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CHELSEA CONNECT

LET’S CONNECT

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ello and welcome to the first issue of Chelsea Connect, our very own online internal newsletter to be released every month. The purpose of this communication platform is simple – to keep everyone abreast of what’s happening within and outside the organization. As cliche as it may sound, the quote “Knowledge is power”, still rings true today. Chelsea employees need to be well-informed and updated so no one will be left behind, and everyone can make informed decisions. If you have any department or industry update, whether good or bad, we encourage you to share these with everyone in the organization. Coincidentally, our first issue is a real treat as it features Chelsea Shipping’s 13th Anniversary. Without Chelsea Shipping – the backbone of our existence as a Group – there will be no Chelsea Logistics and Infrastructure Holdings Corp. Every Chelsea Shipping anniversary should remind us that we were borne out of a developmental vision to service our affiliate, Phoenix Petroleum’s need

to transport petroleum and other bulk liquid products. Yet, from that starting ground, the Company embarked on ambitious expansion plans which have propelled it to greater heights. Fast forward to today, Chelsea dominates the country’s shipping and logistics industry and owns 24 companies under its wings, employing more than 2,000 people nationwide. With the breadth and depth of our growth as a Company, it is important that we help one another to stay connected through knowledge sharing. Remember, “A candle loses nothing by lighting another candle.” So starting today, light somebody else’s life, pass on your knowledge, be hungry to learn something new every day, and get ready to CONNECT.

Chryss Alfonsus V. Damuy President and CEO


CHELSEA CONNECT

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The purpose of this communication platform is simple – to keep everyone abreast of

what’s happening within and outside the organization.


CHELSEA CONNECT

Contents

EVENT 06 HIGHLIGHTS Chelsea launches “M/V Trans Asia 20” Ro-Ro Passenger Ferry

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Udenna Group celebrates Bankers’ Night

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Udenna, Chelsea, and China Telecom receive ‘permit to operate’

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Office Move Ushers In a New Star t for the Udenna Group

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Chelsea par ticipates in the 2nd Logistics Ser vices Philippines Conference

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M/T Chelsea Cher ylyn to rejoin the fleet

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You can’t crush ideas by suppressing them. You can only crush them by ignoring them. By refusing to think, refusing to change.

URSULA K. LE GUIN

Change is the law of life. And those who look only to the past or the present are certain to miss the future.

JOHN F. KENNEDY

THOUGHTS TO PONDER


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18 SPECIAL FEATURE Rising Above the Waves: Chelsea Shipping’s 13th Anniversary

INDUSTRY DIGEST MARINA to stakeholders: Ensure maritime safety at all times

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Duterte signs EO 84 institutionalizing IMSAS Council

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Gov’t drafting executive order to address high shipping costs

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Smart packaging technology pushed

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Five key benefits of digital logistics

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Dawning of cheaper, faster Internet in PHL

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Better connectivity unlocks opportunities for Pinoy online retailers

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CHELSEA CONNECT

CHELSEA LAUNCHES

TRANS-ASIA 20”

“M/V

RO-RO PASSENGER FERRY

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helsea launched the 98-meter “M/V Trans-Asia 20” Bed/ Seat Ro-Ro Type Passenger Ferry at a ceremony held at Kegoya Dock Co., Ltd.’s Japan shipyard. The ship M/V Trans-Asia 20 (Hull No. S-1190) is scheduled to be delivered in October 2019. It can carry a total of 740 passengers, 22 buses, and 6 trucks, providing better service to Filipinos which is a principal objective of Chelsea. This is the Chelsea Group’s 10th brand new RoPax made in Japan. The launch of M/V Trans-Asia 20 coincided with the Keel Laying Ceremony of the vessel with Hull No. S-1191 which marks the official start of construction of another 98-meter Bed/Seat Ro-Ro Type Passenger Ferry. It has a gross tonnage of 5,100 with carrying capacity similar to M/V Trans-Asia 20 and will be finished and delivered in April 2020. To cap the launching and keel-laying ceremonies, Chelsea inked a new shipbuilding agreement with another shipyard in Japan.

