
9.7
5.2
2.5
na
No rec
Caring Pharmacy
CARING MK
1.05
RM
0.06
May
(15)
15
17.0
15.4
6.9
1.6
na
No rec
Kamdar
KGMB MK
0.42
RM
0.02
Dec
na
na
na
na
na
na
na
No rec
Padini
PAD MK
1.32
RM
0.20
Jun
(4)
13
9.9
8.8
4.8
8.3
30.0
O-PF
Parkson Holdings
PKS MK
1.17
RM
0.27
Jun
4
6
9.0
8.5
3.4
6.0
na
No rec
Poh Kong
PKH MK
0.44
RM
0.04
Jul
na
na
na
na
na
na
na
No rec
Malaysia
Prices as of 25 Aug 2015. Source: CLSA, Bloomberg estimates for non-rated company data
Page 37
Philippines, Thailand, S’pore: Offline valuations
Name
Code
Share
price (loc)
Currency
Mkt cap
(US$bn)
Year
end
EPS growth
(% YoY)
PE
(x)
15F
16F
15F
16F
16F
EV/
Ebitda
(x)
16F
div
yield
(%)
16F
ROIC
(%)
Rec
Philippines
Philippine Seven Corp.
SEVN PM
98.00
P
0.96
Dec
na
na
na
na
na
na
na
No rec
Puregold
PGOLD PM
30.60
P
1.81
Dec
12
9
16.6
15.3
8.0
1.4
13.3
BUY
Robinsons Retail
RRHI PM
66.00
P
1.95
Dec
29
19
19.6
16.5
8.8
1.0
14.4
BUY
SM Investments
SM PM
890.00
P
15.28
Dec
10
13
22.7
20.1
9.2
1.3
22.1
O-PF
Store Specialists Inc
SSI PM
6.30
P
0.45
Dec
(9)
23
16.7
13.6
5.9
0.0
12.5
U-PF
185.00
Bt
4.28
Dec
12
23
18.8
15.3
8.7
2.0
17.3
U-PF
Thailand
Big C Supercenter
BIGC TB
Central Pattana
CPN TB
42.00
Bt
5.29
Dec
14
18
22.6
19.2
12.8
2.1
9.5
BUY
CP All
CPALL TB
46.50
Bt
11.97
Dec
40
34
30.1
22.5
14.5
2.2
11.9
BUY
HomePro
HMPRO TB
6.50
Bt
2.40
Dec
7
10
24.2
22.0
11.4
0.5
12.9
U-PF
Makro
MAKRO TB
38.50
Bt
5.18
Dec
27
24
29.8
23.9
15.5
3.8
41.5
U-PF
Robinson Dept Store
ROBINS TB
38.00
Bt
1.25
Dec
14
13
19.5
17.2
7.5
2.3
17.9
U-PF
Siam Global
GLOBAL TB
8.95
Bt
0.94
Dec
10
21
43.7
36.1
16.9
0.1
5.1
U-PF
Dairy Farm
DFI SP
6.67
US$
9.02
Dec
(12)
12
20.0
17.9
10.7
4.2
49.1
U-PF
Jardine C&C
JCNC SP
27.21
S$
7.70
Dec
(12)
8
10.0
9.2
4.6
4.2
15.3
O-PF
Singapore
Prices as of 25 Aug 2015. Source: CLSA, Bloomberg estimates for non-rated company data
Page 38
Indonesia, Malaysia: Offline price perf
Code
Share
price
Currency
Price performance (%)
Rec
1M
3M
1Y
3Y
Asean offline retailers
Indonesia
Ace Hardware
ACES IJ
580.00
Rp
(9)
(16)
(40)
(5)
O-PF
Hero
HERO IJ
1,350.00
Rp
(25)
(33)
(46)
(54)
No rec
Matahari Dept Store
LPPF IJ
15,650.00
Rp
(10)
(10)
(2)
na
No rec
Matahari Putra Prima
MPPA IJ
2,130.00
Rp
(28)
(45)
(29)
99
No rec
Mitra Adiperkasa
MAPI IJ
3,800.00
Rp
(19)
(30)
(37)
(44)
U-PF
Ramayana Lestari
RALS IJ
585.00
Rp
(16)
(17)
(41)
(44)
No rec
7-Eleven
SEM MK
1.50
RM
(7)
(8)
(16)
na
U-PF
Aeon
AEON MK
2.79
RM
(8)
(11)
(29)
16
No rec
Amway
AMW MK
9.81
RM
(6)
(10)
(16)
(0)
No rec
Bonia
BON MK
0.69
RM
(27)
(35)
(48)
11
No rec
Caring Pharmacy
CARING MK
1.05
RM
(9)
(4)
(42)
na
No rec
Kamdar
KGMB MK
0.42
RM
(7)
(1)
(39)
13
No rec
Padini
PAD MK
1.32
RM
(2)
(4)
(32)
(43)
O-PF
Parkson Holdings
PKS MK
1.17
RM
(13)
(39)
(58)
(68)
No rec
Poh Kong
PKH MK
0.44
RM
(7)
(10)
(5)
(1)
No rec
Malaysia
Prices as of 25 Aug 2015. Source: CLSA, Bloomberg
Page 39
Philippines, Thailand, S’pore: Offline price perf
Code
Share
price
Currency
Price performance (%)
Rec
1M
3M
1Y
3Y
Philippines
Philippine Seven Corp.
