PwC makes recommendations for the future of ASEAN

Source: PwC Growth Markets Centre The Future of ASEAN - Time to Act web page. ASEAN's timeline since inception, by GDP, from the World Economic Outlook database, IMF, October 2017. 2018 figures are available.

PwC’s Growth Markets Centre has launched its 2018 annual report, The Future of ASEAN – Time to Act, during the official opening of PwC Singapore’s new office premises at Marina One on May 11.

The Future of ASEAN – Time to Act provides a view of the policies that the Association of Southeast Asian Nations (ASEAN) governments ought to consider to ensure the region continues to attract investment and strategies for future growth across seven sectors – automotive, financial services, consumer goods, medical devices, refined fuels, telecommunications and transportation.

2017 marked the 50th anniversary of ASEAN, comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. ASEAN has not only doubled its membership since inception, but has also successfully weathered both the Asian financial crisis of 1997 and the global economic crisis of 2008–2009 to become the sixth-largest economy globally. 

However, a number of challenges, including a slowdown in short-term economic growth, weak workforce productivity, an ageing population, an over dependence on external trade and major voids in infrastructure and national institutions raise questions about the sustainability of ASEAN’s growth story.

The Future of ASEAN – Time to Act presents a view as to how ASEAN needs to progress from an era of passive growth, and take more proactive measures to continue to attract investments, develop institutions, and evolve its people and technological capabilities. The private sector will also have a major role to play in strengthening the region’s growth prospects over the coming years, but this will require companies not only to provide new products and services, to meet varying consumer preferences, but also to work more closely with governments to develop the right conditions for businesses to prosper.

Going forward, PwC sees growth opportunities for the private sector across a number of industries in ASEAN. However, given the dynamics and challenges of ASEAN, companies will need to adopt innovative strategies to succeed, the consultancy said. Common themes in the strategies include:

Localisation

Transition to more localised sourcing, productions and sales through the development of regional hubs to serve ASEAN consumers. (e.g. automotive and medical devices). 

Digitalisation

Adoption of digital capabilities to improve the production and transportation of goods and services, as well as the communication with consumers and businesses (e.g. financial services, consumer goods and telecommunications).

Partnerships and alliances

Development of partnerships and alliances, particularly cross sector and with industry disruptors (e.g. fintech), as companies try to stay relevant and competitive whilst meeting consumers expectations in a profitable manner (e.g. refined fuels and transportation).

David Wijeratne, Partner and PwC’s Growth Markets Centre Leader says, “ASEAN can be proud of what it has achieved in the past 50 years, but the time of passive growth is over. Global growth needs ASEAN to fulfil its potential and grab hold of its future, now is the time to act.”

PwC’s Growth Markets Centre is a global team which supports companies navigating the ever changing complexities of entering and expanding into and from developing markets. 

Explore:

Download the Future of ASEAN – Time to Act report

PwC's new office in Singapore is on levels nine to 13 at Marina One.

Sales for Ramadhan peak two weeks before Raya

Source: Criteo Ramadan 2018 report.
Ramadhan graphic.

- The peak shopping period for Ramadhan 2017 was about two weeks before Eid al-Fitr

- Health/beauty and electronics categories saw the biggest sales uplift in Singapore, whereas Southeast Asia (SEA) saw the biggest sales uplift from health/beauty and toys/games. 

- More retail shoppers in SEA are shopping on mobile

Criteo, the commerce marketing technology company, has released seasonal data for Ramadhan from 2017 to help commerce providers better engage shoppers in anticipation of the festive season. According to the company, retailers should intensify their advertising campaign efforts during specific periods in Ramadhan to gain early visibility, increase engagement with shoppers and enhance sales.

The analysis revealed strong online sales in the Southeast Asia (SEA) region in the lead up to and during Ramadhan, which took place from 26 May to 24 June in 2017. Ramadhan 2018 begins 17 May, and ends 14 June. In 2017 online retail sales were at its peak on 8 June, about two weeks before Eid al-Fitr 2017 (25 June). Eid is on 15 June for 2018. 

A maximum of 52% increase in online retail sales was observed during this period in 2017, indicating exactly when shoppers are more compelled to spend for the season. Online travel sales also saw a gradual rise during Ramadhan, with the biggest uplift seen two days after Eid al-Fitr – a 14% uplift.