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05 JULY 2019

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CHELSEA CONNECT

UDENNA GROUP CELEBRATES

BANKERS’ NIGHT

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he Udenna Group of Companies hosted the 2019 Bankers’ Night, a thanksgiving party for its friends and partners in the banking industry and capital markets for their unwavering support for the past 17 years. The banking community has played a vital role in the Udenna Group’s journey towards business expansion and diversification. Having started in 2002 with just one oil company, Udenna has grown to six business pillars namely oil, gas, and retail; to shipping and logistics; gaming and tourism; education and food; property development and management; and infrastructure including telecommunications. The Group now employs over ten thousand people while helping improve the lives of 107 million Filipinos. To add spice to the event, Chelsea President & CEO Chryss Alfonsus V. Damuy raffled off 3 Starlite Ferries gift couchers for 1 VIP Room Accommodation, good for three people, for a roundtrip from Batangas to Caticlan.

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08 JULY 2019

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UDENNA, CHELSEA, AND CHINA TELECOM RECEIVE

‘PERMIT TO OPERATE’

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pon receiving the Certificate of Public Convenience and Necessity (CPCN) or ‘permit to operate’ from the National Telecommunications Commission (NTC), Udenna Group Chairman Dennis A. Uy announced the renaming of Mislatel to Dito Telecommunity.

After complying with the requirement of PhP 10 billion additional paid-in capital and the submission of a performance bond, Dito has now been granted nearly 70% of the available 5G frequencies, allowing the new telco player to extensively test the network and start commercial operations in 2020, covering 84% of the Philippine population.

To come out with a better and more robust offering, Dito will first conduct a pilot user program towards the end of 2019. It will launch only 4G services and will no longer offer legacy 2G and 3G systems.

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08 JULY 2019

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OFFICE MOVE USHERS IN A

START

NEW

FOR THE UDENNA GROUP

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he Udenna Group celebrated the move of its Manila Headquarters into a new and larger office building - the Udenna Tower, located at Rizal Drive corner 4th Ave., Bonifacio Global City, Taguig City. The new 24-storey office building will provide a more conducive working environment for Udenna employees. With this significant milestone, Udenna employees will be more inspired to work efficiently and render better service and value to their stakeholders. The Udenna Tower stands on solid ground, a testament to the fact that along with our growing team is the rapid expansion of the Group’s business activities. Present at the Tower's blessing were Udenna Chairman Dennis A. Uy, Udenna Director Cherylyn C. Uy, and the business pillar heads including Bong Fadullon of Phoenix Petroleum, Marty Escalona of PH Resorts Group, Freddie Placino of Clark Global City Corp., and Jomel Fuentes of Udenna Infrastructure.

11 JULY 2019

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CHELSEA CONNECT

2ND LOGISTICS SERVICES PHILIPPINES CHELSEA PARTICIPATES IN THE CONFERENCE

In the photo from left are Day 1 Panel Members: Chelsea Logistics and Infrastructu Companies Founder and Chairman Alberto D. Lina, San Miguel Integrated Logistic and CEO Dexter A. Silva, and Mstar Ship Agencies, Inc. EVP and General Manager

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osted by the Department of Trade and Industry, the 2nd Logistics Services Philippine Conference was held from July 15 to 16, 2019 at the Philippine International Convention Center (PICC), Pasay City, with the theme “Logistics 4.0 Towards an Innovative and Inclusive Logistics Services Sector�.

15 JULY 2019

ure Holdings Corp. President and CEO Chryss Alfonsus V. Damuy, Lina Group of cs Services, Inc. Consultant Jorge San Agustin, Worklink Services, Inc. President Patrick Ronas.

