According to Max Ueno, the company's APAC managing director, Asia-Pacific’s e-commerce market is going to have a “monumental year”. According to eMarketer estimates, market size of e-commerce in Asia will surpass North America this year and be equivalent to both North America and Western Europe by 2017. “Asia-Pacific is a strategic region for Criteo,” he said. “The size of the e-commerce market is an indicator of that.”
Criteo, which has offices in Tokyo, Seoul and Sydney, launched operations in Singapore and Beijing last year. More recently, the company opened a data centre in Hong Kong and put in place a research and development team in Vietnam.
The firm, which went public last year, saw its quarterly revenue increase 66.3 per cent to $165 million and is valued at a solid $1.8 billion. Some of that success can already be attributed to the company’s performance in Asia. Japan has quickly become one of the most successful markets for Criteo, representing 22 per cent of the firm’s revenue. This is partly because of Criteo’s partnership with Yahoo Japan, giving it exclusive access to the internet company’s inventory.
“That was a gamechanger for us,” Ueno said. Yahoo Japan is an investor in Criteo’s parent company and a minority shareholder of its Japanese venture. Although Ueno would not disclose numbers, he claimed Australia and Korea are also growing steadily.
Overall, he said, the programmatic landscape is moving quickly in the region, despite the delayed entry of real-time-bidding (RTB) exchanges. Ueno sees 70 per cent of supply coming from RTB exchanges in Australia, a market he says is easy for Western ad exchanges to enter. Supply is much smaller in Japan, where exchange players like Rubicon, PubMatic and AppNexus only started operations last year. In Korea, Google is still the only player and in China a vast majority of inventory still gets sold on a cost-per-time or cost-per-day basis, while remnant inventory is on RTB platforms.
“There are a couple things holding growth back," Ueno said. "The first is around publishers still trying to understand how the exchanges work. And the second is infrastructure.” On the latter point, he said that in addition to the Hong Kong data centre, Criteo has expanded its server capacity in Tokyo. “These investments are key when it comes to programmatic," he said. "There’s a latency problem if you have to communicate across the Pacific ocean.”
Globally and in the region the company is focused on mobile, which accounted for 15 per cent of its total revenue at the end of March. In Japan this figure is at a lofty 26 per cent. Mobile for Criteo consists of retargeting on mobile websites and in applications. To that end, it acquired mobile technology companies AD-X Tracking, which optimises mobile campaigns, and Tedemis, an email serving platform. Ueno admits that Criteo is interested in video, but declared it “won’t happen tomorrow”.
Messaging platforms like WeChat, Line and Kakao are important to Criteo’s business in the region as well. “Their presence in the market is becoming very important because of the amount of time users spend on these platforms.” WeChat, for instance, now has capabilities like internet banking and the Chinese version of Uber. The company will look to forging partnerships with these players once they open up their inventory.
Asked how Criteo competes with end-to-end players like Google, Ueno cited a statistic: 90 per cent of customers are repeat advertisers over the last 15 quarters. “We work with 6000 advertisers and 7000 publishers," he said. "You can’t build that volume overnight.”
The APAC MD counts Agoda, Zalora and Thailand’s Tarad.com amongst its top advertisers in the region.