Going Global: Tales of International eCommerce

China eCommerce Opportunity

9th May 2013

by

Ken Ardali, Grand eBazaarJohn Muir, eCargo

IntroductionsJohnChina-based16 years within International

eCommerce Microsoft, Compaq, MRM Worldwide, Lbi

8 years in fashion retail Ted Baker, Reiss, Gant, Bench, French

Connection International logistics and warehousing

- core focus on ChinaEnabling regional and global brands to

access China’s e-commerce boom and develop International trading

Full end to end outsource offering

KenConsumer Goods manufacturing

companies channelling B2B2C internationally

Unilever, Mars, Kodak, Remington, ElectroluxEx-eBay

Cross Border Trade = £6 billionEx-Alibaba (worked in China)

Through Tmall and Taobao B2C & C2C in China = £100 billion

Opportunity to improve international fulfilment for ecommerce

Grand eBazaar is working with UK brands to enter China

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AllPort Cargo Services Group

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Founded in 1962 Leading integrated global logistics solutions

provider based in Hong Kong and China. Over 7,500 staff and workers in China, the

U.K., Australia, South Africa, Singapore and South-East Asia.

Global network of agents covering 80 countries.

Storage facilities of over 4 million square feet and fleet of more than 1,000 trucks.

In December 2010, acquired Allport Limited, the biggest independent logistics operator and international freight-forwarder in the U.K.

HSBC Principal Investments is a strategic investor of the company.

Annual turnover is over US$1 billion.

Some of our Customers

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Why China?

50,000Of these buildings could be skyscrapers - equal to 10 cities the size of New York

5 timesThe number by which GDP will have multiplied by 2025

40 billionsquare metres of floor space will be built – in five million buildings

170 Mass transit systems will be built

500 millionNetizens, the largest Internet population in the world

5 billionSquare metres of road will be paved

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More facts about ChinaChina retail sales £1.3 trillion & growing 15% per year

Luxury goods by 35% Growth is being fuelled by mid-tier cities

20 cities with populations more than 7 million China vs other countries

Average age 34 years Discretionary spending growing fast and a young and emerging middle-class

want to show off their success Quality, foreign brands are desirable and demand is growing

China online 242 million shoppers online – 6 x UK Spending £700 per year – on average 8 purchases per month Shoppers sophisticated – buying process interactive Social media plays a stronger role – 44% use it to make purchase decisions

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Local Chinese site preferred for foreign brands

In H2 2012:Nearly 12 million Chinese bought overseas goods onlineChinese shoppers purchasing goods overseas made an average of four purchases totalling £170.

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Major eCommerce websites in China

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3 Top eCommerce channels in China

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Tmall - B2C online retail since 2008, currently features more than 70,000 international and Chinese brands from more than 50,000 merchants and serves more than 400 million buyers.

Taobao - C2C online retail since 2003, under the same corporate of Tmall. On Nov 30th 2012, the sales amount of both Taobao and Tmall reached 1 trillion RMB.

360Buy – one of the largest B2C online retailers in China. With 35 million registered users, 360Buy processes 300 thousand orders daily. The website has a daily page view of over 80 million. Sales amount at 2011 was over 30 billion RMB.

Consider using Tmall as launch platformAlibaba’s flagship B2C portal

Now, 55% of China’s B2CEvery minute

52 mobile phones 2,950 pairs of women’s shoes 14,368 items of clothing 880 items of cosmetics

Once offline preparations are complete, an international brand can be on-boarded in less than a month

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Chinese consumers see Tmall as destination for:

Following the latest fashion trendsAccessing the widest variety of productsPurchasing high-quality, brand-name products

Asia’s Largest Shopping Platform

B2C Market Share in China

Registered Users

Daily Unique Visitors

GMV in 2012

#1

>56%

>500 million

>40,000,000

>200 billion RMB

KEY STATS

26%

37%

18%

9%

10%Tmall Demographic

18-2525-3131-3636-41>41

Tmall: China’s Premier Online Shopping Destination

Tmall Flagship stores by Brand owners

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1. Entry plan

Scope• Assessment of

client brand, assortment and operation for CN

• Analysis of demand in CN market for above Requirement

• 1 month consultation working with client & in CN

Output• Report,

presentation and recommendation to client leading to 2, 3 and 4

2. Logistics

Scope• Define order to

delivery journey for buyer

• Set-up logistics for operation

Requirement• Define stock

and replenishment policy

• Agree SLA’s and commercials with 3PL

OutputEnd to end logistics

cost profileContingencies,

including peak plan

3. eCommerce

Scope• Based on 1 and

2, launching on relevant transactional platforms

Requirement• Prepare client

for platform integration

• Build stores

Output• Functional,

brand and entry plan-compliant properties

4. Marketing

Scope• Positioning and

target segments• Launch

program• Ongoing

marketing platformRequirement

• Local client budget and resource allocation for CN market entry

Output• Marketing plan

for launch & to Year 3

• Commitment to launch

Chinese ecommerce recommendation

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Marketing your product/brand in China

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Shopping guideWeibo

Socialnetwork Video site

1. KOL's content links to store directly. 2. Bring fans and traffic to Tmall.

Through the win-win cooperation, KOL features your product and shares their experience, pictures and text on their shopping guide website.

1. Promotion on brand and product2. Place advertisements on social sites and share with fans to increase traffic.

1. Arrange some activities with social sites (online or offline) 2. Build long term interaction with active fans to strengthen the influence of brand.

1. Buying experience shares between consumers2. The topic brings new fans to weibo, while increasing both the store’s reputation and traffic.

1. Increase the interaction between consumers and store2. Spread the reputation of your brand3. Pay attention to the comments from weibo fans4. Lead them positively into your brand and service.5. Spread marketing news, promotion and activities6. Maintain existing customers while developing new customers7. Increase product popularity and traffic into sales channels

1. Promotion through embedded advertising2. Increase the brand within a short period.

As well as the sales channel, it will also apply to the brand site.

Thank you!

Ken ArdaliGrand eBazaarkenan@ardali.co.uk

+44 7952 487258

John MuireCargojohnmuir@ecargo.com

+44 7787 518 832

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