The top performing sub-verticals in the SEA region, based on uplifts in sales are:

- Toys and games – 62% (Singapore: 98%)

- Health and beauty – 53%(Singapore: 143%)

- Electronics – 42% (Singapore: 99%)

- Home and living – 42% (Singapore: 91%)

The trend is similar elsewhere. Shoppers in the Middle East typically shop a couple of weeks before Ramadhan begins as well, Criteo said. This trend continues to escalate during Ramadjan, where the highest uplift in sales was observed one to two weeks before Eid al-Fitr. 

Consumer electronics, fashion, and food and travel lead the way as the strongest performing sub-verticals, but more people are also shopping online for home and living goods, health and beauty products, and groceries. A difference between the region and SEA was that travel sales saw a surge in the last week of Ramadhan as many in the Middle East tend to travel during Eid al-Fitr, which also corresponds with three-month summer holidays in the region.

“The global halal industry is projected to surpass US$1 trillion in size by 2030*. Given that Ramadhan is a key festival in the region, SEA is set to contribute significantly to this market growth. We are seeing a rise in variety and awareness of halal products amongst Muslim and non-Muslim shoppers. Retailers can stand out by bidding more aggressively at the right time to boost online engagement and transactions,” said Alban Villani, GM, Southeast Asia, Hong Kong and Taiwan, Criteo.

Criteo’s findings also highlighted the need for retailers to optimise their mobile apps and sites for increased retail sales and travel bookings during Ramadhan. More retail shoppers in SEA are shopping on mobile, as seen by the maximum uplift of mobile apps at 64% (Singapore: 61%) and 52% (Singapore: 46%) on the mobile web. Travel sales are no exception, with SEA noting a 28% maximum uplift in sales for mobile apps three days after Eid-al-Fitr and the mobile web four days after Eid-al-Fitr respectively. 

For Singapore, the maximum uplift in sales for mobile apps was close to three weeks after Eid-al-Fitr at 20%, while maximum uplift in mobile web occurred slightly over two weeks after Eid-al-Fitr at 33%.

“Millennials are a rising demographic within the Islamic community*. They are tech-savvy and use social media to regularly connect with their favourite brands. With Millennials having a greater inclination towards discovering new online products and purchasing them during Ramadhan, this season presents retailers with a key opportunity to engage both first-time and existing buyers. This sets the platform for further engagement beyond the Ramadhan season, through our commerce marketing technology, to sustain brand loyalty and encourage repeat purchases. Our findings reinforce that mobile is an imperative channel for retailers to effectively reach out to Millennials,” said Villani.

Criteo’s findings were derived through an analysis of more than 44 million retail shopping transactions and more than 28 million travel sales transactions on desktops and mobile devices from 57 major advertisers across the SEA region.

Explore:

Read the Criteo report for Ramadhan in SEA 2018

*State of the Global Islamic Economy 2017/18, Thomson Reuters

Singapore Committee on Future Economy outlines recommendations for a future-ready Singapore

Source: CFE infographic. What individuals and enterprises can do to prepare for the future.

 Build an open and connected economy with deep capabilities
 Opportunities with sustainable wage growth for all Singaporeans

According to the Committee on Future Economy (CFE), Singapore is well-positioned to tap into growth sectors fuelled by the rise of the middle-class and urbanisation in Asia, particularly in finance, hub services, logistics, as well as urban solutions. New technologies can also contribute to productivity gains in industry sectors such as advanced manufacturing, the committee has said.

Over the past year, the committee, five subcommittees and working groups held in-depth discussions, deep dives, meetings and focus groups involving more than 2,000 people. It consulted over 9,000 stakeholders, including trade associations and chambers (TACs), public agencies, unions, companies, executives, workers, academics, educators, and students before coming up with its report, which has been submitted to the Prime Minister of Singapore.

The recommendations take into account the significant structural shifts in the external environment that have occurred over in the last few years. Global growth has been subdued and is expected to be lower than in the previous decade. Global productivity growth has been sluggish, though technology can still  generate new waves of innovation and breakthroughs.

Growth in the US has recovered since the global financial crisis, but not to pre-crisis levels. Europe continues to face structural problems, including high youth unemployment. Asia remains a bright spot, with some economies growing rapidly.

The CFE’s work builds on the 2010 Report of the Economic Strategies Committee (ESC), but has had to adjust for the new world reality. The CFE re-examined Singapore’s operating assumptions and model and identified seven mutually-reinforcing strategies that will maximise the chances of Singapore’s success:

(i) Deepen and diversify international connections
(ii) Acquire and utilise deep skills
(iii) Strengthen enterprise capabilities to innovate and scale up
(iv) Build strong digital capabilities
(v) Develop a vibrant and connected city of opportunity
(vi) Develop and implement industry transformation maps (ITMs)
(vii) Partner each other to enable innovation and growth

The Co-Chair of the CFE and Singapore Minister for Finance Heng Swee Keat said: “The CFE recommends that, in the face of unprecedented global challenges and greater uncertainty, our response must be to keep Singapore relevant to the world."

