e-commerce retailers: the next billion $ opportunity _ sullivan...e-commerce retailers - the next...

e-Commerce Retailers:The Next Billion $ OpportunityAre We Ready?

A Frost & Sullivan White Paper

in Collaboration with CDNetworks

e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?

CONTENTS

Executive Summary ..................................................................................................................... 3

Heading Towards a Paradigm Shift in Shopping ................................................................ 6

Challenges in the ASEAN e-Commerce Market .................................................................. 10

Impact of Latency on e-Commerce Providers’ Businesses ............................................. 12

Winning Big by Thinking CDN .................................................................................................. 13

Customer Experience in the New Competitive Battleground ........................................ 14

Litmus Test Criteria for Online Businesses to Select the Right CDN Provider .......... 15

CDN Solution by CDNetworks .................................................................................................. 17

Conclusions - Laggards will Pay the Price ............................................................................ 21

Case Study: Qoo10 ....................................................................................................................... 22

frost.com

3All rights reserved © 2016 Frost & Sullivan

e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?

INDIA• In 2016 e-Commerce

market was $25 B.

• It will grow up to $55 B

by 2018.

CHINA• By 2019, 20.3% of total sales will be through e-Commerce.

• China accounts for 40% of the world’s retail e-Commerce sales.

• By 2019, China will command a worldwide share of 55.1% at $1 T.

KOREA• By 2019, 19.6% sales will be through e-Commerce.

• In 2015, the e-Commerce spending was $36.76 B.

• It has one of the fastest Internet systems in the world.

JAPAN• Half of all online transactions are made via smartphones/

tablets.

• In 2015, e-Commerce spending was $79.22 B.

• 97% of Internet users shop online.

INDONESIA• In 2015, e-Commerce grew by 55%.

• By 2018, e-Commerce will be a $11 B industry.

MALAYSIA• In 2016, $1.2 B sales was recorded through e-Commerce.

• By 2020, an estimated $2.86 B will be through e-Commerce.

SINGAPORE• In 2016, $ 4.13 B sales was recorded through e-Commerce.

• Singapore and Malaysia generate half of SEA’s e-Commerce

sales.

• By 2020, the e-Commerce market will reach a revenue of

$6.5 B.

By 2018, Asia-Pacific will lead worldwide in e-Commerce growth and sales.

E-COMMERCE MARKET IN ASIA-PACIFIC

MOBILITYMobile devices will be the ‘retail destination’.

REWARD LOYALTYReward systems and customer loyalty will be important differentiators.

EFFICIENT & SECUREDSecured transactions, including mobile payments and wallets, and efficient delivery will be the key.

UNDERSTAND CUSTOMERSThe ones who understand customer emotions, their mental state, and their needs will win ultimately.

KEY TRENDS DRIVING GROWTH

$3015B2018 Global e-Commerce

$1892B2018 APAC e-Commerce


4 All rights reserved © 2016 Frost & Sullivan


EXECUTIVE SUMMARY

The e-Commerce industry has witnessed unprecedented growth across the Association for

Southeast Asian Nations (ASEAN) region, surpassing US$10 billion in revenue in 2015. The

high growth is driven primarily by technology adoption, with the proliferation of smart phones,

broadband, and 3G/4G Internet, as well as the trustworthiness of online sales channels in

the minds of customers. This expeditious movement in the online shopping arena may be

perceived as just the beginning. The industry has also undergone a paradigm shift in the

way customers shop-not only are physical attributes enabled but related products are made

visible to millions of customers that would otherwise have not been purchased.

With explosive growth in countries such as India, China, Japan, and South Korea, Asia-Pacific

(APAC) is set to become the leading region in e-Commerce in the world. By 2018, APAC is

expected to generate sales of $1,892 billion at the regional level and $3,015 billion globally.

The retail e-Commerce segment accounted for 10.2% of the total retail sales in APAC in 2015,

which is projected to grow to 20.3% by 2019. Among the APAC countries, China leads with a

projected 19.6% of total e-Commerce sales, followed by South Korea with an estimated 14.7%,

by 2019.

Source: Frost & Sullivan analysis

China

e-Commerce

Revenue Growth

(2016-2020)

2015 Internet

Penetration

2016 Average

Revenue per User

South Korea

14.28% 725 47%

11.73% 844 88%

11.69% 1390 81%

24.30% 88 66%

18.82% 327 28%

20.67% 45 44%

Singapore

Malaysia

Indonesia

Philippines


e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?

