What you need to know on entering the Chinese market through eCommerce. Presented at the China Digital Marketing & Social Media Submit 2013 in Sydney, Australia.
1. China market entry through eCommerce
Charles Chan, Managing Director of CLEARgo
The China Digital & Social Media Submit, Sydney - October 2013
2. By now you have heard the headline
$539 Billion
Online Expenditure
in China by 2015
from $212 Billion in
2013
3. Key Challenges in China market entry
Soaring Rent & Distribution Channel Cost
4. Variety of products, Convenience, Lower Prices are the key
factors for Chinese consumers to buy online. Pollution & traffic
jam also keeps shoppers from going out.
* Apple Store at Sanlitun (https://twitter.com/shannonfagan/status/290014772420829185)
5. Since the melamine milk scandal in 2008, various product safety
reports have destroyed consumers’ confidence in domestic
products and drive online cross border purchase.
9. Key Ingredients to Successful China Entry through eCommerce
1
Develop a China Consumer Strategy
2
Decide on the Right e-Channels
3
Setup a suitable Operations & Organizational Model
4
Build Traffic, Optimize Conversions, Acquire & Grow Customers
10. 1
Demographic of Chinese consumers is diverse
Competition is fierce in most categories
What’s your Brand’s STP in China?
(Segmentation, Targeting & Positioning)
11. 2. Deciding on the Right e-Channel
Different eCommerce Channel Models in China
brand.com
mall-operate branded store
brand-operate marketplace store
authorized online distribution
12. 2. Deciding on the Right e-Channel
In China, eCommerce has been marketplace driven
14. 2. Deciding on the Right e-Channel
Horizontal and Vertical eCommerce Platforms
Horizontal Platforms
Luxury
Cosmetics
Consumer
Electronics
Media
Grocery
Private Selling
Fashion
15. 2. Deciding on the Right e-Channel
UGG sells in both brand website and Tmall
16. 2. Deciding on the Right e-Channel
Coach closed its online flagship store in Tmall only one month
after it opened, and shifted to sell in its brand site instead
17. 2. Deciding on the Right e-Channel
Olay sells in almost all platforms
18. 2. Deciding on the Right e-Channel
The luxury divide on brand site and marketplaces
Brand
Site
Official eCommerce presence
No Official eCommerce presence
19. 2. Deciding on the Right e-Channel
So which channel is right for you?
Brand.com
Brand Image
Control
Demand Capturing
CRM/Loyalty Integration
Data Ownership
Setup & Operating Cost
Operations Complexity
Brand
Operate
Store @ Mall
Mall Operate
Store @ Mall
Distribution
Only
20. 2. Deciding on the Right e-Channel
Wait! Do you have a Chinese entity already?
Have you registered and trademarked your brand already?
21. 2. Deciding on the Right e-Channel
Tmall now allows foreign brands to setup without local entities
and sell to Chinese consumers as cross border transactions
23. 3. Setup a suitable Operations & Organizational Model
Payment methods in China
Alipay, China UnionPay, Direct Debit, etc
Most people don’t have credit card and are unable to pay non-RMB transactions
24. 3. Setup a suitable Operations & Organizational Model
“Fapiao” – not just an official invoice
This is how local Government keeps track of your Value Added Tax (VAT)
25. 3. Setup a suitable Operations & Organizational Model
Customer Service – Live Chat
Hotline & Live Chat for both Pre-Sales & Post-Sales is a must in China
AliWangWang is the standard
Live Chat platform for Tmall & Taobao
26. 3. Setup a suitable Operations & Organizational Model
Warehousing, Fulfillment & Delivery
A range of domestic and international providers
Service quality from domestic providers still varies but improving
Amazon Fulfillment Service
27. 3. Setup a suitable Operations & Organizational Model
In-house vs. Outsource
Outsource some or all aspects of the puzzle
Merchandising
& Inventory Mgmt
Customer
Care
Store Management
Marketing & CRM
Order & Fulfillment
Management
eCommerce
Technology
28. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
Grow your eCommerce business under the Chinese ecosystem
Acquisition
Conversion
Retention
Measurement & Optimization
Amplification
29. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
Grow your eCommerce business under the Chinese ecosystem
E-DM
Directory
Search
(SEM/SEO)
Display
Ads
Brand.com
CSE
Product
Search
Affiliate
Marketing
Social
Media
30. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
Tmall & Taobao have its completely separate ecosystem
聚划算
Group
淘宝客
直通车
Buying
PPC
CPS
Search
钻石展位
站内活动
PPC
Display
Event
Tmall
淘金币
淘帮派
Points
Community
微淘
Social
Shopping
一淘
CSE
31. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
The Single’s Day 11.11 has become the Black Friday of China
Brands now get to prepare for this day months ahead
US$3 Billion
Sold at Taobao &
Tmall in 24 hours
on 2012 Single’s
Day
33. Summary in China Market Entry through eCommerce
1
Develop a China Consumer Strategy
2
Decide on the Right e-Channels
3
Setup a suitable Operations & Organizational Model
4
Build Traffic, Optimize Conversions, Acquire & Grow Customers
34. About CLEARgo
CLEARgo is a Brand eCommerce Agency in HK & China
We help brands to grow in the China market through eCommerce
PLAN
E-Business
Strategy
BUILD
Online Branding, User
Experience & Technology
GROW
Performance Marketing,
CRM & Conversion
Optimization
35. THANK YOU
for your time & attention
For more information, please contact:
Charles Chan
charles@cleargo.com
+852 9470 6088
http://www.cleargo.com
Hinweis der Redaktion
Thank you RogerI hope by now you are convinced that you should sell online in China, in my presentation in the next 30 minutes, I will talk about China market entry through eCommerce, and I would focus on some of the key steps and issues that you need to be aware of when you plan to sell online in China.
When you plan for your brand and products to enter the China market, what you will find is that rent or distribution cost is soaring, and even so this may only give you a limited presence to certain cities and regions. In comparison, selling online immediately gives you a national presence, which can be a good alternative option for your China entry, or at the very least, a complimentary option to your offline presence.
There are many reasons why Chinese consumers are shifting to online, pricing and convenience are the two most important factors.At the same time, pollution & traffic jam also help pushing people to buy online.
Olay sells in almost all platforms but it lacks consistency in promotions and pricing
A brief introduction about myself and the company.I’m Charles Chan, the founder and managing director of CLEARgo. We are an eCommerce agency in Hong Kong and China. Broadly speaking, we help our clients to plan, build and grow their eCommerce business.We are a Magento Solution Partner, so we focus very much on the Magento Solutions.Our clients include brands such as Proactiv, Jebsen, Sino United Press, and pure eCommerce business such as Cartridges Direct.