Post on 14-Feb-2017
transcript
Global eCommerce Expansion: Opportunities and Threats in Beauty,
Fashion, FMCG and LuxuryA Benchmarking Report
2 www.arvato.com
Executive Summary
Headline Findings:
In a time of unprecedented growth in eCommerce, companies are increasingly competing over new opportunities in international markets. Establishing a new eCommerce presence, or expanding an existing one, is a considerable challenge. Successful implementation requires a large amount of technical skill, market knowledge, analytics as well as supply chain expertise.
Where do the opportunities lie for retailers looking to expand? And to what extent do companies expect to seek external assistance for international expansion?
In December and January of 2014/15 Worldwide Business Research and arvato surveyed industry executives in the Beauty, Luxury, Fashion and FMCG industries, focussing on international expansion trends in omni-channel eCommerce.
The survey was completed by 93 industry executives with job titles including Head of eCommerce, Director eCommerce, Managing Director and Vice President of Digital Commerce – this report presents the survey’s findings.
“Global growth is an important topic for our clients. Entering quickly into new markets is somewhat of an eCommerce art form, but in many cases currently only localized services are providing the expected brand experience to end customers. That is where we come in.” Niels Weithe, CEO, arvato Consumer Products
· Outsourcing trend: 50% to 52% of Luxury and Fashion businesses surveyed operate elements of their eCommerce business with outsourced services, contrasted with only 38% of the FCMG industry.
· Most outsourced service: Online Shop develoment & operations and online marketing were consistently named as the aspect of eCommerce most likely to be outsourced
· Luxury abroad: Nearly 25% of respondents in the luxury industry named China and the USA as key areas for growth in eCommerce sales in the next four years.
· Omni-channel operation: Europe is the region in which businesses are most likely to look for support of both B2C and multi-channel eCommerce.
3 www.arvato.com
The UK was the number one marketplace among surveyed businesses across all four market segments. In fact, 100% of responding businesses in the beauty sector have an eCommerce presence there.
United Kingdom
USA
France
Germany
Netherlands
Spain
Italy
United Kingdom
France
Germany
Denmark
Spain
Netherlands
Suisse
Sweden
United KingdomGermany
France
Suisse
Denmark
Sweden
Finland
Spain
Italy
United Kingdom
Germany
USA
Denmark
France
Italy
The USA & France were the second most popular markets with Spain, Denmark & Germany also amongst the top ranked countries. This underlines a European focus in the eCommerce strategies of the businesses surveyed in this report across all four sectors.
Q1: In which countries do you have an existing online presence?
Beauty
FMCG
Fashion
Luxury
Q1 Beauty
Q1 FMCG
Q1 Fashion
Q1 Luxury
2012 2013 2014e 2015e 2016e 2017e 2018e 2019e 2020e
Total Online Sales in €bn
9% CAGR
271304
340379
420
459
495528
558
Population (2014): 322m / Currency: U.S. Dollar (USD) / GDP per capita (2014): 39,141€ / Internet users (2014): 87% / Online buyers (2014): 208m / Online spend per customer p.a. (2014): 2.027€
Sources: Internetlivestats, KPMG, eMarketer, ITU, Webcertain
Market in focus: USA
100%
95% 96%
58%
50%
507%
46%
46%
43%
38%
38%
38%
33%
33%
33%
92%
46%56%
36%56%
27%
44%32%
44%
27%
44%
27%
44%
44%
44%
4 www.arvato.com
Between 40% & 62% of respondents keep their entire eCommerce business in-house dependent upon the sector.
A completely outsourced solution is very rare amongst responding businesses, however, up to
Outsourcing elements of the eCommerce business represents a significant opportunity for third party solution providers to assist in streamlining the transition into new and emerging markets.
half of respondents reported a mixed approach, with part of their operations in-house, and part outsourced. This represents an opportunity for retailers to partner with third party solution providers to streamline their transition into new and emerging markets.
Q2: Who currently operates your eCommerce Business?