Many e-Commerce retailers may not be able to sustain themselves in this high-opportunity

and challenging business environment with insatiable customer expectations. In an already

crowded market space, where companies strive to achieve internal efficiencies and provide

the best customer experience at competitive prices, establishing a reliable e-Commerce

infrastructure that meets customer expectations at all times can become difficult. Research

proves that one of the top drivers that contribute to the switching of customers from one

e-Commerce company to another is due to the slow loading speed of the Web page. Today’s

customers are restless beings; s/he is ready to abandon the shopping cart and, for that matter,

the e-Commerce Web site owing to a few milliseconds of page-loading delay, called latency.

An advantage of 250 milliseconds of page load time can be the difference between a satisfied

customer and an ex-customer.

Top e-Commerce companies across the globe use various technologies and solutions to ensure

a fast and reliable shopping experience for their customers, irrespective of the device used.

Content Delivery Network or CDN is one of the most successful solutions. CDN is a network

of servers that stores content from Web pages, videos, graphs, images, and databases and

delivers them to the desired audience, ensuring high availability, performance, and speed.

This improves the user experience with efficient network resource utilisation. CDN not only

guarantees a faster page load time with every click that a customer makes-ensuring increased

sales-but it also saves on hardware and software costs.

How does that translate into revenues? With the use of CDN solutions, e-Commerce merchants

are able to boost their Web performance tremendously-one second of speed boost increases

sales by 3% per customer.

This whitepaper examines some of the core issues and challenges-latency in particular-faced

by e-Commerce customers and how an e-Commerce participant can identify the appropriate

CDN solution to provide seamless customer experience that is cost effective, fast, reliable, and

efficient for providing coverage across operational countries.




HEADING TOWARDS A PARADIGM

SHIFT IN SHOPPING

Growing Acceptance and Importance of Online Shopping as a Viable Alternative

The move towards online shopping can be tracked to the 90s, when companies such as eBay

and Amazon introduced their e-Commerce solutions. The industry has grown significantly in

terms of capacity in the last 2 decades. Consumers have the option to shop at e-Commerce

sites for a wide range of products-ranging from fashion, jewellery, electronics, music and

videos, books, and toys to sports, travel, and much more.

The ‘always-on-shopping’1 mode is now a reality, where the customer can shop 24x7x365

from any location and on any device or platform-desktops, laptops, or mobile phones. This

reiterates the importance of how e-Commerce retailers need to not only provide a flexible

platform but also a reliable buying experience for shoppers.

Besides evolving consumer needs, the increasing use of smartphones and tablets has aided in

the overall growth of the e-Commerce industry. It is estimated that up to 30% of e-Commerce

sales in developed and developing countries is attributed to this increased proliferation of

mobile/smartphone devices. Though smartphone penetration in the ASEAN region is less

than 40%, it is increasing at a fast pace and is expected to exceed 80% by 2020. Other factors,

1 3 e-Commerce Trends You Need to Know for a Profitable 2015 by Shopify



such as larger disposable income among the growing middle income group across the globe,

are also contributing towards the rapid growth. ASEAN has close to 65% of its households

in the middle income group, where the purchasing power is increasing rapidly2. Considering

the fact that this is the only industry experiencing double-digit growth on a global level,

generating more than a trillion dollars3, the potential for e-Commerce is immense.

Exhibit 1: ASEAN e-Commerce Market (2014–2020)

Source: Frost & Sullivan

The revenue generated in the global e-Commerce market in 2015 exceeded US$1.5 trillion;

however, this only contributed to 6.7% of the total global retail sales, showing that there

is significant potential for the industry to grow. The United States, which is the 2nd largest

e-Commerce market (after China), saw 7.3% of its 2015 total sales revenue coming from

online sales4. Peering closer into the ASEAN region, made up of Indonesia, Malaysia, Thailand,

Singapore, Vietnam, and the Philippines, the combined e-Commerce market is expected to

grow from US$10.2 billion in 2015 to US$21.6 billion in 2020, at a CAGR of 16%. This represents

a huge opportunity for e-Commerce retailers at the regional level.

2 Frost & Sullivan’s Mega Trends Report - 2015

3 Retail Sales Worldwide will Reach $22 Trillion this Year by Emaketeer

4 Quarterly Retail e-Commerce Sales 4th Quarter 2015 by US Department of Commerce

ASEAN-6 e-CommerceMarkets and Penetration (2014-2020)CAGR 16%

VietnamMalaysiaIndonesiaPhilippinesSingaporeThailand

25

20

15

10

5

02014 2015 2016 2017 2018 2019 2020

1.15

1.90

1.580.83

1.92

1.53

1.38

2.19

1.90

1.12

2.05

1.86

1.69

2.51

2.34

1.47

2.19

2.13

2.06

2.84

2.76

1.84

2.35

2.42

2.50

3.19

3.36

2.22

2.52

2.74

3.03

3.56

3.94

2.62

2.71

3.12

3.70

3.91

4.59

2.97

2.96

3.42




Competition Among Online Retailers Intensifying Every Day

During the initial phase of mass marketing in the 1990s, most e-Commerce companies

originating from the US dominated in terms of global market share. Since then, many local

or regional companies have emerged and are thriving. Research shows that only Amazon,

eBay, and Craigslist are among the top 10 global participants within the e-Commerce space.

A similar trend is being observed in the ASEAN countries, where either local or regional

participants, such as Lazada, Zalora, and Qoo10 (ex-Gmarket from South Korea), and several

large Chinese global participants, such as Alibaba, Taobao, and Aliexpress from the Alibaba

Group, operate.

Exhibit 2: Global and ASEAN Top e-Commerce Retailers (2016)

Source: Frost & Sullivan

GLOBAL• Alibaba• AliExpress• Amazon• Craigslist• eBay• JD• Rakuten• Taobao• Walmart

VIETNAM• 123mua• 5giay• Amazon• Chotot• Hotdeal• Lazada• Nhattao• Sendo• Thegiodidong• Tiki• Vat Gia

THE PHILIPPINES• AliExpress• Amazon• eBay• Ensogo• Lazada• Metrodeal• Olx• Zalora

SINGAPORE• Alibaba• AliExpress• eBay• Lazada• Luxola• Qoo10• Rakuten• Reebonz• Taobao• Tmall• Zalora

THAILAND• Alibaba• AliExpress• Amazon• Boxza• Cdiscount• Central• eBay• Ensogo• J.I.B• Kaidee• Lazada• Tarad• Weloveshopping

MALAYSIA• 11street• Alibaba• eBay• Ensogo• Goshop• Groupon• Lazada• Lelong• Mudah• Rakuten• Taobao

INDONESIA• Alibaba• Bhinneka• Blibli• Bukalapak• Elevenia• Lamido• Lazada• Olx• Qoo10• Tokopedia



There are already more than 1 million online stores in ASEAN5, with the top 20% of e-Commerce

retailers contributing 63% to the total revenue. This trend of intensifying competition within

the e-Commerce provider space is expected to accelerate as the industry grows.

Consumers Evaluating their Online Service Providers Continuously During Every Log

In, at Every Purchase, and at Every Return

While there have been various improvements and enhancements during the last 20 years to

make the overall online shopping experience more pleasant, it is still far from perfect. While

the challenges faced could range from the Web site design and technical specifications of the

e-Commerce platform to the payment gateway, this paper will focus on the common issues,

faced by both retailers and consumers alike.

5 ASEAN e-Commerce 2015 - Frost & Sullivan




CHALLENGES IN THE ASEANE-COMMERCE MARKET

In the midst of huge business opportunities owing to the growing middle class, higher

smartphone and Internet penetration, growing number of e-Commerce participants, more

logistics options, and alternative payment methods, the ASEAN region faces unique challenges.

Managing customer expectations and perceptions related to speed and reliability of delivery

and online payment fraud; cross-border issues related to custom duties, taxes, logistics, and

corruption; lack of low-cost and reliable logistics infrastructure designed for e-Commerce;

and each country’s regulations with regard to e-Commerce and foreign ownership are some

of the challenges that deter customers from shopping online, as well as new participants from

starting operations.

Crossing the Chasm

Reaching out to the regional market and meeting cross-border transaction complexities,

cross-border e-Commerce is on the rise globally.

This is further expected to increase with new trade initiatives, such as the ASEAN Economic Co-

operation (AEC), which will lower trade barriers and are expected to further increase regional

trade by 60%. However, managing performance, especially for cross-border international

trade, can be both costly and complex.

In Southeast Asia, 40% of e-Commerce transactions are cross-border;

the most commonly bought goods & services include:

AirlineTicket

Tour & HotelReservation

Electronics Clothes

40% Asia25% Europe20% N. America15% Others

2014 Global Cross-border

e-Commerce market

$80B

2025 Global Cross-border e-Commerce market

$600B



Browsing Speed Crucial for Cross-border Trade

The complication is magnified in ASEAN, where different countries have varied levels of

Internet infrastructure. The host server for the e-Commerce Web site could be in a country

situated thousands of miles away from the shopper’s location, which impacts the overall

quality of speed for the buyer.

