1) Chinese e-commerce is dominated by large online marketplaces like Alibaba's Tmall and Taobao, which enable millions of individual merchants and sellers to reach customers.
2) Social media platforms like WeChat have become essential online communities and mobile platforms where users can access services, make payments, and participate in e-commerce from within the app.
3) Mobile payments using platforms like Alipay have become widespread in China and other developing markets, as have cash on delivery options, reflecting how e-commerce is integrated into daily life.
5. Source: Age of Man - interactive map, National Geographic
âŠor vastly different
income levels
6. But these factors (even combined) merely tell part of
the storyâespecially when it comes to commerceââš
and thatâs what weâre going to discuss today
7. China has 14 cities with populations
over ïŹve million...
https://www.ïŹickr.com/photos/decar66/6341327886
8. ...a whopping 41 cities with
more than 2 million inhabitants
http://www.ïŹickr.com/photos/tahini/10468208216
9. ...and a âmiddle classâ growing at a rate of
80,000 people a day
http://www.ïŹickr.com/photos/tahini/10468208216 Source: China Connect
10. rural residents can be challenging
http://www.ïŹickr.com/photos/lukewebber/4588854679
reaching Chinaâs 600 million
11. its close to 700 million urban residents
but opening enough stores to service
can be outrageously expensive
http://www.ïŹickr.com/photos/tuchodi/5620884999
(or downright implausible)
15. 76%
of online retail
involves individual
merchants
of online retail is
sold through online
marketplaces
90%
Source: The Economist
16. Chinaâs giant, virtual marketplaces enable
buyers and sellers to ïŹnd each other
a modern virtual
version of this
http://www.ïŹickr.com/photos/mckaysavage/135932500/
like public markets and town centres,
17. The largest marketplace is Alibabaâs Tmall which contains products from more than
150,000 merchants and 200,000 well known brands.
18. Tmall charges an entry fee, and a commission for each sale, but in return provides a
high visibility, high trafïŹc, customizable, social-media and mobile optimized e-
commerce platform.
19. apple.tmall.com
For major brands such as Apple, hosting a virtual storefronts on Tmall is a good
alternative to opening hundreds (or possibly thousands) of brick and mortar stores
across the country.
20. Alibaba also offers a C2C site called Taobao, which enables consumers and smaller
merchants to sell products online. Taobao is a bit like EBay, but vendors arenât limited
to selling things...
21. They can also sell services. This Taobao-based travel agent doesnât just sell you a trip,
they can also arrange a travel visa, sell you a Thai 3G SIM card, a wi-ïŹ dongle, a
subway pass, or local transportation.
22. C2C and B2C
commerce on Taobao
Tmall merchants pay a
commission and an
entry fee
weâll discuss
this bit later...!
TaoBao merchants donât pay to sell
stuff, they buy advertising and other
services to help them stand out
andâA mix of ,
with a dash of .â
23. This family of sites enables consumers to shop for a huge range of products that
might otherwise never be available in their region. (And yes...Tmall can sell you a new
Peugeot...or a Lamborghini).
24. Theyâve also enabled millions of
new jobsâespecially in smaller
towns or rural areas where micro-
businesses can now sell their
locally made products or produce
to an audience of billions.
http://www.ïŹickr.com/photos/tuchodi/5642172895
26. â...most of the people have phones but [in Lagos]
there are only 3 malls per 21 million inhabitants...
Itâs a unique time...the right time to leapfrog over âofflineâ.â
- jumia.com co-founder
THE BIGGEST ONLINE SHOPPING MALL IN AFRICA
Egypt | Kenya | Uganda| Ivory Coast| Nigeria | Morocco
*thatâs 60K people per retail outlet compared to 7K in APAC and 389 in the U.S.
29. where consumers can explore a vast
user-curated selection of choicesâ.
| Open Youthology
âOnline shopping neighbourhoods are
online destinations created by social media,
30. Meilishuo
(which means âbeauty talkâ)
32M users in 2012
similar to an online travel agent
these sites get a cut for each outbound transaction
(for this site alone, that was 5-6M clicks a day in 2012)
31. Part of the reason these services work, is that they feed into the virtuous circle of
mobile and social media adoption.