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CHELSEA CONNECT

In the photo from left are Worklink Services, Inc. President and CEO Dexter A. Silva, Chelsea Vice President for Marketing and Port Operations, Raul L. Quisumbing, and Chelsea President and CEO Chryss Alfonsus V. Damuy. On the Philippines having the highest logistics cost among its Southeast Asian neighbors:

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On the future of logistics in the country:

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A high speed train is ideal to provide more efficient logistics services, however, it takes more than 10 years to develop. In the meantime, a feasible solution would be opening up new points of delivery and distribution closer to the market, thus reducing logistics cost, and removing the burden from end-users.

While automation of logistics services is important, we also have to exert extra effort on people development to retain good employees and strengthen their commitment to the tasks entrusted to them. - DEXTER SILVA

- CHRYSS DAMUY

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CHELSEA CONNECT

Chelsea celebrated M/T Chelsea Cherylyn’s return to operation, after a hiatus for dry docking since November 2016. The 112.10-meter M/T Chelsea Cherylyn has a gross tonnage of 4,126 with a carrying capacity of 6 million liters of petroleum products.

30 JULY 2019

M/T CHELSEA CHERYLYN REJOINS THE FLEET

“We are pleased to see Chelsea Cherylyn back to operations and sailing the Philippine seas once again. Having M/T Chelsea Cherylyn re-join the fleet is indeed a positive step for Chelsea Shipping and will definitely have a positive impact on our balance sheet. We are more than excited to serve our customers and shippers who have waited for her return,” said Chelsea President & CEO Chryss Alfonsus V. Damuy.

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RISING ABOVE THE WAVES

Stringent Regulation of the Maritime Environment and Volatile Market Conditions

Nature has its own ability to create remarkable works of art over time. The Kapurpurawan Rock Formation in Ilocos Norte is a prime example of this ability. It was  sculptured by nature through time by a process called sedimentation. As  the sun shines on the  furious waves of Bangui Bay, endlessly crashing into the shiny white Kapurpurawan Rocks, a dramatic pictureperfect scene is created leaving tourists in awe.

The shipping industry is reliant on global trade. The International Monetary Fund (IMF) forecasts global GDP growth to slow from 3.6% in 2018 to 3.3% in 2019, before returning to 3.6% by 2020.

According to the Baltic and International Maritime Council (BIMCO), the continuous escalation of the trade war between the U.S. and Chinese economies this 2019 will not only hurt their respective countries but also the global economy. This slowing global economy and intensification of the trade war pose major threats to global seaborne trade.

Gleaned from this remarkable natural phenomena, adversities have now and again challenged Chelsea, but the same have undeniably made it tougher, stronger, and more resilient, and have earned admiration from the community where it serves and operates. In the midst of challenges, Chelsea learned to surf and rise above the waves.

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The Maritime Industry Authority (MARINA) has continuously enforced stringent policies to promote a more sustainable shipping industry. Guided by the International Convention for the Prevention of Pollution from Ships (MARPOL Convention) of the International Maritime Organization (IMO), the MARINA is implementing a ship modernization program and has formulated a comprehensive plan for the implementation of the global 0.50% sulphur cap in 2020 by identifying other alternative sources of ecofriendly and affordable fuels. In addition, the country’s fragmented shipping industry fosters tighter passenger and freight rate competitions for the safety of passengers and cargos.

vessel equipment, and improvement of port facilities, containers and terminal equipment, many investors were not able to meet their financial objectives with the newly listed Company.

Rising above the Waves Although defeat has seemingly overtaken Chelsea, the team didn’t stop from working hard because the Company believes that every opportunity is disguised in the form of misfortune or temporary defeat. Chelsea recognizes growth and opportunities early on, hence, against the negative backdrop, Chelsea all the more persisted and pursued stronger synergies among its subsidiaries.

These global and domestic factors have hugely affected Chelsea’s operations, but it withstood and slowly recovered from the odds. The vessel modernization program was implemented, and a younger and more efficient fleet is now in operation.

Through promising investments and strategic partnerships, the wheel of fate turned favorable. Slowly the public’s trust was gained via constant and effective communication coupled with excellent service for the stakeholders. The coming years look brighter as there is a continuous strengthening of  long-term market position through  holistic logistics and shipping services, and expansion of national and regional coverage.