Co-Chair of CFE and Minister for Trade and Industry (Industry) S Iswaran added: “The CFE recommendations aim to help our people and our enterprises develop deep capabilities that will enable Singapore to reshape our economy and seize new opportunities at home and globally. Ultimately, our efforts must translate into better opportunities for all Singaporeans, with sustainable wage growth and meaningful careers, and a conducive environment for firms to start, grow and soar.”

Yeoh Oon Jin, Executive Chairman, PwC Singapore commented positively on the strategy. "The report focuses on how Singapore can leverage rapid technological advancement to evolve its established strengths like infrastructure and urban planning, global financial hubbing capability and logistical efficiency to advance growth and development for the future of Singapore. It also has a strong focus on developing talent and networks which are necessary to make it happen. Overall it is a very comprehensive plan to move our nation forward. What is required now is for local companies and individuals to rise to the challenge - to create value through innovation, continuous learning and adaptation," he said.

"The CFE report is an exciting vision, full of good ideas and theory. Execution is now key, and we need a mindset change across Singapore - to fight for free trade, to embrace technology, to be differentiated via new skills, to go beyond Singapore, to partner as government and the private sector, to use our city as an asset. For the plan to succeed, we need all of Singapore to embrace this new way of thinking, living and working," added Richard Skinner, Strategy Leader, PwC Singapore.

The committee was established in January 2016 to address the new challenges that Singapore faces.
The 30-member committee comprises members from different industries that operate in both global and domestic markets, as well as enterprises both large and small. The government will provide its response in the 2017 Budget Speech and Committee of Supply (COS) Debates. In 2016, the COS Debates were in early April while the Budget Speech was delivered in late March.

Interested?

View the CFE report

Explore the complete infographic

Still opportunities for high-yield investments in Asia

A SchrodersTalking Point titled Asia’s ageing population drives demand for dividends by King Fuei Lee, Head of Asia Equities at Schroder Investment Management has noted that changing demographics will create opportunities for dividend investors in Singapore.

According to Lee, Singapore’s population will begin to shrink around 2025 with the current birth rate and without immigration. "By 2030, there will only be 2.1 working-age citizens to support each citizen aged 65 and above. As such, of the 'four Ds' (demographics, deflation, disruption, deleveraging) impacting companies in Asia, we think Demographics will create opportunities for dividend investors," he stated.

The analysis notes that global stock markets have been rocked by short-term volatility, triggered by falling commodity prices and the start of the US Federal Reserve’s hiking cycle. In the long term however the company's views on Asian stocks have not changed, with impact from the “four Ds”.

Opportunities can be found in:

Ageing demand for high yield

Investing in dividend-yielding stocks in a low-yield environment has become almost de rigueur for investors in search of returns in the current environment. The conventional wisdom is that investors all over the world are seeking more lucrative alternatives to the low (or near-zero) interest rates that are being offered on bank deposits.

What is perhaps less well understood is that a high dividend-yielding strategy is often also the preferred choice for an ageing population.

Behavioural economics

Although economics is often referred to as the “dismal science” for its inflexibility to relate to real-life human behaviour, the area of behavioural economics has shed light on a multitude of issues and has often been at the forefront of the most insightful observations about investor habits.

According to the behavioural lifecycle theory, an individual mentally breaks down their wealth into three components:

Current income
Current assets
Future income

At the individual level, the temptation to spend is always greatest for current income, and least for future income. This is especially the case as people age and start to retire. They have a tendency to consume out of dividends received (or current income) rather than from capital gains (or future income). As a result, these investors generally favour high dividend-paying stocks over those that pay lower dividends, which in turn has led to outperformance from the former.

Schroder Investment Management's analysis has found a strong positive relationship between the long-term returns of dividend-yielding strategies in the US and the change in the proportion of older investors. Effectively, the larger the increase in the proportion of older people in the general population, the greater the relative demand for high dividend paying assets.

What this means for Asia

This trend is particularly relevant for countries and territories such as Australia, Hong Kong and Singapore – the traditional bastions of Asian dividend-paying stocks. Although commentators typically follow the market adage that the time for dividend-yielding strategies has passed, but Schroder Investment Management says this is not actually the case.