SEVN PM
98.00
P
(8)
(15)
8
92
No rec
Puregold
PGOLD PM
30.60
P
(18)
(21)
(12)
9
BUY
Robinsons Retail
RRHI PM
66.00
P
(17)
(17)
3
na
BUY
SM Investments
SM PM
890.00
P
(2)
(1)
12
58
O-PF
Store Specialists Inc
SSI PM
6.30
P
(30)
(38)
na
na
U-PF
185.00
Bt
(1)
(9)
(23)
(2)
U-PF
Thailand
Big C Supercenter
BIGC TB
Central Pattana
CPN TB
42.00
Bt
(8)
(3)
(13)
60
BUY
CP All
CPALL TB
46.50
Bt
2
3
2
40
BUY
HomePro
HMPRO TB
6.50
Bt
6
(2)
(33)
8
U-PF
Makro
MAKRO TB
38.50
Bt
1
(6)
(4)
114
U-PF
Robinson Dept Store
ROBINS TB
38.00
Bt
(8)
(13)
(32)
(38)
U-PF
Siam Global
GLOBAL TB
8.95
Bt
18
10
(22)
11
U-PF
Dairy Farm
DFI SP
6.67
US$
(23)
(28)
(36)
(41)
U-PF
Jardine C&C
JCNC SP
27.21
S$
(9)
(30)
(37)
(40)
O-PF
Singapore
Prices as of 25 Aug 2015. Source: CLSA, Bloomberg
Page 40
Upcoming CLSA Forums
Investors' Forum 2015
14-18 September, Hong Kong
India Forum 2015
16-18 November, Gurgaon
Japan Forum 2016
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9-11 May, Chengdu
Page 41
Important notices
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(Thailand) Limited; in Taiwan by CA Taiwan and in United Kingdom by CLSA (UK).
United States of America: Where any section of the research is compiled by US analyst(s), it is distributed by CLSA Americas. Where any section is compiled by non-US analyst(s), it is distributed into the United States by CLSA solely
to persons who qualify as "Major US Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934 and who deal with CLSA Americas. However, the delivery of this research report to any person in the
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transaction in any security mentioned herein should do so by contacting CLSA Americas. Canada: The delivery of this research report to any person in Canada shall not be deemed a recommendation to effect any transactions in the
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document is directed at persons having professional experience in matters relating to investments as defined in Article 19 of the FSMA 2000 (Financial Promotion) Order 2005. Any investment activity to which it relates is only
available to such persons. If you do not have professional experience in matters relating to investments you should not rely on this document. Where the research material is compiled by the UK analyst(s), it is produced and
disseminated by CLSA (UK). For the purposes of the Financial Conduct Rules this research is prepared and intended as substantive research material.
Singapore: This publication/communication is distributed for and on behalf of CLSA Limited (for research compiled by non-US and non-Taiwan analyst(s)), CLSA Americas (for research compiled by US analyst(s) and/or CA
Taiwan (for research compiled by Taiwan analyst(s)) in Singapore through CLSA Singapore Pte Ltd solely to persons who qualify as Institutional, Accredited and Expert Investors only, as defined in s.4A(1) of the Securities and
Futures Act. Pursuant to Paragraphs 33, 34, 35 and 36 of the Financial Advisers (Amendment) Regulations 2005 with regards to an Accredited Investor, Expert Investor or Overseas Investor, sections 25, 27 and 36 of the
Financial Adviser Act shall not apply to CLSA Singapore Pte Ltd. Please contact CLSA Singapore Pte Ltd in connection with queries on the report. MCI (P) 094-11-2014
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EVA® is a registered trademark of Stern, Stewart & Co. "CL" in charts and tables stands for CLSA/CLSA Americas/CA Taiwan estimates unless otherwise noted in the source.
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