Entirely operated in-house
Entirely operated in-house
Entirely operated in-house
Entirely operated in-house
Completely outsourced
Completely outsourced
Partly operated in-house
Partly operated in-house
Partly operated in-house
Partly operated in-house
FMCG
Luxury
Beauty
Fashion
Q2 FMCG
Q2 Luxury
Q2 Beauty
Q2 Fashion
62%
50%
55%
44%
38%
50%
41%
52%
5%
4%
5 www.arvato.com
Overall the most popular areas for outsourcing were online marketing, website development and website operation – indicating a clear skills gap in this area. The rapid growth in digital marketing, and development of the technology which surrounds it, means that large international retailers are looking to external experts to provide access to innovative new strategies in an attempt to get the edge on the competition.
Financial services were most likely to be kept in-house, likely due to business sensitivity. In many ways this result was a surprise, given that many retailers do, in fact, outsource these critical financial services. This is often due to a lack of the required skills available in-house, and both the efficiency and ease of bringing in external expertise.
Q3: Which services did you outsource?
Q3 Which services did you outsource?
Website Development
(Online Shop)
Website Operation (content management, feature adaption, bug fixing, KPI Reporting &
Analysis, etc)
Online Marketing (SEO, Affiliate
Marketing, etc)
Logistics and Fulfilment
Customer Care / Call Centre
Financial Service (Payment and Risk
Management)
Beauty
Fashion
FMCG
Luxury
44%
62%
25%
42%
33%
78%
23%
11%
23%25% 25%
0% 0%
23%
13%17%
11%
17%
31%
38%
50%
39%
25%
8%
Businesses were less likely to outsource services which affect the customer directly, as well as business sensitive financial services. However, retailers who struggle to find the necessary skills in-house do still look externally for expertise in these areas.
6 www.arvato.com
Interestingly, no businesses had clear expansion plans more than 4 years in the future. This may be an indication of caution in a fast-paced and rapidly changing market.
Expansion plans across the four industries brought up familiar names, China and India amongst other emerging markets, which have demonstrated
not only their taste for high-profile European and American goods, but also growth amongst middle class consumers with high purchasing power.
The USA was also named as a popular market for international eCommerce expansion, likely due to its high-levels of familiarity and trust with eCommerce.
Q4: In which countries are you interested for potential future global expansion and over what timeline?
USA
China
India
France
Russia
Brazil
France
Sweden
Brazil
Singapore
China
South Korea
USA
China
Japan
India
Germany
France
USA
China
Germany
France
Belgium
UK
Poland
India
Japan
Beauty
FMCG
Fashion
Luxury
Q4 Beauty
Q4 FMCG
Q4 Fashion
Q4 Luxury
1-2 years [2015-2016]
1-2 years [2015-2016]
1-2 years [2015-2016]
1-2 years [2015-2016]
3-4 years [2017-2018]
3-4 years [2017-2018]
3-4 years [2017-2018]
3-4 years [2017-2018]
14%
14%
14%
10%
5%
5%
10%
24% 4%
14%
14%
14%
12%
12%
16%
16%9%
5% 8% 12%
5% 16%
5% 12%
12%
12% 4%
4%
4%
4%
4%
12%
12%
12%
8%
8%
8%
8%
16%
12%
4%
7 www.arvato.com
The majority of respondents stated that they were not seeking a service provider at present.
Of the regions respondents who would consider an outsourcing partner, Europe was the most popular choice of region, followed by Asia-pacific.
Online and affiliate marketing was the area in which most respondents reported that they would be interested in outsourcing. The least popular was financial services, further underlining a trend first identified earlier in this report.
Q5a: In which regions would you consider an outsourcing service provider to support the global expansion of your B2C eCommerce Business?
Q5b: In these regions which key services would you look to outsource in support of your B2C eCommerce business?
Q5 In which regions would you consider
Q5.1 : In these regions which key services
Africa
Financial Service
Asia-pacific
Customer Care/ Call
Centre
China
Logistics and Fulfilment
Russia
Online Marketing
Europe
Website Operation
Latin America
North America
Website Development
0%
0%
17%
39%
50%
6%
22%
7%
4%
1%
10%
1%
2%
2012 2013 2014e 2015e 2016e 2017e 2018e 2019e 2020e
Total Online Sales in €bn
25% CAGR
85140
304
211
276338
392435
469495
Online marketing again indicated as a key area in which business are looking for external support.