The heavy cost  of improving and upgrading  practices  were undertaken by the Company in order for it to be at par with international standards. The industrial and digital innovations  improved Chelsea's services and helped it stay relevant with existing market conditions.

Furthermore, Chelsea continues to augment its telecommunications base and logistics infrastructure facilities and systems. The designated third telco, DITO Telecommunity, is now on track with its 5-year rollout plan with commercial operations set to begin in the first quarter of 2020.

Chelsea's Market Debut in the Capital Markets On 8 August 2017, our Company debuted on the Philippine Stock Exchange (PSE) under the symbol ‘(CLC)’ and has successfully raised PhP 5.8 trillion by offering 5.46 Million primary common shares at an initial price offer of PhP 10.68 per share. However, on the day of its IPO, Chelsea closed in the red as investors continued to take profits after seeing gains early on.

Regardless of the challenges, Chelsea's head remains above the waters. The waves may crash violently pushing it back, but Chelsea, like the Kapurpurawan Rock Formation, can weather the pounding waves and shine brighter with its smoothened jagged corners.

- Michelle Clerigo While the money raised in the IPO was used for the acquisition of new vessel and

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Congratulations to our five-year and 10-year service awardees. We salute the 36 sea and land-based employees for their unwavering support and dedication to the Company. May God continue to bless the work of your hands and fulfill all your dreams.

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INDUSTRY DIGEST MARINA to stakeholders: Ensure maritime safety at all times MARINA, 08 July 2019

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CHELSEA CONNECT

Duterte signs EO 84 institutionalizing Council

MARINA, 12 July 2019

PRESIDENT Rodrigo Roa Duterte signed Executive Order No. 84, institutionalizing the Inter-agency Council on the IMO Member State Audit Scheme (IMSAS).

Cebu Port Authority (CPA) act as members. EO 84 serves as the legal framework of the IMSAS Council to fulfill its functions relative to the adoption of the provisions of applicable international instruments and conventions, as well as mechanisms to certify that the Philippines fully satisfies its responsibilities as a flag, port, and coastal State. Above all, the IMSAS Council shall ensure that its member agencies fully and effectively implement and enforce the IMO Instruments in an integrated manner.

The IMSAS Council is composed of the Department of Transportation (DOTr) Secretary as Chairperson and Maritime Industry Authority (MARINA) Administrator as Vice-Chairperson. Representatives from the Department of Foreign Affairs (DFA), Philippine Coast Guard (PCG), Philippine Ports Authority (PPA), and

Government drafting Executive Order to address high shipping costs

Business World, 15 July 2019

shipping costs and introduce port reforms to address inefficiencies. The JAO is awaiting the signature of the DoF. Mr. Lopez said the DoF has legal issues such as which agencies will be responsible for enforcing certain provisions, and international shipping rates.

THE PHILIPPINE GOVERNMENT is drafting an Executive Order (EO) which will address high shipping costs, Trade Secretary Ramon M. Lopez said. The EO will specify the agency that will really be accountable for the setting of shipping rates and replace the JAO upon its effectivity. In his speech at the 2nd Logistics Services Philippines Conference on 15 July 2019, Mr. Lopez said he plans to reconvene the technical working group that issued a joint administrative order (JAO) on the matter to work on the EO. The target date for the issuance of the initial draft is one month. The JAO, issued by Departments of Trade and Industry (DTI), Transportation (DoTr) and Finance (DoF), sought to regulate

Mr. Lopez said rates are freely set at the moment, and the government is looking at how , they can be managed to avoid overcharging. According to a study conducted in 2017 by the World Bank, “An Assessment of Logistics Performance of Manufacturing Firms in the Philippines,” logistics costs as a percentage of sales were estimated at 27.16%, compared with Indonesia’s 21.4%, Vietnam’s 16.3% and Thailand’s 11.11%. Mr. Lopez said the target is to lower the cost ratio to at least 20% by the end of year.

