CHINA ONLINE PLATFORMS...

CHINA ONLINE

PLATFORMS OVERVIEW

6/2016 Madrid & Shanghai Bridget Sun

CHINA RETAIL ECOMMERCE OVERVIEW


Tmall is the biggest player in B2C online market, JD is following

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Tmall 57.5% JD 26.2%

VIP.com 3.6 Sunning.com 2.5%

China’s online retail B2C platforms market share in 2016

Tmall 57.5% JD 26.2% VIP.com 3.6 Sunning.com 2.5%

GOME 1.2% Dangdang 1% Amazon China 0.9% Yihaodian 0.9%

Jumei 0.3% Womai 0.1% SF best 0.1% Jiuxian 0.1%

Others 5.5%

Three main directions of China Retail eCommerce

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Stable growth in

total sales

Increasingly upgraded in

consumption trend

Diversified in

online shopping

Stable growth in total sales in the past 5 years It is estimated the transaction scale will reach 7.5 trillion in 2018

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2011-2018 China Retail

eCommerce Transaction Scale

Data source: China E-Business Research Center

• The eCommerce transaction scale of

2016 was 5 trillion. It is estimated that

the scale will reach 7.5 trillion in 2018.

• B2C mode is increasingly replacing the

C2C mode.

• Transactions on mobile devices is

increasingly replacing PC transactions.

• The market share of biggest players is

tending towards stability. Top 3 are:

Alibaba, JD, Suning.

B2C is increasingly replacing C2C business Attributes to the regulators’ support and customers’ trust

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2011-2018 Market share of B2C V.S. C2C

Data source: iResearch

• In 2015, for the first time, the transaction

share of B2C surpassed C2C mode.

The rapid expansion of B2C business may

attributes to:

• The support from regulators since the B

enterprises have been registered with

governmental departments, it is easier to

monitor and manage

• The trust from end consumers

(compared to individual sellers)

• The pursuit of high-quality products

China’s online shopping users, consumption per capita and transaction activity are increasing at a large scale

7 Data source: Ali Data

China online shopping user scale in 2011-2016

Online shopping consumption per capita in 2011-2018

Number of times Chinese online shoppers purchase in 2010-2015

Online shopping users scale (in 100million ppl)

%of overall internet users

Online shopping consumption per capita (RMB)

Online shopping consumption per capita growth rate

Transaction times in total (in 100 million)

Average transaction times per capita

User Scale: 0.46 billion

Consumption per capita:10,380 RMB

Purchas times per capita: 62 times

Online shopping categories for single users are increasingly diverse Purchase products depth is expanding especially high-end products


Number of breakdown of products categories in Nov.11th ,2009-2016’

Online shoppers purchased products categories growth rate

Daily necessity

Computer, digital communication products

Household appliance

Percentage of online shoppers purchase jewelries

and accessories products

Jewelries accessories

2015 2014 2013

In 2020, the cross-border e-commerce transaction is expected to be 12,000 billion RMB, 30% of overall scale of import and export


China’s cross border e-commerce transaction value, changes in total imports & exports

Cross-border e-commerce transaction scale (1000 billion)

Imports & exports products total value (1000billion)

The year-on-year growth rate of China’s cross-border e-commerce transaction scale was 28% in 2015. In 2015-2020 interval , the compound annual growth rate is 20.1%. Such a rapid growth comes from strong cross-border e-commerce retail growth, technology and credit rising and the improving policy support system.

After having the picture of China e-commerce + the brand and product positioning, it’s time to select the proper platform to enter

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CHINA SEARCH

ENGINES OVERVIEW


Different players are in Search Engines market Baidu is still the dominator with 77% market share

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2017China Search Engines Market Share

77,03%

8,02%

6,94%

4,65%

1,57% 1,12% 0,68%

Baidu

360

Shenma

Sogou

Google

Bing

Others

• Baidu’s market share dropped from 79.07%

(2016 Q4) to 77.03%. However it is still the

biggest Search Engine in China.

• 360 dropped from 8.07% to 8.02%.

• Shenma increased the market share from 6.09%

to 6.94%. Shenma is highly reply on the traffic

from mobile devices.

• Sogou increased from 3.12% to 4.65% due to

the strategic collaboration with Tencent (the

mother company of WeChat)

• Google decreased from 1.74% to 1.57%.

