SINGAPORE—Asia, the region with the largest number of connected and digitally savvy consumers, is seen by multinational enterprise application-software provider SAP driving its global e-commerce business in the next four years.
“We have set ourselves a goal. We want to be a 5-million company [linked] on the Ariba Network by 2020,” SAP Ariba President Alex Atzberger said at the kickoff of the SAP Ariba Live at the Marina Bay Sands in Singapore on Tuesday.
He said over 2 million connected companies, including more than half a million in Asia, transacted nearly $1 trillion in commerce on their digital marketplace last year.
At a sideline interview, he told the BusinessMirror they aim to connect additional 3 million suppliers to the Ariba Network four years from now, with 1.5 million coming from the Asian region.
“We would have $3 trillion in transactions going over the network. So another $2 trillion [worth of transactions by then],” he noted. “I think, the 5-million [connected companies target] will be making it easier for suppliers to actually adopt the solution.”
The top executive is bullish on achieving this, given that most businesses in the region, whether big or small, have already reached the end-point of digital adoption and now move into the transformation stage.
“Right now, the rate of digitization is increasing and becomes faster,” he said.
He conceded there are still many companies starting with digital adoption.
“I think adoption is still a key part. We can still adopt the solutions much more today than we did in the past, especially in business-to-business commerce,” he said. “So I think, if you have more customers joining the network, if you make it easier for suppliers to join, and if digitization increases, all of these factors for small to large companies will mean that we can get to [reach] the 5-million [target].”
Upbeat on achieving such goal, he reiterated, they still need to add more capabilities for suppliers because there are those who want to be on the their platform.
“Also, we need to grow the customer base on the buyers’ side so that they can ask their suppliers to join the network. That’s a key part of that,” he said.
As of the second quarter ending June 30 this year, Asian companies used the SAP’s marketplace to source over $29 billion in goods and services, exchange more than 1.6 million purchase orders at an estimated value of $9.5 billion, process almost 1 million invoices worth close to $500,000, and share nearly $1 billion in new business opportunities through Ariba Discovery, the premier service for matching business buyers and sellers worldwide.
SAP Asia Pacific Japan (APJ) President Adaire Fox-Martin cited various factors why the region is primed for e-commerce.
“Half of the world’s Internet users exist in region. We have the largest regional e-commerce opportunity form a market perspective here in the region. And by 2018, [there will be] over 1.1 billion connected Asians in the region,” she cited. “Here in Asia, we have the youngest population on the planet and we have this amazing adoption of smartphones.”
While currently suppliers coming from the Philippines who use SAP Ariba to connect with exiting and prospective buyers are quite smaller than their counterparts in Asia, the company remains bullish on its growth potential in the coming years.
According to Atzberger, there are about 20,000 suppliers from the country out of its total network of 2 million firms connected to the platform.
“But the Philippine market, I think is already pretty good,” he said, while noting that the figure will likely increase further in the future. “I don’t have a specific number for the Philippines, but I think the growth in Southeast Asia is going to be faster than the total growth. In markets like the Philippines, I would assume that we will do four to five times more. So we probably go for 20,000 to 100,000 suppliers [by 2020].”
The president of SAP Ariba, said the locally grown-gone-global pharmaceutical firm United Laboratories Inc. (Unilab), helps them find suppliers here and abroad.
Being one of the early adopters of this digital marketplace, it has been successful in “deriving tremendous value” from it.
“As a CFO [chief financial officer], I’m particularly interested in the hard numbers,” said Unilab CFO Joselito Diga, who also spoke in the three-day conclave. “And I’m happy to say that our adoption has really provided tremendous ROI [return on investment] for our business, both in terms of sourcing and the efficiency of our procured pay processes.”
SAP Ariba delivers simplicity to the enterprise through its cloud-based applications and business network.
Considering that more and more Asian companies are using these solutions to digitize their operations and transform commerce, local enterprises are encouraged to also leverage on its benefits.
“When you join the network, you become visible to global companies. So if you’re a Filipino company that actually wants to do business with companies in Asia Pacific or in the United States and elsewhere in the world, you can be identified in the network and you can promote your business. And that’s a great opportunity for Philippine companies,” Atzberger said.
As China is becoming more expensive in this region that in turn a lot of manufacturing and more of the value chain moving to the Philippines and Vietnam, he said that this in an opportunity for local businesses to go to digitalization.
“Joining the network and the global digital economy is a chance that you should not miss,” he said.