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INDUSTRY DIGEST Smart packaging technology pushed Sunstar, 30 July 2019

FILIPINO companies, especially those engaged in food business, are encouraged to use smart packaging technologies to ensure product safety and quality which are key drivers of competitiveness. “For exporters, it will ensure the quality and safety of their products. It can directly communicate with the consumers because it has indicator. You can immediately see if your product is fresh or not,” said Daisy Tañafranca, chief of the Packaging Technology Division of the Department of Science and TechnologyIndustrial Technology Development Institute (DOST-ITDI).

Smart packaging technology includes the use of the following logistics and supply chain management strategy: (a) active packaging - preserves freshness of the food item (e.g. delays the ripening of banana and mango, extends the shelf life of bread) (b) intelligent packaging- monitors the condition of packaged foods, and provides information on the quality of the packaged goods during transport and storage (c) Radio Frequency Identification (RFID) provides tagging and tracking system for food and other goods Tañafranca noted many developed countries are already using smart packaging technologies.

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CHELSEA CONNECT

Five key benefits of digital logistics PortCalls Asia, 22 July 2019

THE DIGITAL MAKEOVER for 3PL and freight companies is no longer a distant goal, but a vital ingredient in the industry’s success today. With the increase in need for speed and mobility the role of digital technology has become all the more vital for the logistics business. A modern single software to manage your business is highly recommended towards this end. With that in mind, here are five benefits 3PL and freight companies can derive from an enterprise-wide single digital platform:

Strong Foundation. A modern single

enterprise wide software offers a strong foundation for a digital logistics. It offers comprehensive solution enhanced work processes with deep data insights and better control over the entire organization.

Collaboration and Transparency. In

order to deliver a great and satisfactory digital experience to customers, 3PL and freight companies must identify, select and implement an enterprise-wide digital platform in the form of a single software. This will introduce an environment of collaboration and transparency as every stakeholder in the organization will be working on the same platform.

vendors, the chance of a gap in communication between softwares is high. A single software also means lesser risks of data loss and errors and improved access to quality data. This helps in better planning and decision making.

Efficiency. A modern single software can offer

better mobility with anywhere any time access for management and employees with real-time data and enhanced insights. With access to reliable and accurate data and comprehensive management capabilities that a modern single software offers any organization can achieve greater efficiency in its work process leading to enhanced client servicing capabilities.

Leaner Meaner Organization. With a

single software companies can afford to cut down on manpower resources leading to a leaner and meaner organization. There can be a considerable increase in productivity of the organization due to work process efficiencies that require lesser personnel to manage the work. Digitalization is the backbone of 3PL and freight companies in today’s competitive environment. With a modern single software, companies can benefit greatly in terms of efficiency and profitability.

Reliable and Accurate Information.

A single software ensures seamless flow of information. This is often not possible in cases where multiple softwares are integrated. In spite of the best efforts and intentions of

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INDUSTRY DIGEST Dawning of cheaper, faster Internet in PHL Business Mirror, 11 July 2019

Will Dito Telecommunity be up to the challenge? In the presence of President Duterte, officials of the new telco player promised to offer 55 Mbps of Internet speed that covers 84 percent of the population in five years. This is much better than the country’s prevailing Internet speed of 5.5 Mbps.

TWO LANDMARK EVENTS happened in the country’s telecommunication industry in July.

01 July 2019 - the President swore into office former Sen. Gregorio “Gringo” Honasan II as secretary of the Department of Information and Communications Technology. 08 July 2019 - the Certificate of Public Convenience and Necessity (CPCN) or permit to operate was finally awarded to the third telco player, Dito Telecommunity (composed of Udenna Corporation, China Telecom and Chelsea Logistics and Infrastructure Holdings Cop.). In a speech during the awarding ceremony in Malacañang, Duterte said: “The entry of Mislatel Consortium is indeed a milestone in our efforts to provide fast, reliable, secure and more affordable telecommunication services to the public. Let me take this opportunity to pose this challenge to Mislatel: Break the prevailing duopoly in the telecommunications industry and fulfill your commitment to provide better telco services to our people.”

