Session 3 Opportunities & Threats

7/24/2019 Session 3 Opportunities & Threats

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E-Commerce

Opportunities &Threats



The opportunities created by e-commerce

• Vastly increased market both nationally andinternationally allowing businesses to overcomegeographical limitations with reduced investment

• Target diferent market segments•

The Long Tail• Whilst physical retail is driven by branding and

relationships, online retail is also driven by tracrom search engines

•

n some markets and industries, e-commerce hasreduced barriers to entry creating opportunities ornew businesses to enter the market

• !-commerce has acilitated the emergence o pureplay "etailers# such as $cado and Wiggle



The relentless growth o e-commerce







• %&' o the worldsinternet users live in (sia

• )y &*+, ./0' o world-wide )&1 e-commercesales will come rom(sia-2aci3c

• )y &*+0, estimated e-

commerce sale in (sia2aci3c 4)illions5 6+*7&/.• out o every +* dollars

spent online in (sia

come rom 1hina




• $nly ' o 89businesses tradingdigitally abroad aredoing so in the locallanguage

• 0' o 89 businessesattempting to tradeinternationally haveonly one centralwebsite which ismaking the buyinge:perience conusingand uneasible or










• The rapid e:pansion o cycling,triathlon, running and swimmingetailer Wiggle is an ama;ing

success story• Wiggle was launched in +...

and is now the 89#s number oneonline cycle shop and the 3th

most popular online shop• <ales in &*+% were =+m, a +.'increase rom &*+

• n &**> ? &/7' sales came romoverseas markets/ n &*+% 7%'o sales came rom overseas






Wiggles Strategies forSuccess:

•

Website localisation eaturing translated te:t andlocal currency prices• 1ountry speci3c popular payment options• +& websites ? +* diferent languages• @ocus on mcommerce• (n email contact centre with a team o *

translators to respond to customer Aueries invirtually any language

• @ocus on Auicker order processing and speed o

delivery resulting in Wiggle being able to sendroducts rom the 89 to Belbourne uicker than






The threats posed by e-commerce



Th h d b




• n &*+& (ma;on launched (ma;on<upply ofering 7**,*** products

• n &*+% (ma;on launched (ma;on

)usiness with a catalogue o over &/7million• )ulk discounts and business-only pricing• )usiness lines o credit• Cuge concern over the potential impact

on (merica#s 7,*** distributioncompanies especially as >' o )&)

purchases in &*+% were made online, anincrease o 70' rom &*+

Th th t d b







Th th t d b




Th th t d b



The threats posed byecommerce



2utting it all into conte:t

• Dlobally, although the ecommerce markethas grown e:ponentially over the last twoyears, online retail still only accounts or

around 7/.' o total retail sales and this isonly orecast to increase to >/>' by &*+>, araction o overall retail sales

• n the 89 however, ecommerce accounts or

around +7/&' o all retail sales and this isorecasted to increase to around +>' by&*+>

• Travel agents are still responsible or almost

00' o all cruise bookings, 77' o air travel














The Drocery <ector



The Drocery <ector

• (lthough e-commerce and online shopping haslong threatened bricks-and-mortar retailers inother sectors so ar it has had less impact on oodretailers

• Cowever, online grocery is coming o age andonline grocers have already captured around 7'o the market in the 89

• 89 Drocery market was worth =+00/7 billion in

the year to Barch +st &*+7/ ( +/0' increase on&*+7

• 89 online grocery sales are orecast to reach=+0/&bn by &*&*

• 89#s online grocery market is the worlds second

Th D < t ( i 2 i3



The Drocery <ector ? (sia-2aci3cand 1hina

• 1ontinued increases in mobile adoption andbroadband penetration, particularly in thedeveloping regions have boosted online grocerysales

•

(sia-2aci3c consistently e:ceeds global average oall online retailing

• 0' o people within (sia-2aci3c and %' in1hina use online ordering and delivery service

• )etween &*+ and &*+%, e-commerce salesincreased by %*'

Why is online grocery shopping here soprevalent when compared to the rest of the

world?

Th D < t ( i 2 i3




• Eapid urbanisation• ncredibly high population density• Eelatively low labour costs• )ooming smart phone ownership• n 1hina, saety concerns aroundlocally sourced ood and drinkhave driven consumers in searcho high Auality goods online

Th D < t ( i 2 i3






The Drocery <ector - Bodels











The Drocery <ector ? @uture Trends

• !-commerce will grow butbrick and mortar willcontinue to dominate

• +' o consumers believe

physical grocery shopping isan enFoyable e:perience

• The maFority o customerswill still continue to shop orthe bulk o their purchases instore

• <uccessul grocery retailerswill engage and wincustomers through omni-

channel 4bricks and mortar,



Themes or !valuation

•

!-commerce signi3cantly reduces barriers toentry increasing the amounts o new entrants

• The 4continued5 growth o e-commerce willinevitably lead to a decline o "bricks and

mortar#• To be successulG competitive a business must

have an e-commerce platormG the ability to sellonline

• n the 89, online sales, on average, haveincreased by around +&' 4&*+ to &*+%5whereas retail sales have increased by around'

• There is a growing disparity between online



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Session 3 Opportunities & Threats