Brilliant Digital Talk : Demystifying Digital Disruption

DEMYSTIFYING DIGITAL DISRUPTIONMay 09th, 2016@theVENUE18 Office Park 15th floor, TB Simatupang, Jakarta

DIGITAL TALK Episode 2

Brilliant Digital Academy proudly present:

Speakers

Lyra PuspaCEO & FounderBrilliant Digital Academy@Lyra_Puspa

Bari ArijonoKetua Umum ADEI(Asosiasi Digital Entrepreneur Indonesia)@Bari_Arjon

Angky Yan PramudyaHead of MarketingBlanja.com@ankiyan

Go Social!

https://www.facebook.com/brilliantdigital/

https://twitter.com/brilliantdgtal

Brilliant Digital

Brilliant Digital Academy

Today session is being recorded. I know what you’re thinking. Don’t worry. We will give you the URL to

access the entire video. Simply just send an email to [email protected] with subject

“I WANT THIS RECORDED!”We will give you what you want, and of course, the presentation slides as a token (you’re welcome).

Try to get relax, like we know you’re going to, and enjoy the session ...

Regards,The man behind the camera

Round 2: Be a disruptor, don’t be disrupted!By Bari Arijono

Round 1: Disruptor’s mind. Revealed.By Angky Yan Pramudya

Round 3: Digital Talk Wrap UpBy Lyra Puspa

Agenda

Say what?

“A disruptive innovation is an innovationthat creates a new market and valuenetwork and eventually disrupts an existingmarket and value network, displacingestablished market leaders and alliances”

1995Clayton M. Christensen

Professor of Business Administration at the Harvard Business School (HBS), having a joint appointment in the Technology & Operations Management and General Management faculty groups. Christensen is also a co-founder of Rose Park Advisors, a venture capital firm, and Innosight Ventures, a management consulting and investment firm specializing in innovation.

First thing first, meet the man who first coined the beginning term

Pe

rfo

rman

ce

Time

Welcome to the Fourth Industrial Revolution!

EE Times Europe: Realizing Industry 4.0: Essential System Considerations, 2014

39 %

43 %

47 %

50 %

51 %

52 %

52 %

53 %

57 %

57 %

61 %

64 %

72 %

0 10 20 30 40 50 60 70 80

Industrial

Asset wealth management

Health care

Education

Business & professional services

Non Profit

Consumer products

Insurance

Technology

Retail

Consumer financial services

Telecom

Media

Executives Who Anticipate Moderate or Massive Digital Disruption in the Next 12 Months, by Industry

(Source: “Digital Pulse “2015 by Russell Reynolds Associates)

Not a warm welcome, to be honest …

The Digital Disruption has Already HappenedWorld’s largest taxi company owns no taxis (Uber, Grab)

The Digital Disruption has Already HappenedLargest accomodation provider owns no real estate (Airbnb)

The Digital Disruption has Already Happened Largest phone companies own no telco infra (Skype, WeChat)

The Digital Disruption has Already Happened

World’s largest movie house owns no cinemas (Netflix)

Digital Disruption?

Easy. I’m gonna make

them a product

they can’t

REFUSE.


Round 1: Be a disruptor, don’t be disrupted! By Bari Arijono


FUTURE OPPORTUNITY

BARI ARIJONOKETUA UMUM

Let me introducewho am i

Foreword

We are in the midst of a major technology revolution—specifically a digital revolution—with digital now dominatingevery sector of the economy. And we are seeing an importantnew shift as the technology revolution begins to put peoplefirst. To put it simply, as businesses become digital, theirpeople and cultures must become digital, too.

Platforms’ Shared of Mobile Web

Based on @platform ‘s shared of total global mobile web page requests

Active Users by Social Platform

In million

Active E-Commerce Shopper

% of national population who bought online

Indonesia#25 with 27%

What should we DO

• Transform your Business (DX)

• Built Digital Business for Change (DB)

• Data Driven first (DT)

• Disrupted is a must (DS)

• Digital Risk awareness (DR)

WIN LOCALLYGO GLOBAL

Why do you need DX

To understand how the Digital Technology ofCloud, Mobile, Social, and Big Data are affecting businesses

Mobile is enabling new business scenarios Cloud computing is driving business agility Big data is helping companies innovate Social channels are transforming core business processes

Digital transformation is occurring rapidly at a majority of public and private sector organizations.

Biggest Impact of DT

Improving customer service 53% Increasing productivity 52% Developing new services 50% Business models 42% Products 41% Increasing revenues 40%

Forecast to grow significantly increasing revenues developing new business models improving market share

with a strong vision and mature processes for digital transformation were more profitable on average, had higher revenues, and achieved a bigger market valuation than competitors.

The business is digital, so the organization, its people and its culture must now become digital too

DB Culture Shock

This global digital economy accounted for 22 percent of the world’s economy in 2015. And it’s rapidly growing, as we forecast those numbers to increase to 25 percent by 2020, up from 15 percent in 2005.

Digital Means People too

Collaboration Companies no longer just serve customer

Coopetition No longer just compete with rivals

Sinergy No longer limited by industry boundaries

Winners will create corporate cultures where technology empowers people to evolve, adapt, and drive change. The mantra for success

is “PEOPLE FIRST”

Key Take Away

• Penjualan online Indonesia mencapai USD 1,1 miliar, lebih tinggi dariThailand dan Singapura.

