China Market Entry through eCommerce
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Transcript of China Market Entry through eCommerce
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China market entry through eCommerceCharles Chan, Managing Director of CLEARgoThe China Digital & Social Media Submit, Sydney - October 2013
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By now you have heard the headline
$539 BillionOnline Expenditure
in China by 2015from $212 Billion in
2013
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Key Challenges in China market entry
Soaring Rent & Distribution Channel Cost
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Variety of products, Convenience, Lower Prices are the key factors for Chinese consumers to buy online. Pollution & traffic jam also keeps shoppers from going out.
* Apple Store at Sanlitun (https://twitter.com/shannonfagan/status/290014772420829185)
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Since the melamine milk scandal in 2008, various product safety reports have destroyed consumers’ confidence in domestic products and drive online cross border purchase.
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Determine if your Brand is Suitable to Sell Online in China
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Determine if your Brand is Suitable to Sell Online in China
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You know why & what,
But HOW?
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Key Ingredients to Successful China Entry through eCommerce
Develop a China Consumer Strategy1
2
3
4
Decide on the Right e-Channels
Setup a suitable Operations & Organizational Model
Build Traffic, Optimize Conversions, Acquire & Grow Customers
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Demographic of Chinese consumers is diverseCompetition is fierce in most categories
What’s your Brand’s STP in China?(Segmentation, Targeting & Positioning)
1
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2. Deciding on the Right e-Channel
Different eCommerce Channel Models in China
brand.com mall-operate branded store
authorized online distributionbrand-operate marketplace store
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2. Deciding on the Right e-Channel
In China, eCommerce has been marketplace driven
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2. Deciding on the Right e-Channel
Tmall and the rest
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2. Deciding on the Right e-Channel
Horizontal and Vertical eCommerce Platforms
Horizontal Platforms
Luxury
Private Selling
Cosmetics Consumer Electronics
Media
Grocery
Fashion
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2. Deciding on the Right e-Channel
UGG sells in both brand website and Tmall
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2. Deciding on the Right e-Channel
Coach closed its online flagship store in Tmall only one monthafter it opened, and shifted to sell in its brand site instead
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2. Deciding on the Right e-Channel
Olay sells in almost all platforms
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Brand Site
2. Deciding on the Right e-Channel
The luxury divide on brand site and marketplaces
Official eCommerce presence No Official eCommerce presence
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2. Deciding on the Right e-Channel
So which channel is right for you?
Brand.com
Brand Operate
Store @ MallMall OperateStore @ Mall
DistributionOnly
Brand Image
Control
Demand Capturing
CRM/Loyalty Integration
Data Ownership
Setup & Operating Cost
Operations Complexity
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2. Deciding on the Right e-Channel
Wait! Do you have a Chinese entity already?Have you registered and trademarked your brand already?
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2. Deciding on the Right e-Channel
Tmall now allows foreign brands to setup without local entitiesand sell to Chinese consumers as cross border transactions
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3. Setup a suitable Operations & Organizational Model
Create an eCommerce user experience for China – Information to help customers making decisions
* a typical product detail page in China
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3. Setup a suitable Operations & Organizational Model
Payment methods in ChinaAlipay, China UnionPay, Direct Debit, etcMost people don’t have credit card and are unable to pay non-RMB transactions
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3. Setup a suitable Operations & Organizational Model
“Fapiao” – not just an official invoiceThis is how local Government keeps track of your Value Added Tax (VAT)
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3. Setup a suitable Operations & Organizational Model
Customer Service – Live ChatHotline & Live Chat for both Pre-Sales & Post-Sales is a must in China
AliWangWang is the standardLive Chat platform for Tmall & Taobao
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3. Setup a suitable Operations & Organizational Model
Warehousing, Fulfillment & Delivery A range of domestic and international providersService quality from domestic providers still varies but improving
Amazon Fulfillment Service
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3. Setup a suitable Operations & Organizational Model
In-house vs. OutsourceOutsource some or all aspects of the puzzle
Order & FulfillmentManagement
Merchandising& Inventory Mgmt
CustomerCare
Store Management Marketing & CRM
eCommerceTechnology
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4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
Grow your eCommerce business under the Chinese ecosystem
Acquisition Conversion Retention Amplification
Measurement & Optimization
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4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
Grow your eCommerce business under the Chinese ecosystem
Brand.com
Directory
Search(SEM/SEO)
DisplayAds
CSEProductSearch
AffiliateMarketing
E-DM
SocialMedia
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4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
Tmall & Taobao have its completely separate ecosystem
Tmall
聚划算GroupBuying 直通车
PPC Search
站内活动Event
淘金币Points
一淘CSE
微淘Social
Shopping
淘帮派Communi
ty
钻石展位PPC
Display
淘宝客CPS
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4. Build Traffic, Optimize Conversions, Acquire & Grow Customers
The Single’s Day 11.11 has become the Black Friday of ChinaBrands now get to prepare for this day months ahead
US$3 Billion Sold at Taobao & Tmall in 24 hourson 2012 Single’s
Day
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How Chinese sellers are preparing for 11.11
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Summary in China Market Entry through eCommerce
Develop a China Consumer Strategy1
2
3
4
Decide on the Right e-Channels
Setup a suitable Operations & Organizational Model
Build Traffic, Optimize Conversions, Acquire & Grow Customers
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About CLEARgo
CLEARgo is a Brand eCommerce Agency in HK & China
We help brands to grow in the China market through eCommerce
PLANE-Business Strategy
BUILDOnline Branding, User
Experience & Technology
GROWPerformance Marketing,
CRM & Conversion Optimization
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THANK YOUfor your time & attention
For more information, please contact:
Charles [email protected]
+852 9470 6088
http://www.cleargo.com