1. High bounce rates and low search engine optimisation (SEO) rankings: In a study,

47% of the consumers surveyed mentioned that they expected the Web site to load

within 2 seconds and 40% stated that they would leave if it did not load within

3 seconds. Another study inferred that close to 60% of ASEAN consumers would

look for an alternative place to purchase a product, if the Web site failed to load

on time. This translates to tremendous loss in revenues for e-Commerce retailers.

Furthermore, search engine companies such as Google, Bing, and Yahoo take into

account Web site load times as a parameter in their algorithm for producing organic

search ranking. A longer load time will impede an e-Commerce retailer from getting

a high rank. This affects the company while attracting new visitors to its site, though

it may have the product or service that the prospective customer is looking for.

2. Complexity issues while working with multiple vendors: Many ASEAN companies,

especially those in the e-Commerce space, tend to have the misconception that it is

cheaper to manage their infrastructure, including the distributed network of proxy

or caching servers, by using products and services from multiple vendors6, with the

aim to provide a seamless Web browsing experience. In consequence, not only are

costs likely to escalate due to the lack of bundled pricing options, but it can also

lead to integration and interoperability issues, which can affect the overall end-user

experience.

6 A Unified Approach to Accelerating Web Sites and Web Applications by CDNetworks



IMPACT OF LATENCY ON E-COMMERCE

PROVIDERS’ BUSINESSES

Based on survey results7, e-Commerce retailers experience multi-fold losses due to the lack of

ability to provide a solid and seamless online shopping Web site experience.

Customers Cannot Wait. Period.

Today’s customer is hungry and impatient. As much as s/he wants new products at cheaper and

competitive prices, s/he craves for high loading speeds, easy navigation, secured browsing and

purchase experience, and much more. The most important factor that pushes a customer off a

Web page is slow speed.

Examples:

• An e-Commerce Web site making daily sales of $100,000 is expected to lose $2.5

million annually due to a one-second page delay8.

• Web pages taking 3 seconds to load deter 40% of visitors, which translates to an

enormous 40% loss of sales.

• 62% of ASEAN buyers rated latency of an e-Commerce Web site as the most important

factor for overall satisfaction-more than the breadth of products and services (46%)9.

• 70% of the customers are not likely to visit an e-Commerce Web site if they were

dissatisfied with its previous performance.

Companies in APAC, such as Singapore-based start-up Reebonz and South Korea-based

11street, face challenges not just due to cross-border transactions across Asian countries, but

also due to poor customer experience. Online markets, such as 11street, place high importance

on offering pleasant shopping experiences from the moment a consumer gets online all the way

through to the delivery of the purchased items. Global companies, such as Amazon, employ

an ever-improving e-Commerce strategy to drive sales and volumes, attract customers, and

provide back-end support-every 100 milliseconds of latency costs them 1% of their sales.

7 How Loading Time Affects Your Bottomline by Kissmetrics

8 Why is Web Site Speed Critical for Online Retail Success in 2015 by CDNetworks

9 ASEAN E-Commerce Survey – Frost & Sullivan 2015



WINNING BIG BY THINKING CDN

With the growing consumer demand for fast and uninterrupted access to applications and

sites, fuelled by advanced technologies and broadband proliferation, most e-tailers are

looking for ways to reduce inherent Internet latency and congestion, leading to poor end-

user experience. This is particularly true for e-Commerce companies that deploy applications

generating dynamic content to display on the Web sites. But, at what cost?

Online retailers look out for optimum solutions that can considerably improve the performance

of their portal at a reasonable cost. Constructing their own data centres is an option, but it

induces latency from geographically dispersed data centres, as well as high costs, potential

risks, and resource barriers. Foreign hosting is another alternative; however, it is often highly

priced, besides opening possibilities of manageability issues while dealing with additional

parties.

The most suitable choice to address the issue of latency with regard to Web performance

at low operational costs is the use of global CDN. CDN enables an unparalleled end-user

experience by accelerating the Web performance, which includes dynamic content. CDN

reduces the Internet middle mile by bringing content closer to users, shortening round trips,

and, as a result, reducing latency and increasing page-loading speeds at a much lower cost

than what would be incurred from the construction of data centres and foreign hosting.