• Bing decreased from 1.26% 1.12%.

There are plenty of paid products of different search engines Each search engine has their own eco-system

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Among all Search Engines, Baidu has most products / services For brands to approach target audience with different methods

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Search traffic volume Every day search requests are over 6 billion times, among all the requests more than 600 million are related with brands’ or products’ names.

Baidu Tieba Daily average page view is 1 billion. More than 33 million post are posted every day. Users gather together for some same topics and interests.

Baidu Zhidao Since 2005, it has solved more than 230 million questions. Average PV from Desktop: 260 million. from mobile: 170 million It is a Q&A platform, people ask and answer questions through this page

Baidu Baike It has more than 6.5 million entries. It updates 150 thousand entries every day 4.3 million unique visitors per day. It is like wikipedia

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Baidu News More than 20 million people view Baidu news from both Desktop and mobile device every day

Baidu Music More than 35 million people everyday Over 500 million songs are listened everyday

Baidu Pictures Over 30 million people search pictures through Baidu

Baidu Video Over 28 million people watch Baidu video everyday

Same as Google, brands are able to generate traffic By leveraging keywords campaigns or display campaigns

COLLABORATION

WITH INFLUENCERS


The collaboration with proper KOL’s could increase The brand credibility and broaden the audience

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Social media’s explosive growth over the past years

created a tectonic shift in the way companies

approach marketing. Traditional tactics of pushing

out branded content to your audience are no

longer as effective as it once was. Consumers have

more power than ever because of social media and

they expect to engage with brands in real time.

Now traditional marketing strategies take a back

seat to new methods. These new strategies keep

consumers engaged while maintaining focus on

driving them to take action.

The collaboration with proper KOL’s could :

• Increase your credibility: Expand your brand’s

reach while establishing your authority

• Helps you broaden your audience: Get the access

to an audience that has a higher potential to

become consumers

• Can supplement the SEO efforts: As content is

created, influencers will often link back to your

website, creating a backlink which helps the SEO

• Circumvents pesky ad blockers: Another way to

approach those who block ads clearly do not

trust

We could leverage some tools to find out the proper KOL’s Or even communicate / negotiate with them there

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Fashion brands, especially the luxury brands are high on The collaboration with KOL’s

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7 million followers on Weibo More than 100,000 views per article on average on WeChat Gogobio is undoubtedly one of the most influential luxury fashion bloggers in China. Luxury brands like Louis Vuitton, Cartier, Dior, and Furla have all commissioned Gogoboi to promote their products or publish comments on celebrities wearing their collections on his social media channels. In 2016, Ye moved beyond fashion blogging and set up his own channel on Youku , China’s Youtube-like platform, where he interviews both Chinese and international celebrities such as TFboys, Karlie Kloss, Cate Blanchett, and Tim Burton.

Some brands’ China online strategy is almost based on their Influencer Marketing campaigns

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More than 2.7 million followers on Weibo More than 100,000 views on Weibo Mr. Bag writes about luxury bag trends, filling a niche in China’s chaotic fashion blogging world. Compared to most other bloggers whose primary audiences are female, Mr. Bags has also catered to men’s fashion. In 2017, Givenchy worked with Mr. Bags to design special Valentine’s Day edition “Mini Horizon” handbags, giving his WeChat followers exclusive access to purchase the bags. Luxury retailers are already taking note of his influence—Farfetch, for instance, once created a Mr. Bags Picks page to boost sales.

NATIVE OFFICIAL ACCOUNTS

SPECIFIC TO WECHAT


Subscription account or Service account?