For the one in three working Singaporean adults who do not plan adequately for retirement*, and long-term investors wondering what to buy in a deflationary world – where rock-bottom interest rates and ageing demographics are the norm – high dividend yielding stocks are looking as ripe as ever for the picking, the company says.

Notes:

*Survey reveals that young Singaporeans have a positive attitude towards financial planning for retirement, NTUC Income, 15 February 2016. http://www.income.com.sg/about-us/press-releases/survey-reveals-that-young-singaporeans-have-a-posi. 

Big gap in health and fitness mobile app market

A report from the Media and Services UX group at Strategy Analytics surveying avid health and fitness consumers using health and/or fitness mobile applications has found that implementing multiple improvements will lead to more useful, usable, and compelling solutions.

Surveying consumers in the US and UK who used at least one health and/or fitness mobile application multiple times per week, Strategy Analytics found that many of these apps catered only had a single focus, such as health (food entry and logging for example), or fitness (tracking a run/walk as an instance). Consumers who were interested in tracking both were forced to seek multiple apps to complement one another, each requiring separate data entry, when what they want is an all-in-one app for health and fitness.

Christopher Dodge, Associate Director, MSX and report author, commented, “As many health and fitness apps currently exist for free, smarter health/fitness app offerings could serve as strong differentiators amongst competing apps and provide an opportunity for a paid health/fitness app – significantly, consumers in this study were willing to pay for this experience.”

Kevin Nolan, VP, UXIP, added, “These apps need to be intelligent enough to learn user behaviour, remind users to interact with the app after a certain amount of time has elapsed, and perhaps more importantly, provide proactive recommendations and suggestions based on user habits and behaviours. This will not only help to motivate the user to achieve their personal goals and adopt a healthier lifestyle far more efficiently, but also enhance the overall user experience of these types of apps.”

Interested?

Buy the report

Wanda Vista brand goes international

Qian Jin, President of luxury hotel chain Wanda Hotels & Resorts, has officially announced the international expansion strategy for its Wanda Vista brand.

The Wanda Vista brand represents the most exclusive five-star plus properties under Wanda Hotels & Resorts, created for guests with a taste for art and culture. With locations in key international cities and designed with strong Oriental influences, the brand advocates dedicated service tailored to the unique needs of each guest.

With plans to expand to overseas markets by 2018, Wanda Vista will also be the company’s first international brand. The first six overseas markets targeted for this expansion include Sydney and theAustralian Gold Coast.

“Wanda Hotels & Resorts is dedicated to its company mission to uphold Chinese values, build mutual respect, and perform beyond expectations. Even as we are shaping this international brand, we hope to stay true to this mission and bring Eastern hospitality to the world,” said Qian.

Wanda Vista hotels will be situated within the most central locations of a city and feature cutting-edge architecture to give it the distinctions of a new local landmark.

“We aim to be the leading hotel choice at each destination, embracing Chinese tradition and values to deliver an outstanding experience for both business and leisure travellers, domestically and internationally,” added Qian.

By the end of 2020, Wanda Hotels & Resorts aims to own and operate over 160 hotels worldwide.

The Wanda Vista brand has been turning heads since the Wanda Vista Taiyuan, modelled after the distinctive traditional Shanxi Qiao family courtyard, opened in 2012. By the end of 2014, there were a total of 10 Wanda Vista hotels operating in major Chinese cities including Shenyang, Yantai, Tianjin, Taiyuan, Lanzhou, Changsha, Kunming, Nanning, Dongguan and Quanzhou. In November this year, another Wanda Vista will open in Hohhot city.

Source: Wanda Vista website. The Wanda Vista Xishuangbanna.

Wanda Vista Resort Xishuangbanna, the company’s first resort hotel, will officially begin operations on September 26, marking an important milestone for Wanda Vista, and kicking off the brand’s dual targets of developing both luxury five-star hotels and resorts. Wanda Vista Resort Xishuangbanna is located in Jinghong city of Xishuangbanna province, a prime location within the holiday destination. The hotel incorporates local architectural influences into its design and uses locally-sourced materials and handcrafted artworks, offering guests with a sense of the local art and culture.

The resort spans a built up area of 46,149 sq m and houses 151 elegantly appointed rooms and suites, as well as luxurious facilities such as meeting rooms, a spa, and a pagoda.

Wanda Hotels & Resorts also donated RMB1 million to the Wanda Children’s Foundation by the China Charity Federation during the announcement.

posted from Bloggeroid

Going mobile-first can be the path to success

Source: Spotify. Kaur.