• Penjualan e-commerce di Indonesia hanya menyumbang 0,07% daritotal perdagangan retail

• Rata-rata pertumbuhan tahunan (CAGR) penjualan online di Indonesia selama 2014-2017 sebesar 38%,

• Indonesia sebagai raja e-commerce ASEAN• tumbuhnya pengguna internet yang mencapai 88,1 juta. 100 juta di akhir

2016• pengguna sosial media 79 juta• jumlah penduduk 259.1 juta jiwa

BARI ARIJONO

Bari Arijono

[email protected]

08128899646

www.adei.idTHANK YOU




E-commerce OpportunitiesIn Indonesia

Disruptive Innovations

Angky Yan Pramudya

Head of Marketing at Blanja.com

What is disruptive Innovations1

Key Conclusions : Where does E-Commerce go from here?

Five disruptive forces

Segment Analysis

2

3

4

Disruptive Innovations – E-CommerceTopics :

5

Indonesia’s EC Market Share

Where does E-Commerce go from here?

Key Conclusions

What is Disruptive InnovationsDisruptive Innovations – E-Commerce

A disruptive innovations is an innovations that helps create a new market and value network, and eventually disrupts

an existing market and value network (over a few years or decades), displacing an earlier technology . The terms is

improve a product or services in ways that market does not expected, typically first by designing for a different set of

consumers in a new market and later by lowering prices in the existing market. (Wikipedia)

• Disruptive innovations is NOT the same as innovations, in general.

• Very often, No new technology is involved, but could be technology based.

• Could be, and very often is, based on disruptive, new business model

• The business model changes the economics of the entire industry segment

• It disrupts the business structure of that industry segments

• Improvement in the prevailing solution exceed mainstream needs

• Over time, the disruptive innovations

• Improves in performance – exceeds that of the previous prevailing solutions

• Meets the needs of mainstream customers better than the previous solutions

E-Commerce still has a long runway for growthE-Commerce share of total retail sales in Indonesia

Retail sales disruption is a trend that may actually accelerate over the next five years in Indonesia

E-Commerce sales could surpass $11 Billion by 2018

For legacy services, there is both good news and bad news, depending on the defensible nature of product

E-Commerce Opportunity is Large

Population

Digital Buyer

eMarketer; InsideRetail Hong Kong; Morgan Stanley

252 M 255 M 258 M 262 M 265 M 269 M

14 M 22 M 30 M 40 M 50 M 61 M

Where does E-Commerce go

from here?

Key Conclusions

Key Conclusions : Where Does E-Commerce Go From Here?Some categories remain resistant to change

• In the long-term, scale wins, and the right fulfilment infrastructure is the means to achieve scale.

• Nation-wide fulfilment networks are highly capital intensive and represent a material barrier for competition

• Some legacy services are either building their own fulfilment centers, or leveraging retail store to fulfil orders.

Fulfilment investment drive shipping cost savingsLazada, Blibli & Mataharimall may continue leveraging shipping costs as it improves last mile logistics

Key Conclusions : Where Does E-Commerce Go From Here?Fulfillment infrastructure is critical

Fashion, Gadget & Electronics have the highest online penetrations, with books at the lowest

• Branded fashion & beauty retailers appear relatively impervious to E-Commerce disruption

• Fashion companies, such as Delami brand, control both manufacturing and distribution of their products, are also insulted

Tech in Asia; MarkPlus; Marketeers

Key Conclusions : Where Does E-Commerce Go From Here?

Mobile E-Commerce : A Promising opportunity

Key Conclusions : Where Does E-Commerce Go From Here?Third-party marketplaces can prosper

Tech in Asia; MarkPlus; Marketeers

• 3P Marketplaces allow an infinitely scalable selection of merchandise

• 3P can either be stand alone business (Blanja, Tokopedia, Bukalapak) or complementary business (Lazada, Elevania)

• The success of 1P vs 3P varies by customers segmentation

• Mobile sales can offer customers additional convenience, and be incremental in nature

• Simple yet sophisticated apps are important

• Mobile also benefits legacy services by offering services clerks more real time information's

Online devices most frequently used for online shopping

Mobile phone internet users penetration

Five disruptive forces

There are five disruptive forces in E-Commerce

Price

Consumers like to buy products at the lowest

price possible

Selection Cost StructureConvenience Distribution

No Constraint of Shelf Space

EC Offers accelerated delivery programs and

mobile shopping

Merchants can easily initiate nation-wide

distribution

At scale, EC benefits from sales marketing

efficiency

Segment Analysis

Summary of Key TakeawaysE-Commerce in Indonesia

E-Commerce needs to close the “trust” Gap

1

2

3

4

5

Over the next five years, payment, logistics and fulfilment innovation should determine the level of disruption of traditional retail.

Structural and socioeconomic demographics determine the company-specific strategy an E-Commerce retailer will have to lead with in a specific market; in Indonesia, fulfilment is crucial (for 1P or B2C)

Investments that improve an E-Commerce retailer’s ability to offer low prices, broad selection and increased convenience will likely lead to higher sales growth, albeit at a potentially lower margin

Pursuit of “value” and “convenience” is universal motivations that continues to drive E-Commerce

Thank you!“it’s still Day One” for E-Commerce in Indonesia

Q&A Session




Disruption is not about doing BETTER, it’s about doing it DIFFERENTLY

Disruption is not about DIFFERENTIATION, it’s about CREATING NEW

Disruptors makes the established leader NOT WORSE, just IRRELEVANT

Disrupt yourself first, then disrupt the world!

STEVE JOBS

Macintosh

Apple II

Thanks.