Cross-border E-commerce delivery and E-Fulfillment
DemandShip Korea, Inc.
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Logistics Startup founded by two pioneers in cross-border E-commerce
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Sangsin Park, CEO
11 years of experience in cross-border
Ecommerce in Korea, Japan and USA
Started ‘Dripcoffee Korea’ On-Demand
coffee delivery business in 2004
Led Gmarket Global Business (2006~2007)
Qoo10 Japan Director of Sales
Founded B2C online store, selling US
supplements to Japan in Los Angeles (Sold
to New Zealand company)
Joe Zhang, Director of China
18 years of experience in B2C cross-border
logistics operations in China and Europe
Started eBay selling in 1999
Sold his online Jewelry store to DX.com
Head of logistics in Europe and America in
DX.com
Founded eCargo.com (ASX:ECG)
Director of Cross-border in Lightinthebox.com
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Introduction
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DemandShip is a Cross Border Parcel delivery and fulfillment service.
Manufacture
E-Retailer
• Product Management
• Order Management
• E-Fulfillment
* FBA: is an abbreviation of Fulfillment By Amazon, a service where sellers of Amazon marketplace ship their stocks to Amazon warehouse,Amazon packs orders and delivers, and provides CS.
• International Parcel Delivery
• Logistics for Amazon FBA*
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Problem
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Shipping cost is an important concern for customers buying
from overseas sellers.
Local couriers with cheap and fast service cannot be
connected from overseas small and medium-sized companies.
The Postal service is the only way to ship internationally for
small companies but it is very slow and doesn’t provide a
localized service such as customs clearance and returns.
Many small-sized seller accounts on Amazon are suspended
because of the late shipment.
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Solution
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Lowest Shipping Rates from local couriers in destination countries
Addresses in local language which are more familiar for Asian customers
Door to door service with tracking like FedEx and UPS
Same day order fulfillment and 2~3 day delivery like Amazon
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Cross-border eCommerce market in Korea is steadily growing
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Korea Market Size of Overseas Online Selling (US$ millions)
500
1000
1500
2000
2013 2014 2015 2016
0
300
500
1200
2000
Source: Statistics Korea, Korea Customs Service
Major Competitors and Market Overview
In the case of online selling to overseas, Korea
post has the largest share(approx. 80%) and
followed by global express carriers such as DHL,
FedEx.
EMS
US$ 300M
Small Packet
US$ 40M
Source: Annual report of Korea Post
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Amazon FBA Logistics
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Selling through Amazon FBA services
ManufacturerShipping
by airAmazon
WarehousesSelling
in Amazon
Domesticdelivery
Receiptby end-customer
Countries: UK, Germany, France, Spain, Italy, USA
Revenue:US$50K / Week (June)
Margin: 30-35%
Service Areas:Export Clearance, VAT Return, Import Clearance, Last Mile Delivery
Key Highlights
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E-Fulfillment
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Cross Border B2C fulfillment
Vendors inDongdaemun
Shippingby air
DemandShipKR Warehouse
Sold onWebsite
Domesticdelivery
JapaneseConsumers
Launched on June 23
Expected Revenue:US$150K / Month
Margin: 40% for pick & pack, 13% for International Parcel Delivery
Service Areas:Inspection, Labeling, Packing, Storage, and Customs Clearance
Key Highlights
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Pricing Comparison (DemandShip Direct VS Post)
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USPSPriority Mail
6-10 days
$53.65
DemandShip
4-6 days
$13.82
$2.00
$0.50
$4.00
Warehousing
$2.50 Air freight
Customs clearance
Local courier
$4.82 Margin
For a 1kg parcel from USA to MalaysiaUSPS
Priority Mail
Express
3-5 days
$71.15
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How it Works
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Demo
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DemandShip built up the various overseas networks and expands business under the franchise model.
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DemandShip Franchisee
Dispatch Center Clearance Port
LIVE PLAN
ROUTE MAP
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Sales and Marketing
Online merchants in Korea and Japan
• Partnership with the payment solution provider, UK TAX agency for Amazon
global selling
• Advertisement on online seller communities
• Business Blog
• Partnership with 11street Thailand, Malaysia and Shoppe Singapore
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Targeting sales of KRW 32.5B in 2018 through Amazon FBA Logistics, and focus on B2C direct services
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2016-2018 Financial Projections
• Expansion of shipping service ex-USA
to SEA which currently is a beta
service.
• Due to the obligation of VAT
registration when selling on Amazon
Europe, demands on legal clearance
and logistics service has increased.
• Transportation cost, which occupies
the most portion in sales cost,
continuously drops in accordance with
the volume growth.
• Expansion in automation through
continuous IT investment.
Estimation Basis of Revenue and Profit & Loss
(Unit : KRW m)
2016 2017 2018
Revenue 256 4,805 32,594
B2C Express 256 3,325 16,873
FBA Logistics - 1,396 15,397
e-Fulfillment - 84 325
Cost of sales 255 99% 4,205 88% 27,375 84%
Transportation 255 4,173 26,913
Warehouse Worker Salary - 32 463
Gross profit 1 601 12% 5,219 16%
SG&A 277 559 1,992
Number of Employee 6 8 28
Salaries 131 187 1,180
Rent 23 174 487
Depreciation 33 75 133
Travel expenses 33 50 75
Employee Benefits 9 14 42
Other costs 48 60 75
Operating Revenue -276 -108% 41 1% 3,227 10%
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Team
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Sangsin Park, CEO10 years of experience in cross border
Ecommerce
Samsung C&T, Gmarket, Qoo10.jp
Peter Acs, Web Developer3 years of experience in Ecommerce
Mijin Yang, Product Manager10 years of experience in web services
Valerie Choi, Global Operations5 years of experience in global logistics operations
Hyeongryun Kim, Logistics Manager5 years of experience in airfreight forwarding
Robin Jongmans, Lead
Developer5 years of experience in web services for
logistics & warehouse management
Joe Zhang, Director of ChinaExpert in B2C cross border logistics
operations
DX.com, eCargo.com
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Appendix
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DemandShip system is web-based which Client, Forwarder*, (Warehouse) and Operator can use. We developed it as an expandable structure for global services.
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Client Dashboard Air Freight Management Screen
Dispatch Center Management Screen Tracking Page
* Forwarder: Freight forwarder, a person who arranges from taking cargo until handing over to an airline.
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DemandShip has competence which calculates estimate Duty & Tax per country, collects the calculated amount from a shipper, and pays customs in a destination country.
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Defines Tax rates per country and Threshold
Reflects Tax amount in system which is actually charged by customs
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The first company to provide OPEN API* among international carriers in Korea, which leads to the easy integration of delivery service for online shopping malls and related software companies.
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* OPEN API: allows Internet users to directly develop applications and services, and is being tried in a map service and other various services.
Major clients of DemandShip API: Forbiz Korea Global Selling Tool(Software), Wisa(eCommerce), etc.
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Last mile Partners
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Appendix – Sample Labels of DemandShip
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