Spotify launched in Asia with mobile support as a priority, not as an afterthought or nice-to-have, says CommunicAsia2015 speaker Sunita Kaur, Managing Director, Asia, Spotify, as it saw that Asia is a growing mobile-only market. 

The mobile-first freemium strategy has fuelled growth in Spotify’s user base, which subsequently bumped up premium subscriber numbers at an average conversion rate of about 20%, Kaur said.

“We’re so committed to the freemium model on mobile because we completely agree with the labels that subscribers are key to bringing the industry back to health — and we need the free 'funnel' to drive subscription,” said Kaur. "By bringing listeners into our free, ad-supported tier, we migrate them away from piracy, which is rife in this part of the world.”

Ads are a big part of the strategy. In the second quarter of this year, Spotify is announcing the rollout of a new video ad product. Sponsored Sessions give brands ownership of 30 minute ad-free mobile sessions. Users opt-in to an ad-free experience by viewing a 15 or 30 second video on their mobile device.

For Spotify, another advantage of going mobile is the ability to provide personalised recommendations to fans across their daily activities. The result of tailoring the streaming experience is that users are spending an average of over 160 minutes listening, dancing or singing along to Spotify every day, she disclosed.

"There is no cookie-cutter approach, so consider if your mobile strategy will add value to your consumers’ lifestyles. Learn to build for the user, go beyond mobile-first, and go user-first,” concluded Kaur.

Kaur will be sharing insights on how businesses can implement a mobile marketing strategy at CommunicAsia2015 this June.

CommunicAsia2015 / EnterpriseIT2015 Exhibition
Incorporating:	SatComm2015
Date:	2-5 June 2015, Tuesday - Friday
Venue:	Marina Bay Sands, Singapore, Levels B2,  1 & 3
Opening Hours:	2 to 4 June 2015: 10:30 am - 6 pm  5 June 2015: 10:30 am -  4 pm
Admission:	Business and trade professionals only
Website:	www.communicasia.com | www.goto-enterpriseit.com
CommunicAsia2015 Summit
Date:	2 to 5 June 2015, Tuesday - Friday
Venue:	Marina Bay Sands, Singapore, Level 3
Admission:	Registered delegates only
Website:	www.communicasia.com/conference/conference-highlights/

Personalisation is key to e-commerce success

Online revenues boil down to knowing what the customer wants and personalising the experience for him or her accordingly, says online fashion marketplace Zalora, which was at the 2014 Influential Brands: Celebrating brand leadership and Asia brand heroes conference to speak about reaching out to different audiences for digital business.

Founded in 2012, Zalora carries 20,000 products, more than 500 brands and supports multiple touch-points for sales. “We make it as convenient as possible,” Zalora Marketing Director Dione Song said, pointing out that Zalora purchases can be collected at 7-Eleven convenience stories, SingPost's POPStations, or through cash-oh-delivery arrangements.

The company recently invested in a pop-up store at the popular Ion Orchard mall to bring the products to those who are still uncertain about buying online. “Our vision was to bring e-commerce to the offline space. We allow you to get over the barrier of online shopping, show you the product, allow you to try it, but you can’t buy it,” Song explained. The experience can help people to get used to the idea of ordering online and getting their purchases delivered in one or two days instead of the inconvenience of carrying the purchases around, she said.

Song added that Zalora does not segment its customers into ‘Gen X’ or ‘Gen Y’ as the company believes customers are not homogeneous in age segments. “It doesn’t mean that if you’re in an age class that you all act the same way. Customers are very discerning. They know what quality is, they know what they want to pay. We target customers as individuals,” she said.

The experience goes all the way down to personalised web browsing experiences and newsletters, she said. Customers who have browsed one brand are shown complementary brands that are similar. New customers may receive an added incentive to buy, while repeat customers are introduced to in-house labels which they might not have been open to as new customers.

‘Sharks’, people who hunt for discounts, are given bundled deals, whereas those who are more likely to spend more are shown designer brands. “If a customer has looked at shoe pages 10 times, we show you shoes. Everyone has a personal experience. They see a different page but they do not know it,” she said.

Newsletters from Zalora.

Zalora even knows how many times its e-newsletters are read per month, and may change the email subject titles or push special promotions to inactive customers.

"Understanding of a consumer through a behavioural analytical study is important for businesses, not only for the digital businesses. The brand’s strategies should be mapped against the consumer purchase journey which covers multi platforms from which consumers are most likely to be reached when they are commuting to how they purchase, where and why,” said Song.