Furthermore, CDN considerably reduces site abandonment by customers and increases

sale conversion rates by utilising its global presence, scalability, and managing massive and

unexpected traffic spikes due to special marketing campaigns. CDN is operational right from

the time the customer opens the Web site until s/he purchases the product and closes the

post purchase activities, viz., information gathering of the product, shipment, and/or customer

service.

As more aspects of daily life move online, organisations are increasingly using a dedicated

CDN provider to accelerate static, dynamic, and mobile content, e-Commerce transactions,

video, voice, and games, among others. In addition to offering superior Web performance

resulting in better user experience, CDN providers subscribe to the best practices in security

standards, such as the Payment Card Industry Data Security Standard (PCI DSS), to protect

customers from various security threats.



CUSTOMER EXPERIENCE IN THE NEW

COMPETITIVE BATTLEGROUND

Exhibit 3: Customer Experience

Similar to most technology solutions, ‘one size does not fit all’ is the case with CDN as well, as

the perspectives and requirements of each organisation are unique.



LITMUS TEST CRITERIA FOR ONLINE

BUSINESSES TO SELECT THE RIGHT CDN

PROVIDER

More often than not, Web businesses approach a technology solution blindfolded. They either

go by word-of-mouth from a colleague who runs an online shop in some other part of the

world or by going for companies that cater to a wide spectrum of businesses with a solution

that is, most of the times, not a custom one.

In this technology industry, many CDN providers focus on key benefits, including increasing

Web performance. However, there are 3 criteria that should be regarded as the golden rules

while selecting the right service.

Criteria 1: Global Businesses (and Local Needs)

Online shoppers across ASEAN have unique requirements; however, one that is common

across the world is the need for speed.

Web sites of today and tomorrow, including local dominant participants, are going global by

the day. With increasing globalisation of Web businesses, there is an increasing need for CDN

service providers that are localised to each operating country, supported by personnel who

can understand local issues and identify solutions that provide a unified customer experience

for the users, irrespective of where the data is consumed.

e-Commerce Retailers—The Next Billion $ Opportunity - Are We Ready?



Criteria 2: Security

No user would want to shop on an e-Commerce Web site that does not guarantee the security

of online transactions.

PCI certifications ensure compliance; however, they do not check the occurrence of Distributed

Denial of Service (DDoS) attacks, though the compliance to PCI would reduce their likelihood.

As applications are becoming more accessible on the Web across industries the threat of

increasingly complex attacks against Web applications is growing. Hence, a CDN service

provider must ensure that it has built-in DDoS mitigation and proactive site-monitoring

features and sends alerts in the event of such an attack. From a user’s perspective, these

attacks might mean temporary unavailability of services, which will not result in a positive

user experience, as they would be unaware of the reasons.

Additionally, CDN providers should provide intelligent Web Applications Firewall (WAF)

technology from a trusted security provider that can stop attacks such as DDoS, SQL injections,

and behaviour-based complex logics. Mitigation, monitoring, and alerting services will help in

controlling and containing the issue quickly and effectively.

Criteria 3: Efficient Architecture

One of the most important criteria is to select a CDN operator that has application acceleration

and a robust cloud load balancing solution. Load balancing is critical for any Web site with a

widely distributed customer base. An agile and flexible content delivery architecture allows

fast response to changing business and end-user requirements. A domain name system (DNS)-

based cloud load balancer for traffic management allows for optimal resource allocation

and business responsiveness, along with the reduction of capital expenditure (CAPEX) and

operational expenditure (OPEX). The solution must have flexible policies and allow complex

conditions to address unique situations that can be modified by administrators easily. The

infrastructure needs to remain available to maintain business continuity, even during periods of

massive, unpredictable traffic to prevent loss of revenue. Cloud-based acceleration improves

middle mile performance by reducing the number of data round trips necessary to complete

a Web request. This proves invaluable to retail sites that incorporate interactive applications,

such as social commentary and inventory look-up.



e-Commerce Retailers—The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers—The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?

CDN SOLUTION

CDNetworks is a widely acclaimed and high-performing global CDN service provider. With a

Tier I network performance across 6 continents and 200+ global points of presence (POPs), it

ensures constant and reliable content acceleration under any network conditions. CDNetworks

has accelerated the Web performance of more than 40,000 Web sites and cloud services.

CDNetworks delivers Web content to the end-user via the most efficient path-through globally

deployed, high-capacity edge-servers across 100+ cities, providing rapid response times. It

has satisfied users even during periods of high congestion or dramatic spikes in traffic.

