Embed Size (px)
Citation preview
Everything you need to know about China in 30 minutes
Chris Vincent, CEO - Asia PacificArthur Cheung, Country Manager – Greater China
Practicology Conference 2016
Who are your customers in China
China Ecommerce Ecosystem
3
Consumers
t.qq.com
Social
MainBuying Channels
Search Engine
NewBuying Channel
China’s demographics
► There are 4 Tier 1 Cities in China: Beijing, Shanghai, Shenzhen & Guangzhou
► There are approximately 60 Tier 2 Cities
► There are 200 Tier 3 Cities
► And over 350 Tier 4 Cities
► There are over 160 Cities with a population greater than 1 Million people!
Lower Tier Markets are picking up the growth
► Tier 4 and Rural cities Taobao
Tier 4 and Rural cities Taobao
How to enter China – Ecommerce Channel, Marketing and General Practices
Source: China’s Connected Consumers When 10,000 Chinese shop... Insights from a 2015 survey, KPMG CN
Peak Shopping Day in a Week & Hour in a Day
Mon Tue Wed Thu Fri Sat Sun
Types of B2C Plaforms
Trade partners
► The traditional entry point into China digital for western brands is Tmall
► Sales on Tmall can be tremendous as you are reaching such a large population
► Tmall is not the only marketplace in China…
Marketplaces – Market Share
► These trade channels are like an outsourced ecommerce department
► They could do everything from sales to customer service to logistics
Trade Partners OverviewsTrade Partners Roles & Service
Trade Partners
The challenge with TPs
► There are literally hundreds of TPs in the market now► Hard to find good talent► Turnover rate is huge► Most are run like a factory
► Visibility on TP effort is hard to track
► TPs are getting too large now – some have even floated on western stock markets
► Brands don’t have a direct connection with their customers
Take Back Control
What we think…
► Initially you want to manage the trade function directly
► Get to know your customers
► Outsource the support functions► Supply Chain► Customer Service► Design
► Later you want to take back total control
The challenge with marketplaces
► Very Difficult to differentiate
► Discount driven
► Fakes and Grey market imports are a real issue
► Doesn’t really allow o2o or multichannel engagement
► Ultimately you want to have direct access to consumers
The rise of WeChat
To understand WeChat you have to understand the foundation:
► It is a mobile first market
► Censorship is rampant
► Microblogging or Weibo was/is massive in China
► D2C sites have struggled to get cut through and break the marketplace monopoly.
People often say WeChat is like Whatsapp...
WeChat is a lifestyle app
• WeChat has 1.1 Billion registered accounts and 700 million active users, 70 million outside China as of May 2016
• 200 million of them have credit cards attached to their bank/ credit card accounts
• 83% users purchase product online
• 55.2% users open it more than 10 times a day
• User spend on Wechat’s daily is over 40 minutes
• WeChat contributes to $1.76 Billion in lifestyle spending in China
WeChat Consumer Engagement to Purchase
NewBuying Channel
Other market places
WeChat Consumer Engagement to Purchase
23
To the Brand site
Shopping products
QR Code in Menu
Follow and blinding
Msg to customers
Promotion banner with links to html
pages
Menu to the product page
Multi-Level Marketing
► As WeChat Commerce has gained share in digital shopping. Integrated apps / platform are developed to deliver social viral and marketing opportunities to direct sales to Wechat shops
► Multi-Layer Marketing in China has become a hot trend in China growing since 2014. Numerous Social Distribution / Multi-Layer Marketing Platform had been founded.
Real Life Example
According to Law in China, if that is not exceeding 3 level, this is still legal.
Lab SeriesWeChat Store
Multi-Level Marketing Via Wechat
► Using MLM (multi-level marketing) Wechat store owners can acquire fans/customers by viral marketing or a QR code in Wechat, friend circle or messenger.
► If they then remarket this onto their contacts they can gain some commission from each subsequent shopper.
This is a MLM wechat platform , the right hand side screen cap shows the profit an individual gained from his down-line fans
O2O Wechat CRM Case – Sasa Perfumery
Binding personal via sending QR code to the brand official account
By auto-reply function, they can get staff coupon
/ connect to customer s’ accounts
Generate coupons for customerReply enquiries when their own
customers ask something in the brands official wechat
View the record of coupon usage and comission status
Cross-border Ecommerce
Cross-border ecommerce
Drivers of cross-border ecommerce in China
Why is cross border so big?
► The amount of fakes in China is rampant
► Run from Hong Kong – has a much more western approach to laws and governance
► Tmall Global only allows one global flagship per brand
► Items are viewed as “real” by Chinese consumers because they are from somewhere else!
General Practices Flow Chart – Cross-border
Bonded Warehouse Model Direct Delivery Model
Bulk merchandize from overseas
and ship to China
Stock in bonded warehouse
Customer place the order
Pick & Pack
Bonded Custom Check
Domestic Delivery
Customer place the order
Merchandize from overseas
Pick & Pack
International shipping
Package entre custom warehouse
Logistic Custom Check
Domestic Delivery
The China caveat
One caveat to dealing with China is that rules can change regularly so ensure you are kept up to date on changes or potential changes.
Cross-Border Tax (Jun 2016 Effective)
Thanks for listening
If you want to discuss China or the wider Asia pacific region please email us at:
