Bricks to Clicks

BRICKS TO CLICKST H E R E A N D B A C K

A G A I N

Magdalene Kang

How do you shop?

RISE OF E-COMMERCE

Average 3-4% growth

Exponential Growth

中国Number of Online ShoppersAverage Growth Rate = 83.5%

Strong e-Commerce growth

B2C sales in 2011 $961 billion, growth of nearly 20% from 2010

Reasons for the rise in online shopping

Convenience Cheap Comparison Cross-Border

BRICK & MORTAR

D E AT H O F T H E

© Justin Sullivan/Getty Images

Pure clickSource: Google Images

BlogshopsSource: Google Images

Why choose Pure Click?

•Low capital•Easy to launch•Easy to maintain•Global reach

Bricks to Clicks Spectrum

Source: Google Images

Growth of e-tailers

e-Commerce Channel

BRICKS

CLICKS

Brick and Click

Brick & Mortar retailers add e-commerce strategy


Adopting a Brick & Click Strategy

Global reach

New customers

Solidify brand

Response to competitors

Channel Conflict



BRICKS

CLICKS

Online to Offline

ONLINE TO OFFLINE

M O V I N G F R O M

COUNTER INTUITIVE?

DOES THIS MAKE SENSE?

BETRAYAL OF ECOMMERCE VALUES?

Groupon SingaporeSoure: techinasia.com, e27.sg

Groupon Physical Store

• Better customer service• Better merchant service• Test physical products• Face to face interaction• Branding

tracyeinny physical store

Source: sgentrepreneurs.com.

Best of BlogshopsSource: http://imcms2.mediacorp.sg/CMSFileserver/documents/006/pdf/20090829/2908SHL010.pdf.

KissjaneSource: sgentrepreneurs.com.

Blogshops going offline

• Dream to own a store• Try on clothes• Walk in customers• Space for loyal fanbase

Amazon to open retail store


Amazon retail store

• Experience the Kindle• Provide tech support• Sell Amazon publications• Getting taxed anyway• Showrooming

TAOBAO.COM 淘宝O N L I N E T O O F F L I N E

Taobao Mall 淘宝城－上海

Source: http://office.sh.soufun.com/photo/1210234142/907_89096020.htmhttp://newnews.ca/?action-viewnews-itemid-59852

Taobao Mall 淘宝城－北京Source: http://bbs.taobao.com/catalog/thread/508895-252286846.htm

e-Commerce Insider Report, June 2011

Taobao Furniture Mall

• 270 showrooms• Self-service style• Self-service terminals• No promoters• Payment options

• On the spot• Login to Taobao

• 10% of the cost of traditional showrooms

http://www.whatsonningbo.com/tech173.html

Taobao Furniture Mall

• Furniture showroom• Big ticket item• See and touch• Caters to online shoppers• Plans to open in major cities• No plans for other kinds of mall

Source: http://office.sh.soufun.com/

TAOBAO.COMT O T H E M A S S E S

NETIZENSNON NETIZENS

40% netizens

60% still offline

Source: en.wikipedia.org/wiki/Internet_in_China

Source: http://hi.baidu.com/360264986/item/3ab8d01554da30088fbde42f

Online Shoppers

Shop OnlineDon't Shop Online

78%

22%

Source: http://hi.baidu.com/360264986/item/3ab8d01554da30088fbde42f

Reasons for Not Purchasing Online

Not familiarDon't know howNo payment methodUnsafeOthers

TAOBAO PHYSICAL STORES

• Need to reach out to the masses• Address their concerns

• Purchase process• Payment process• Safety concerns

淘宝实体店

淘一站

• Off-the-shelf purchases• Order from a catalog• Seasonal promotions• Order anything on

taobao• Payment services

Source: http://baike.baidu.com/

How to become part of 淘一站

Franchisee Conditions:

1. Have an online taobao store2. At least 4 diamond rating3. At least 98% good reviews4. At least ¥50,000 in monthly revenue5. Proper legal documents6. Provide a minimum deposit

淘一站

• 2008 implementation

• 80 shops in 11 provinces and 40 cities

Source: http://www.0734.com

DEAD!

WHY?

• Customers were all young people• No return or frequent customers• Customers only came for the

novelty factor

REVIVAL OF 淘宝实体店

东山再起

YES! 淘－淘宝代购店

• Purchase on behalf of the consumer

• Anything on taobao• Make payments• Accept delivery• Make returns

Source: http://news.ifeng.com/gundong/detail_2011_08/20/8556332_0.shtml

TAOBAO AUTHORIZED DEALER

Takes over entire purchasing process


• January 16, 2010• First 150 stores in

Hangzhou• Plans to open 30,000

all over China• Expansion into Tier 2

and Tier 3 cities

Source: http://www.chinainternetwatch.com/548/taobao-expands-into-offlien-retail-business/



Franchisee Conditions:• Commitment of at least 1 year• Basic computer knowledge, typing, experience in

online purchasing preferred• Own a store front of at least 2sqm• ¥750 publicity materials• ¥1200 deposit as guarantee (held in escrow)• Miscellaneous marketing fees

Source: http://www.chinainternetwatch.com/548/taobao-expands-into-offlien-retail-business/


安银电脑（嘉善，浙江）

VIDEO



BRICKS

CLICKS

Online to Offline

WHY MOVE BACKWARDS?

• New walk in customers• Large number of people still offline

NEW MARKETS

WHY MOVE BACKWARDS?

• User experience• Try out products first• Human touch• Branding

SHOWROOMING

WHY MOVE BACKWARDS?

• After sales service• Customer feedback

SERVICE

WHY MOVE BACKWARDS?

• Building trust with the customer• Prove that it is a real business

靠谱

CONCLUSIONS

BRICKS

CLICKS

Online to Offline

Equilibrium Point

Technology

Bricks to Clicks