CDNetworks is the only multi-national CDN with expertise and infrastructure in China, Russia,

and other emerging markets, which enables it to understand and address local issues and

needs with world-class solutions trusted by thousands of customers worldwide. As the Web

matures into a platform for delivering mission-critical applications, CDNetworks provide the

services to control, optimise, and monitor the applications over the public cloud. Its Web

Performance Suite seamlessly combines all the services necessary for reliable and speedy

delivery of robust Web sites and applications.

What Sets it Apart?

CDNetworks provides an optimised user experience for its customers by offering speedier

site performance than other service providers, uniquely facilitated by local support, combined

with specialised knowledge across 6 continents. CDNetworks empowers customers to give

a new lease of life to their Web sites and applications ranging from e-Commerce companies

to businesses in finance/forex, travel, learning management, technology, manufacturing, and

media. Companies such as Tesco, Shopify, Dell, Mailup, Monin, Agent Provocateur, River Island,


Global Reach

Cloud Acceleration(DNS/Storage Load Balancing)

Web/App Acceleration

Cloud Security(DDoS/WAF/PCI)

Mobile CDN

SEA/China Expert



Hyundai, Bang & Olufsen, and Samsung trust CDNetworks as the go-to CDN service provider.

End-customer’s Perspective-Every Millisecond Counts

Asian countries offer huge market opportunities for online retailers to kick-start their operations

and flourish. With growing competition among global and local online retailers, customers are

getting spoilt for choices. With new companies offering unique products mushrooming every

day, new market leaders emerge every year and there is only one recipe for success: clear

understanding of customers-their current, future, implicit, and latent needs.

CDNetworks enables Web business companies to focus on their core businesses and not

worry about costs and Information Technology (IT) scale-up. It offers end-to-end CDN

solutions across the world for a unified customer experience without the need for a separate

CDN or data-centre solution for each country of operation. Its unique features not only help

organisations boost their Web performance globally, but also stay protected against Web

attacks and security threats. CDNetworks provides services across the globe with offices in

Singapore, China, South Korea, Japan, US, and the UK.

Southeast Asia and China-Huge Market Opportunities in Line with the Vast and

Growing Internet Community

China offers a gigantic business opportunity, due to its Internet-savvy population, with the

Internet penetration at 52%, as well as supplier and user market base. Keeping in mind the

market opportunities for new online Web businesses and the entry barriers in the country,

CDNetworks is uniquely positioned to help online retailers capitalise on extensive knowledge

and experience, navigating the business and governmental landscape. With a robust CDN/

Application Delivery network (ADN) infrastructure that optimises content and application

delivery across China’s multiple Internet Service Providers (ISPs) and global operations,

CDNetworks provides full scalability, reliability, and performance for content delivery and

CDNetworks provides 25 POPs in Mainland China with

a 55Gbps capacity to local users, complementing

200+ POPs located across 6 continents, providing

a global capacity of >3.7 TBps. It is the highest

performing global CDN with the lowest latency in

China and advises clients on ISP and Internet Content

Provider (ICP) licensing to ensure access into the

Chinese domestic market.

application performance with its

China Acceleration Solution.

With presence in Southeast Asia

in countries such as Singapore,

South Korea, Japan, Vietnam,

Indonesia, Malaysia, Thailand,

Myanmar, Taiwan, Cambodia,

Mongolia, and the Philippines,

CDNetworks covers almost every



e-Commerce Retailers—The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers—The Next Billion $ Opportunity - Are We Ready?

important country, making it an attractive service provider.

Dynamic Web Acceleration Critical for Online Retailers and Software-as-a-Solution

(SaaS) Providers to Deliver High-quality Experience to an Increasingly Dispersed

User Base

Unfortunately, even the most optimised origin servers cannot guarantee high and consistent

levels of performance, because they are susceptible to delays and other performance problems

caused by Internet latency and congestion. Technologies such as caching, content delivery,

and intelligent routing do not adequately address the performance requirements of dynamic,

Web-based applications, as they are non-cacheable and time-sensitive. The real culprit for

disparity between a low round trip time and multi-second latency impact lies within the TCP

and HTTP protocols.

CDNetworks’ dynamic Web acceleration is an on-demand Web application acceleration service

that enables organisations to quickly and reliably deliver applications and dynamic content

from the cloud or a centralised infrastructure to users around the world. By speeding up and

optimising the way servers interact with the Internet, the solution accelerates application

response times.