Population (2014): 1.4 bn / Currency: Chinese Yuan Renminbi (CNY, ¥) / GDP per capita (2014): 4,842€ / Internet users (2014) / Online buyers (2014) / 354m / Online spend per customer p.a. (2014): 658€
Sources: Internetlivestats, KPMG, eMarketer, ITU, Webcertain
Market in focus: China
8 www.arvato.com
In the multi-channel area, again, Europe and Asia-pacific came out as the more preferable options for partnership with an outsourcing provider.
In regard to multi-channel respondents showed a mixed willingness to outsource, with on/offline customer care being the most likely service to outsource.
Q6a: With regard to multi-channel solutions, in which regions would you consider an outsourcing service provider to support your multi-channel approach?
Q6b: In these regions for which key services would you consider support for an outsourcing service provider for your multi-channel business?
Q6 With regard to multi-channel solutions
Q6.1 In these regions for which key services
Africa Asia-pacific
China Russia Europe Latin America
North America
1%
5%
1%
2%
8%
2%
1%
Operation of Centralised B2B/B2C inventory
Online/offline customer care
Order at store (online order at retail store
Return at store (return handling at retail store)
Click & collect (pick up at store)
Ship from store (ship from retail store)
36%
55%
36%
36%
36%
27%
Europe remains a key battleground for outsourcing service providers in multi-channel
Businesses want to keep their logistics and fulfillment cards close to their chest – they are more likely to look for assistance with direct customer care.
9 www.arvato.com
AppendicesDo you have an existing eCommerce presence?
In which country is your global headquarters?
Do you have an existing eCommerce presence?
99% Yes
1% No
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Suisse
Germany
SwedenFrance
France
USA
Italy
Germany
France
Belgium
Beauty
FMCG
Fashion
Luxury
In which country is your global headquarters? BEAUTY
In which country is your global headquarters? FMCG
In which country is your global headquarters? FASHION
In which country is your global headquarters? FASHION
90%
90%
80%
81%
5%
5%
4%5%
5%
8%
5%
8%
9%
5%
10 www.arvato.com
Omni-channel retailing in fashion, beauty, luxury and other consumer-driven industries bears huge international growth potential for both established and new players. Having the right partner to manage the complexity at speed is key to success in these highly competitive industries.
arvato has successfully helped leading consumer brands such as Tommy Hilfiger, Esprit, Nestlé, Douglas, Triumph and others to build and grow their eCommerce business internationally. With 68.000 employees and 4.4 billion € revenues, arvato is one of the globally leading outsourced service providers for supply chain management & eCommerce as well as call center, payment, IT and marketing services.
Leveraging a global infrastructure of 110 fulfilment centers in 22 countries, 25.000 call center seats for customer services with 30 languages and a global payment gateway covering all leading payment methods, arvato is in a unique position to support clients at their global growth strategy across B2C and B2B channels.
This includes services & solutions in markets such as China or Russia where arvato runs significant domestic operations for logistics fulfilment, call center, payment and marketing for leading fashion, beauty & luxury brands such as Yves Rocher, L’Oreal or Fossil.
arvato’s services span the complete eCommerce value chain: Implementation and operation of online-shops such as Demandware, Hybris or Magento, warehousing & transportation, domestic and cross-border, as well as financial services, customer service and digital marketing.
arvato is a 100 % subsidiary of Bertelsmann SE & Co. KGaA.
Contact: Michael Schröder An der Autobahn, 33333 Gütersloh; Germany
Tel :: +49 (0)5241.80.89136 Email: sales-consumer@arvato.com www.arvato-consumer-products.com
About arvato
Global Presence
Global Experience & References
arvato’s Service PortfolioShop
DevelopmentData
IntegrationDigital
ImagingOnline
MarketingeCommerce Operations
Fulfilment & Logistics
Customer Services
Financial Services
Global logistics network with 50 million deliveries p.a. for fashion, beauty & luxury
Global payment gateway & industry-leading risk management solution
Customer services network with 25.000 seats worldwide in 30+ languages
Global online marketing team & leverage of Bertelsmann media network
Special expertise with garments, fragrance
In-house team with 450+ developers for shop platforms and multi-channel-solutions
11 www.arvato.com
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