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Service accounts

“Subscription ghetto”

Subscription accounts section

24 Detailed breakdown of the subscription vs service features : http://cpc.cx/fEg

SUBSCRIPTION ACCOUNT

Content centric consumer activation and interaction. Limited features, but best content reach

• Best when publishing >4 articles / month

• Daily push, but notifications are placed in the “subscription ghetto”

• Content is searchable on Sogou (搜狗) search engine

• Original content can be certified and re-shared by other accounts with mention to the original publisher

• Revenue from reader “tips”

• Revenue from display ads on articles

SERVICE ACCOUNT

Full consumer experience capabilities. Best for post-sales interaction and sophisticated activation

• 4 push’s / month, push appears as a regular notification

• Follower segmentation

• QR code tracking

• Native E-commerce & payments

• Coupons, loyalty programs

• Can connect to a customer service team (multiway chat)

• API access for follower input processing

• Advertise on Wechat

Subscription Account or Service Account?

http://cpc.cx/fEg

http://cpc.cx/fEg

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Messaging Interface

TYPE OF INTERACTIONS AVAILABLE

• Official Account side

• Text

• Embed

• Video (Sight, video hosted on Tencent video hosting platform 腾讯视频)

• Audio (voice message, music message)

• Pictures (Official Account library currently limited to 5,000 pictures)

• “Wechat cards”:

• Single media message

• Rich media message

• Message templates : service notices to users, such as product purchase successfully completed (only accessible to verified service)

• WeChat coupon (微信优惠券), Red envelopes (红包)

• User side

• Same interactions as with any Wechat contact : text, audio, pictures, Sights, location data etc. except contact cards, red envelopes, transfers

• Cannot forward content from conversations to official accounts

Service message : membership program

registration confirmation

ID : LOCCITANE_PROVENCE

Welcome text message with links

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Navigation Menu

TWO-TIER MENU BAR

• First level: 菜单

• 3 tabs maximum

• 4 Chinese characters maximum (8 letters)

• Second level: 子菜单

• 5 tabs maximum

• 8 Chinese characters maximum (16 letters)

• Different menu items can be shown to user groups, e.g. based on their Wechat language, gender, location etc.

2d level menu : 5 items max

1st level menu : 3 items max

Best practice : Welcome message.

Can be customized according to multiple criteria e.g. user language, source QR code

etc.

ID : DecathlonCN

MENU ITEMS CAN TRIGGER : 1. Message interaction

• Text

• Video

• Audio

• Pictures

• “Wechat cards”: single/rich media message

• URL sharing

2. Send to pages

• Web page (preferably optimized for Wechat browser display)

• WeChat coupon (微信优惠券)

• Wechat native membership card page

• Wechat native store page

• Wechat poll page

3. Wechat app functions

• QR code scanner

• Picture taking / upload interface

• Location picker

Navigation Menu

Rich message HTML5 page

ID : DecathlonCN 7

SINGLE MEDIA MESSAGE • Title/Headline

• Date

• Cover picture : 900 x 500px

• Lead in (导语): can be customized, otherwise the first sentence of the first paragraph is used

• Can only link to a wechat-hosted article (http://mp.weixin.qq.com/xx)

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Native Messaging System : OA Side

Title/Headline

Cover Picture

Lead In

IDs : walkthechat, wx-

gongkaike

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Native Messaging System : OA Side

MULTIMEDIA “RICH” MESSAGE • 1 Highlighted content + up to 7 sub pieces = 8 pieces

max (10 through the API)

• Headline can hide 1/4 ~ 1/3 of the picture’s bottom (depends on the length of the headline) => around 120px for a single-lined headline

• Cover pictures : First sub message: 640 x 320px / Sub messages thumbnails : 80 x 80px

Cover item

Sub pieces

ID : Uniqlo

ITEMS CAN LINK TO • Wechat articles

• Web pages (under conditions)

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Native Messaging System : Keywords

KEYWORD BASED AUTOMATIC ANSWERS • When user initiates a dialogue with an official

account, the account can send the user an automated response based on

• keywords the user wrote

• User info (e.g. location, gender, language etc.)

• Voice messages can be processed to extract keywords (speech to text analysis)

• Rules to determine when and how these responses are sent out :

• Max. 200 rules

• Max. 10 keywords per rule

• Max 5 responses per keyword

• “exact match” and “partial match”

• Automatic general response for when user content doesn’t match any keywords

ID : DecathlonCN

Number based message

interaction tree

Links to web pages

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Example : Triggering Information Display

ID :

DecathlonCN

Latest seasonal products

Number based

message interaction

tree

32 ID : ikea-cn

Example : Simple Quiz

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Send personalized pictures of the

brand product with follower’s name

Example : Product Personalization

ID : burberry_official

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Example : Automated “Siri-like” Concierge

“What’s the weather like?” “What are the restaurants nearby?” Dianping results

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