The platform comprises a global network featuring 2 types of specialised server clusters:

EDGES, through which users access the network, and SHIELDS, through which customers’

applications are made available to end-users. Its global DNS re-direction and IP address-

mapping system transparently directs users to customer applications optimised by dynamic

Web acceleration services.

Match Made in Heaven

With an open platform solution, ease of integration, and novel ways to approach TCP/

HTTP inefficiencies, CDNetworks is an ideal choice for the Southeast Asian market’s Web

businesses that use dynamic and interactive Web applications. When compared to other

CDNs, CDNetworks approaches TCP/HTTP inefficiencies differently. It caches the same

content, and at the same time, optimises major portions of the content that are dynamic

and non-cacheable and does not distribute content or application code, but utilises a high-

performance transport protocol across the middle mile instead. The result is that distance-

induced delay is greatly minimised.





Swords and Shields

In the digital, data-intensive, and connected world of today, as businesses increasingly

move online-be it e-Commerce or a Web site of a Fortune 500 company-organisations are

challenged to protect their Web sites and infrastructure without sacrificing performance.

Today’s online retailers spend sleepless nights worrying about cyber attacks that can not only

cripple the Web infrastructure but also jeopardise their biggest strength-the confidence of

their customers.

long-term implications were DDoS attacks, data breaches, and permanent data loss.

A DDoS attack cripples the Web site server, so that it does not respond to legitimate user

requests and often renders the Web site useless for hours, or even days, resulting in loss of

revenue, customer trust, and brand authority. However, businesses want it all: secure data and

applications accessible anywhere from any device, which is possible with cloud technology,

although there are inherent challenges to making it a reality.

CDNetworks’ Cloud Security Solution Uniquely Integrates Web Performance with

the Latest in Cloud Security Technology to Keep Customers’ Web Sites Both High-

performing and Secure

CDNetworks addresses DDoS attacks through its intelligent, flexible, and scalable cloud-

based infrastructure and sophisticated monitoring systems. It identifies and disperses among

its multiple absorption POPs any unusual traffic spikes targeted at the original customer

Web site. It also provides intelligent WAF technology, fully integrated with the global CDN

and monitored 24x7, which can stop layer 7 attacks, including DDoS, SQL injections, and

behaviour-based complex logics.

Smartphone adoption in APAC will nearly double-from 1 billion users in 2014 to 2 billion in

2019. Growth markets such as India, Indonesia, Japan, Malaysia, Thailand, Vietnam, and the

Philippines will drive this growth across all age groups. With the region set to become the

CDN aligns to the technical requirements of PCI

Standards, regarding system-level and application-

level policies, including log data centralisation,

monitoring, and reporting for security and audit

purposes.

During the RSA Conference held

in March 2016, Cloud Security

Alliance (CSA) released a report

on the top security threats

organisations face while using

cloud-based solutions. Among

the major threats that caused



e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers - The Next Billion $ Opportunity - Are We Ready?e-Commerce Retailers—The Next Billion $ Opportunity - Are We Ready?

largest e-Commerce market in the world, mobile devices are ‘a retail destination’, as they allow

people to access supermarkets, marketplaces, boutiques, and niche stores on-the-go. With

the increasing proliferation of mobile phones and devices for e-transactions, mobile content

delivery is a unique challenge that needs to be addressed for a unified customer experience.

CDNetworks’ mobile CDN technology enables mobile network operators (MNO) to achieve

up to 30% faster mobile content delivery and 20% reduction in mobile data traffic. Its mobile

CDN technology enhances the mobile user experience with radio access network (RAN)

acceleration at the same time. It uses technologies such as text compression (to reduce

mobile data traffic), video pacing (to reduce excessive progressive video downloading), and

TCP acceleration (tuned to fit the mobile operator’s network environment) to enable a faster

mobile accessing service.

LAGGARDS IN WEB BUSINESS

WILL PAY THE PRICE

For those Web businesses that do get it right, the rewards are overwhelming. Web performance

that is not only fast and nimble but also consistent across every click, everytime, and in every

device a customer uses, wins the customer’s heart.

The adoption of an immersive CDN supported by cloud security to increase the overall Web

performance for Web-based businesses explored in this paper will help organisations manage

their internal needs to provide seamless service to their customers. As technologies evolve,

the proliferation of Internet and smartphones increases, making competition intense. As

Web businesses feel the pressure from customers, smart services from companies such as

CDNetworks will be a boon to the online marketplace.

ASEAN is at the cusp of a digital revolution; however, only those who are ready will be able to

participate and reap the benefits.



