NSEC Symposium (Presentation IV 05 E Commerce)

8/6/2019 NSEC Symposium (Presentation IV 05 E Commerce)

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Exploring an Effective Deploymentof e-Commerce to Promote

Increasing Trade Opportunities

David Chow

Tekhill Holding Limited

May 19, 2011

What We Learned FromAround the World

The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views orpolicies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB doesnot guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their

use. Terminology used may not necessarily be consistent with ADB official terms.


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e-Commerce in ChinaTruly Fast Growing

e-CommerceIncreased Retail Sales Share


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China: Fragmented MarketGrows Online Shopping

In Comparison: % Adults in EUMaking Online Purchases


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Amazon.coms RevenueAcceleration + Share Gains are

Powerful

TaoBaoAn Impressive Run

190MM activeusersasofCQ1,up80%Y/Yvs.114MMforAmazon.comand90MMforeBay

$58BGrossMerchandiseVolumein2010,up2xY/Y,accountingfor2.6%ofChinaretail

sales

50% oftotalpackagedeliveriesforallbusinessprocurementinChina


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Newegg Formula Maybe Utilized

Acquire Convert Fulfill Retain

Key

Competency Daily Deals

Shell Shockers

Social media

Email

Vendorrelationships

Shoppingexperience

Product selection

UGC

Advancedanalytics foroptimum product,

price, placementExclusive products

Fast shipping

Inventorybalancing

Advancedtechnology tooptimizeinventory

Customersatisfactionculture

Email / LiveChat

Community /Eggxpert

Customers come, buy, stay and tell their friends

Newegg in North America & China

New Jersey Warehouse 10 &

14: Cranbury

Memphis, Tennessee Warehouse 6, 12

TaipeiChina

Global ProductManagementCenter

XianChina Global Support Center OZZO Logistics Center

Southern California Warehouse 1Support Center(Phone, Chat & Email), Whittier

Warehouse 2,7&8: City of Industry US HQ: City of Industry Guangzhou/Beijing/Nanjing/Jinang

OZZO Logistics Center

, Canada Newegg Canada

ChengduChina Global Support Center OZZO Logistics Center

ShanghaiChina Global Research Center

Newegg China OZZO Logistics Center


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Newegg: a Decade of Growth

Note: Net sales shown above include freight revenue and other revenue ($ in millions)

2nd largest online e-commerce platform

Vendor Relationship Critical

Vendor benefitsVendor benefits

Product promotions partner

Access early adopter customers benefit frominfluencer effect

Access customer data

Selection and partnershipsSelection and partnerships

Large SKU selection sourced directly from

vendors Diversified partnerships

Opportunities for continued vendor leverage

Newegg benefitsNewegg benefits

Vendor incentives

Favorable product allocations

Competitive pricing

Vendor relations (select categories)Vendor relations (select categories)

IT products Q410 SKUs 2010 net sales

Hard drives

1,693 SKUs

$302mm

Mobile hardware

3,523 SKUs

$293mm

Memory

3,239 SKUs

$186mm

CPUs171 SKUs

$135mm

CE products

Home video

1,299 SKUs

$68mm

Digital cameras

1,649 SKUs

$65mm

Video game

consoles4,287 SKUs

$36mm

Home audio

1,358 SKUs

$39mm


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Unique Visitors Growth

50%

75%

100%

125%

150%

Sep-

09

Oct-

09

Nov-

09

Dec-

09

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-

10

Aug-

10

Sep-

10

Source: comScore

Unique visitors (Indexed to November 2009)

YoY growth

Unique visitor growth in line with / at top end of peer group

Highest LTM unique visitor growth amongst peers

14.7%5.2

10.0%49.0

0.2%1.9

10.2%4.4

16.7%28.8

4.4%113.6

7.9%5.3

Nov-10 traffic

(mm)

(2.4%)6.7

Best-in-ClassIT Platform

Website order process performance benchmarksNov Dec 2010

SiteTime(sec)

Newegg 8.87 Office Depot 9.81 Overstock 10.37 QVC 13.91 CDW 14.20 Sears 14.42 LL Bean 15.22 Walmart 15.94