Dito Telecommunity Corp. intends to spend P257 billion in infrastructure and service rollout during the period. Initially, it will launch only 4G services and will no longer offer legacy 2G and 3G systems. The plan is to first conduct a pilot user program toward the end of this year to test the network in order to come out with a better and more robust offering. Dito Telecommunity said in five years, it will be covering the country with 5G, with speed offerings that are much faster than what is currently being offered. It promises to offer cheaper and faster telco services without having to replicate the paths taken by its established competitors. When this happens, more than a hundred million Filipinos, who have been suffering from slow and expensive Internet services for the longest time, will be the ultimate winner. After all, competition is the best tool to promote consumer well-being.

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CHELSEA CONNECT

Better connectivity unlocks opportunities for Pinoy online retailers GMANetwork, 31 July, 2019

The e-commerce landscape in the country is benefiting from three significant factors that present online retailers new opportunities, according to UPS Philippines, citing a recent study in online shopping. “Better internet connections, increased smartphone use and a new generation of more tech savvy consumers means the e-commerce landscape in the Philippines is becoming increasingly competitive,” said Chris Buono, UPS Philippines Managing Director. “This is unlocking new opportunities for online retailers in the Philippines to grow both their domestic and international customer base,” Buono emphasized.

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Now in its seventh year, the UPS Pulse of the Online Shopper study sheds light on consumer online shopping behavior. It also, for the first time, features insights into the buying habits of business purchasers. Conducted in Australia, China, Hong Kong and South Korea, as well as 11 other markets across the Americas, Europe and India, the study tracks evolving trends and demands from e- commerce customers. - Consumers in Asia Pacific are increasingly knowledgeable about the options available to them when shopping online, and this is driving a demand for complete clarity and access to information throughout the purchase journey, as well as greater flexibility in both the shopping and shipping process. - As consumers are presented with more options to buy online and competition increases, the ability of retailers to offer incentives not just in the form of a unique product offering but also in the shipping and delivery experience will be crucial to success in the evolving e-commerce landscape - A significant 90% of all consumers globally research their product before proceeding with a purchase. While price is the most commonly researched information worldwide, by comparison it is less important for consumers in Asia Pacific (74%), than for those in the Americas and Europe (both 81%). - Shoppers may cancel a purchase when they find out the retailer is based internationally, if they were unaware of this initially. Seventy-seven percent of shoppers in China have done this, as well as 65% in Australia, and 60% in Hong Kong and South Korea. - At the same time, 75% of all shoppers in Asia Pacific have knowingly made purchases from international sellers, suggesting that online shopping is situational and, with international purchases likely taking longer to arrive, how long a customer is willing to wait may depend on what they are buying.

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CHELSEA CONNECT

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JOIN THE CHELSEA CONNECT TEAM If you have the passion for writing and you think you have what it takes to produce relevant stories of vital importance to Chelsea and the shipping and logistics industry — then we want to hear from you! If you’re interested, feel free to email us at corporatecommunications@chelsealogistics.ph

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DAVAO HEAD OFFICE

Stella Hizon Reyes Road Bo. Pampanga Davao City 8000 Tel: +6382 224.5373

MANILA OFFICE

12th Floor Udenna Tower, Rizal Drive corner 4th Avenue Bonifacio Global City, Taguig City 1634 Tel: +632 403.4015 Fax: +632 403.4022 Website: www.chelsealogistics.ph Email: info@chelsealogistics.ph Facebook: @ChelseaLogistics

Profile for Michelle Yvonne Clerigo

CHELSEA CONNECT VOLUME 1 ISSUE 1  

Chelsea Logistics and Infrastructure Holdings Corp. (C) offers a holistic shipping and logistics solution through its subsidiaries and affil...

CHELSEA CONNECT VOLUME 1 ISSUE 1  

Chelsea Logistics and Infrastructure Holdings Corp. (C) offers a holistic shipping and logistics solution through its subsidiaries and affil...

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