Case Study

Who is Qoo10 (Giosis)?

Giosis is a company backed by eBay, the world’s largest online marketplace, to become Asia’s

leading online marketplace. Giosis provides a powerful online platform that allows its buyers

to enjoy a highly secure and convenient shopping experience. Qoo10 was named Gmarket

initially and was renamed Qoo10 in 2009. Qoo10 is the fastest growing online marketplace in

the world and offers an innovative e-Commerce platform, providing customers fun, convenient,

price-competitive, and secure shopping experiences for reliable goods and services from all

over the world.

What Does it Do?

The company operates 7 localised online marketplaces in countries including Japan, Malaysia,

Indonesia, and Singapore and plans to operate in many more Asian countries. Its vision is

to bring together diverse buyers and sellers worldwide and provide an enjoyable shopping

experience.

Qoo10 sells a large variety of products including clothing lines, fashion products, sports

products, beauty and health products, digital and mobile products, and much more.

Baby / Food

Entertainment Q-Deal / Ticket

Digital


Beauty / Diet

Women’sFashion

Men / Sport

Living

GIFT VOUCHER100$ing

GIF

1



Qoo10’s Business Challenge

Qoo10 was rebranded from Gmarket, which has a huge following in South Korea, and was

launched across various Asian countries. Gmarket was a South Korean online auction and

shopping Web site, where people from all around the world could buy and sell goods and

services. With product procurement across multiple countries, as well as a diverse base across

various Asian countries, Qoo10 faced unique business challenges to serve all its customers

with the same spirit of customer experience.

With customer focus at the heart of its business strategy, Qoo10 aims at serving its customers

and its vendors with fast Web performance solutions to enhance their experience. When

the industry was in its nascent stage in Asian countries, specifically Indonesia and Malaysia,

Qoo10 had to act fast and implement a solution that creates an equitable status of service if

not an edge over competitors, as customers continue to adopt e-Commerce increasingly to

meet their shopping needs.

Year when online shopping witnesses a spike across the region, Qoo10 was in a comfortable

position due to the use of content acceleration enabled by CDNetworks, which helped in

quickly scaling up the site’s capacity.

Qoo10 selected CDNetworks to provide content

acceleration and dynamic Web acceleration to

improve its Web performance across the operating

countries. With growth and expansion plans across

multiple Asian countries, choosing a CDN solution

such as CDNetworks appeared as an obvious choice

considering its strong expertise in the region with

services in Southeast Asia-including China, which is

the most important consideration for Southeast Asian

online shopping participants.

- Hyunwook Cho, Country Manager, Qoo10 Indonesia

Solution for Qoo10

CDN not only accelerated page

download times by reducing the

time taken to load a page by

81%, but also reduced the total

data transferred by 97%. This

helped in increasing the uptime

of the Web site, thus increasing

the reliability and generating

a positive user experience for

users in the region. During busy

seasons, such as the Chinese New


Auckland

Bahrain

Bangkok

Beijing

Bengaluru

Bogota

Buenos Aires

Cape Town

Chennai

Colombo

Detroit

Dubai

Frankfurt

Iskandar, Johor Bahru

Istanbul

Jakarta

Kolkata

Kuala Lumpur

London

Manhattan

Mexico City

Miami

Milan

Mumbai

Moscow

New Delhi

Oxford

Paris

Pune

Rockville Centre

San Antonio

Sao Paulo

Seoul

Shanghai

Shenzhen

Silicon Valley

Singapore

Sophia Antipolis

Sydney

Taipei

Tel Aviv

Tokyo

Toronto

Warsaw

Washington D.C.

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ABOUT FROST & SULLIVANFrost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough

best practices, changing customer dynamics and emerging economies? Contact us: Start the discussion.

To join our Growth Partnership, please visit www.frost.com.

ABOUT CDNETWORKSCDNetworks is a global content delivery network (CDN) with fully integrated cloud security DDoS protection and Web application firewall. Our mission is to transform the Internet into a secure, reliable, scalable, and high-performing application delivery network. CDNetworks accelerates more than 40,000 Web sites and cloud services over a network of 200+ global POPs in established and emerging markets including China, Southeast Asia and Russia. We have been serving enterprise customers for 15 years across industries such as e-Commerce, gaming, finance, technology, manufacturing, and media. CDNetworks offices are located in Singapore, China, South Korea,

Japan, US and UK. For more information, please visit: www.cdnetworks.com.sg

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