Williams-Sonoma

16.58

Office Max 16.81 Amazon 18.26 J.C. Penny 18.36

BenchmarkAverage

18.79

HP 20.53 Target 22.47 Dell 25.70 HSN 29.15

VictoriasSecret

30.76

Staples 36.80

Site Rate (%)

QVC 99.6 CDW 99.5 Newegg 99.4 HSN 99.3 Overstock 99.3 Office Depot 99.1 LL Bean 99.0 Walmart 99.0 Target 99.9 Amazon 99.8 Dell 99.4

Williams-Sonoma

98.3

BenchmarkAverage

98.3

HP 97.9 Office Max 97.7

VictoriasSecret

97.1

Sears 96.9 Staples 96.6 J.C. Penny 94.0

Response Time Rating Success Rate Rating


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Yunnan International

e-Commerce Company

AjointventurecompanyofYunnanProvinceandNeweggsistercompany

OfficialOperationalCenterfor

AsianChinaFreeTradeAreaBusiness

Portal

AsianChinaFreeTradeAreaB2BPlatform

Exploring e-CommerceDeployment


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ADB:

Why e-Commerce Important*

Internetisdramaticallychangingthewaygoodsandservicesareproduced,delivered,soldand

purchased

InternettechnologieshavethepotentialtoempowerSME

Potentialbenefitsofecommercefordevelopingworldareimmense anycompanycanenter

globalmarketswheresizeandlocationbecome

ratherirrelevant

* Asavin Chintakananda, Senior Advisor, Asian Development Bank, Page 6 of Financing E-Commerce While Fighting Poverty Presentation

ADB:Fostering e-Commerce*

Rightconditionsmustexistfor

ecommercetogrowandthrive

Strongpolicyframework

Skilledworkforce

Infrastructureandaccess

Awarenessandtrust

* Asavin Chintakananda, Senior Advisor, Asian Development Bank, Page 9 of Financing E-Commerce While Fighting Poverty Presentation


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Phase 1: B2B Trial in GMS

GMSmayconsidertomakereferenceandutilizeASEANChinaFTAB2BPlatform

TargetinglowerentrycostsandbarriersforASEANenterprises

Accessexcitingyetfragmentedmarkets

B2BforASEANMemberCountriesandChinatopromoteinterregionaltrade

MoresupportcomingtargetingCrossBorderonlinesettlementandePort

CurrentlyrunningatrialwithMalaysia lessonlearned:governmentsupportisverycriticalto

success

Rationale for Trial Accelerateadoptionofecommercetrade

Continuousbuildingofinfrastructure,legalframeworkandincreaseawarenessinetrade

oncostsandbenefits

TargetingtradeopportunitiesbetweenASEANMemberCountriesandChinaasapriorityin

theearlytrial worthconsideration

DomesticB2CandC2Cmarketswhenready

Effectiveutilizationoftransportationinfrastructureupgradedinrecentyears


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Phase 2: B2B2C Through

Established Partners

UtilizeandmakeuseofanestablishedelectronicshoppingmallatNeweggandotherestablished

channelsintheU.S.

Leapfrogbypassinggroundzero

Shortenlearningcurve

Accessvastmiddleclassconsumersegment

AcceleratetradingwithChinathroughNewegg

platforminChina

CurrentlyrunningatrialwithMalaysia

Phase 3: Domestic B2C/C2C

ConsidertoutilizeNeweggandotheravailablePubliceCommercePlatforms

Considernottoreinventcertainbasics

Reducelearningcurve

Lowerstartupandentrycosts

Tailormadetospecificneeds

GovernmentsupportfromeachcountryverycriticalRelevantADBinvolvementandcoordinationvery

important

Comprehensiveplanningbutsmallwinsthroughtrialsutilizinganestablishedchannelisrecommended


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Conclusion: Obstacles Seen

but Huge Potential

Potentialkeytosuccess

Adequateecommerceinfrastructureinplace

Policyandregulatoryframework

Commonplatform:wheelsnotmadehere

B2BbeforeB2Cincertaincountries

Internationalandlocalcollaborators

ADBstrongleadershipinsustainableGMS

ecommerceframeworkdevelopment

ThankYou

Forfurtherinfoandinquiry:

[email protected]

(86)13601603392

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NSEC Symposium (Presentation IV 05 E Commerce)