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Opportunities and Challenges Indonesian E-Tourism Summit 2011

Lim Lai Hock Director, Online Segment and Solutions

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Source: Internet World Stats

The world’s largest Internet user base

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The world’s fastest-growing middle-class

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Source: Internet World Stats, *Other Internet Statistics Websites (CNIC, ITU, NIIDA) and EDC Analysis

Country Internet

Penetration Rate (2009)

Internet Penetration

Rate in 2011 (Forecast)

Internet Users in 2009 (Million)

Internet Users by end of 2010

(Millions)

Forecasted Internet

User Growth (2009 to 2010)*

China 29% 32% 384 420 9%

Japan 75% 78% 96 99 3%

India 7% 8% 81 89 10%

Korea 71% 81% 37 49 30%

Indonesia 13% 13% 30 31 3%

Philippines 25% 30% 24 30 24%

Australia 78% 81% 17 18 7%

Thailand 25% 26% 16 18 9%

Hong Kong 68% 69% 5 5 4%

Singapore 73% 78% 3.5 3.7 9%

Indonesia’s Internet penetration rate is discouraging

… until you compare it with India

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Business fundamentals are unchanged

Same challenges apply

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Know the customers

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Source: Visa e-Commerce Tracking Survey 08

82% Being able to shop easily

88% Being able to shop at

any time

83% Get the best

prices Top

three Reasons for shopping

online

Why do consumers shop online?

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How loyal are online shoppers?

30%

42%

28%

Yes

Sometimes

No

You can increase retention rate to 72%

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What drive away consumers?

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It’s not just about who holds the mouse.

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Know the risks

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Travel is hardest hit by online fraud

Fraud Spend Penetration

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• Myth: All payment partners have same capability, choose the one with lowest fees & MDR

• Myth: Payment partner will absorb all risks so I can maximize my profit

• Myth: There’s ZERO risk doing business with us

Some e-commerce myths

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• Airlines (Source: CyberSource)

– US$5.5 Billion in lost sales volume – US$1.5 Billion written off, for payment fraud (~1.2%

of total revenue)

• Online Merchants (Source: Sage Pay)

– 68%: Payment fraud most daunting to manage

– 60%: Unaware if their provider is Bank Certified, PCI Compliant, and 3D Secure Certified • As a result, the merchant is non-compliant and liable

Hard facts about Online Fraud Risks

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• Online travel merchants

• fraud losses between 0.2% to 5% of top-line revenue

• Non-compliance of PCI can attract fines of 10K-20K euro from Visa and Mastercard

• Online payment is strategic to online business model

Unanimously voted by leading online merchants

More hard facts

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Build and maintain a competitive advantage

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• Traditional business growth potential is linearly constrained by your resources

• Online business growth potential can grow exponentially practically overnight

• Can existing business process cope if business volume doubled overnight?

Scalability matters … more than ever!

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Where can you drive more efficiency?

18%

18%

7% 7%

3%

47%

EngageBookFinalizeFinishingTicketingOthers

Average from a set of travel agencies around world and within Asia

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Drive online as a profitable business

As much as 30% of total ticket volume can be lost due to human

errors (eg ADMs)

Online business profitability should be managed even more aggressively than your traditional business

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Thank You