Succeed in China Pet Market

Contents

1. China Market Overview

2. Alibaba & Tmall Global Introduction

3. Pet Category on Tmall Global

4. China Pet Food Import Regulation

China Market Overview

Source: 1 Chinadaily, & 3 eMarketer 2016, 2 PWC, 4 Oliver Wyman 2016

The China Opportunity Today

2017- China is the the world’s largest retail

market at

US $ 5.69 trillion

Retail MarketSize

Online penetration of China’s overall retail market

will reach

25% by 2020

Retail Market Online Penetration

The proportion of online consumers in China who buy

foreign/ imported goods

40% of online consumers

Taste forImported Goods

Source: China Internet Network Information Center - 39th “China Internet Development Statistics Report”

The China Opportunity Tomorrow

400 MillionMiddle-class Consumers.

The middle class population is set to reach 400M by 2020. Which is the economic

equivalent of adding an economy the size of Germany.

Europe (739 M) US (326 M) ANZ (25M)

731 MillionInternet Users in China

Compared to

Alibaba & Tmall Global

Introduction

Alibaba: Making it Easy to do Business Anywhere

2 BILLIONCONSUMERS

TENS OF MILLIONSOF MERCHANTS

GLOBAL

BUY

GLOBAL

SELL

GLOBAL

PAY

GLOBAL

TRAVEL

GLOBAL

DELIVER

Alibaba China Retail Marketplaces Milestones

Taobao (C2C)

Taobao Mall

1st Double 11

2003

2008

Nov 2009

Tmall (B2C)

Nov 2011

Feb 2014

Tmall Global(Cross border B2C)

Tmall Global Direct Import

May 2016

Nov 2018

10th Double 11

666m Mobile Monthly Active Users

60%+ Consumers are Under 30

Years Old

90%+ of Total Transaction on

Mobile

20m+ Comments and Sharing on the Mobile Everyday

*China retail marketplace mobile MAU for the month As of Sep, 2018

We are no longer just a platform..Tmall is now an ecosystem

Let’s me show you how…

Tmall ecosystem powered by Alibaba

E-DISTRIBUTION

E-SUPPLY CHAIN

MANAGEMENT

E-MARKETING

OMNI

CHANNEL

NO.1 B2C PLATFORM IN CHINA

666MMMobile Monthly User

60.9%B2C Market Share

45%Physical Goods GMV

Growth

TMALL OVERVIEW

Ph

oto

: A

liba

ba

Gro

up

75Countries

and Regions

3,900+Categories

19,000+International

Brands

TMALL GLOBAL OVERVIEW

Ph

oto

: A

liba

ba

Gro

up

2018 11.11 Global Shopping Festival

1 billion plus Delivery Orders Processed by Cainiao Network

~ 180,000 Participating Brands and Merchants

US$30.8 Billion Total GMV

27% YoY Growth

Top 5 Countries for Import

No. 1

Japan

No. 2

USA

No. 4

Australia

No. 5

GermanyNo. 3

S. Korea

Source: Tmall Global & CBNData. Popular products refer to products often bought by one consumer group but not others. Cosmetics & Food items are popular among all groups.

>50% are Young

millennials (<30 y.o.)

Want new experiences and style

Less price-sensitive than other groups

Popular products

Sports shoes Alcohol (wine)

46% customers are

New Middle Class

Popular products

Want the best for their family

Prioritize safety and quality

Infant formula Baby food Model kits

Generation Z (<23 y.o.)

Prioritize style

Follow celebrity & influencer

(KOL) endorsements

Popular products

Celebrity-

branded items

Consumer Profile on Tmall Global

➢ Tmall Direct Import (TDI), Tmall Overseas Fulfillment and Tmall Global - Help brands enter the Chinese market

➢ TMALL = Help brands already in China.

➢ Lazada and PayTM - Help brands expand to SEA and India

Products & Brand

already in China

Chinese

consumers

In Mainland China (subsidiary or distributor)

In Mainland China

In CNY

In Mainland China

In Mainland China

From within Mainland China

Products & Brand

from overseasChinese

consumers

Outside of China

In home country

In home currency

In home country

Outside of China

From overseas

Legal entity

Bank account

Payment

Trademark registered

Warehouse

Shipping to Chinese consumers

Products &

Brand

already in

China

SEA

consumersIn Mainland China (subsidiary or distributor)

In Mainland China

In CNY

In Mainland China

In Mainland China

From within Mainland China

India

consumers

Various Platform Solutions to Suit Brands’ Needs

Tmall OVERSEAS

FULLFILMENT

Supplier model

Sold through TMALL Global TDI store

Fees (Deposit)

Import Lifestyle Supermarket

• Platform to Sell High Volume Products

• Channel to introduce mature products

• Dedicated effort for new products on Flagship Store

Tmall Global – Educate/ Sell/ Engage

Flagship Store:

Build Branding and Marketing Billboard

Direct Collaboration with a powerful distribution Channel:

Supply Chain Depth / Risk Control

TMALL Global EcosystemAn Overseas Brand’s Ultimate Destination to

Invest in Brand Building / Product Introduction & Sales

FLAGSHIP MODEL TMALL DIRECT IMPORT

B2BB2C

Self managed Tmall Global flagship store

Partner with TP to run store operations

Fees (Deposit, Annual, Commission, Service)

Discover New Lifestyle

Introduce Brands, Product Variety •

A channel to educate, Customer Lock in •

One stop hub to introduce a Lifestyle •

Pet Category on Tmall Global

46.1

30.7

27.3

19.4

17.3

狗

猫

水族

爬行类

啮齿类

China pet owners in 2018

（%）RMB

170.8bnMarket

volume

RMB

105.6bn

RMB

65.2bn

Comparison of annual pet

consumption per capita

RM

B 4

,35

1

RM

B 5

,01

6

2017 2018

51m（2%）

41m （8%）

1.8 cats per capita

1.5 dogs per capita

Volume: Sales volume for pets: RMB178bn, an annual increase of 25%.

Products for dogs contributed 60% of total sales while cats produces

contributed 40%

Pet owner: 74m, an annual increase of 24% (mainly pet and dog owners).

Aquatic pet owners are increasing in number

Consumption per capita: An annual increase of 15% (from RMB4,351 to

RMB5,016)

More pets per household: Families are adopting an increasing number of pets

25%+

90m pets

74m city-based pet owners

(24%+)

China Pet Market Size and Trend

Pet is the Fastest Growing Category on TMG

188%+ sales growth

100+ brands

1000%+sales growth

50+brands

30%+market growth rate

14.5 billion pet market

2016 2017 2018

• Pet: cross-border positive list.

• Hangzhou port: the 1st pilot port and TMG: the 1st pilot platform.

• Natural Balance joined TMG.

• The first pilot order was successfully received (vegetable and fish)

• The first poultry pilot order was successfully launched

• Fastest growing category on TMG.

• Strategic Partner: Mars, Nestle, RPF

Rapid growth of

Daigoumarket

2019 YTD

• Pet category is still the fastest category in TMG

• Pet healthcare is the category with great potential

• August 2019: TMG booth at Pet Fair Asia for the first time

100% sales growth

200+brands

International Pet Brands on Tmall Global

Tmall Global Pet Category Promotion and Marketing

Weitao and Must Buy List Traceability Digital marketing Weibo topics & livestreaming Online & Offline themed campaign

Pet Fair Campaign

• PFA 2018 total sales increased by 700% and exceeded 11.11 sales of 2017• The 618 campaign was a good preparation for the outbreak of the PFA campaign

Mid-year promotions

Tmall Global Show Case – Natural Balance

2016

TMG Store

Opening

1. Assortment optimization

2. Close collaboration with TMG

operations teams2017

Sales increase

400%+

Attract new customers and share

brand’s USPs

1. Optimization of operations and in-

depth understanding of consumers’

needs

2. Enrich assortment (hero and second-

tier products)

3. Optimize customer experience via

strong after-sales service

4. Tmall Discovery campaign breakout

2018

Sales increase

50%+

Multi-channel marketing investment to

attract new customers

1. Content marketing

2. Consumer loyalty

3. Gradually introduce new products for

dogs

4. Breakout in the Tmall Super Category

Day

2019

TMG Top 3

brand

Identify category trend and increase brand

awareness

1. Increase operations effectiveness, refine

SKUs core selling-points and consumers mind-

set

2. KOL, Little Red Book and live-streaming

content

3. Focus on the competitive advantages to gain

market share

4. Increase brand awareness with booth at PFA

Tmall Global Show Case – Litter Robot

New Term Definition: Empty-Nest Pets

Weibo Hot Topics

• 17 million views• Over 1 million sales in the 1st hour of Double 11• Create new consumption trend for young pet owners• Raise the awareness of pet care

Pet Category Strategy

Health supplements: U.S andEuropean well-known brands

Wet Food：Attract new customers and speed-up conversion

Aquatics：Fish food and aquarium instruments

Smart Accessories: Tech-driven products, unique selling points, content marketing & PR

Dry Food✓Mid-High End：Continuously bring

in mid-high end dry food brands✓Great Value Brands: New

consumer acquisition, traffic driver

Pet Food Import Regulation

MOA (Minister of Agriculture) Registration

Manufacturers: Positive List

Epidemic Areas: Negative List

Sanitary Certificate from your

country to China

Pet Food Import Regulation

Manufacturers: Positive List

Epidemic Areas: Negative List

Import via General TradeImport via Bonded

Warehouses

Hangzhou : 1st free trade zone for Pet

food import via bonded warehouse

Shanghai: potential free

trade zone

Chongqing: 3rd free trade zone

Tianjin: 2nd free trade zone

Tmall at the Forefront of Policy Innovation

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