Source: The internet economy in the G20 (PDF)
Developing markets are going âstraight to socialâ
Users adopt social networking quickly as they come online
33. ...but the most popular social media services in China
arenât just âsitesââtheyâre platforms.
34. one of the most popular
(lately) is WeChat
or WÄixĂŹn - - in China
ïŹve years old
mobile-only
700+ million MAU
35. mobile-only, and far more
than just a messaging app
(recorded) voice chat
RSS-style subscription content
mobile contact exchange
highly customizable API
payment platform
text chat
group text or video chat
photo-blogging
virtual wallet
36. WeChatâs API is extensive, enabling brands to create âmini-sitesâ containing
news, chat-based support* or full-blown transactions through with WeChatâs
virtual wallet and payment platforms.
WeChat subscription channels API integration enables
customizations such as
sub-sections...
download our app
ïŹnd nearby
stores
...and product or service
inquiries using an automated
short messaging service
hereâs the stuff you can
ask regarding coffee...
âcappuccinoâ
tell me about âcoffeeâ
*delivered by a mixture of bots and humans
37. Messaging, bots and other ânativeâ services are enhanced by mobile-only âlight appsâ (
) âone-off, zero-download, hyper-targeted mini-sitesâ that enable more creative or
complex experiences.
38. âPhilosophically, while Facebook and WhatsApp measure growth by
the number of daily and monthly active usersâŠWeChat cares more
about how relevant it is in addressing the daily, even hourly needs of
its usersâŠ[its] goal is to address every aspect of its usersâ lives,
including non-social ones.â
â Connie Chang, a16z
39. http://www.ïŹickr.com/photos/ducdigital/2892313560
Virtual wallets, mobile payment and alternative ïŹnance models are
quite popular in emerging economies, as they help address a whole
host of local challenges...
1/4 of adults
across sub-Saharan
Africa as a whole only
have accounts at formal
ïŹnancial institutions
less than
of Indonesians have a
credit card
15%
Source: Wall Street Journal
41. consumers without credit cards can also choose to pay
https://www.ïŹickr.com/photos/kamshots/468265643/
in countries such as China, Nigeria and Indonesia
for online purchases using cash on delivery
42. https://www.ïŹickr.com/photos/wippetywu/14295584182/
or M-Pesa on delivery, or [mobile] airtime
on delivery, or whatever it isâŠ"
- interview with Parinaz Firozi, Jumia MD, Kenya
if it will be deliveredâŠwe allow cash on delivery,
ââŠif youâre not sure if this is a scam,
43. In most cases, mobile is the glue that ties these
platforms, services and communities together...
44. WeChat has for example,
built much of its functionality
around the QR code
45. WeChat automatically generates a QR code for each account. To follow a person
or brand, simply scan the code (on a device, business card, web site etc.)
(WeChat even provide templates enabling personalization of the code to suit your personality or your brand.)
46. This reliance on QR codes works, because in China (and many other parts
of Asia) almost every app (including locally built web browsers!) has a built
in QR code reader.
Qunar (travel brand) Baidu web browserTaobao
47. in China using QR codes to transform
virtual activities into physical ones
(and vice versa) has become common
(...one might say mundane)
48. These brands and consumers arenât merely
âleapfroggingâ desktop, or ïŹnance, or physical retail...
49. in mobile
transactions in 2013
$25 billion
in mobile
transactions in 2013
$150 billion
(Alipay - Alibabaâs virtual currency)
they inhabit a giant rapid-prototype of our future...
Source: Business Insider
50. a future inhabited by people
https://www.ïŹickr.com/photos/paulk/4693602730
for whom the words âofflineâ, âonlineâ
and âmobileâ may have already
become irrelevant
51. It also enables brands operating in these markets to
try things that might otherwise sound a little crazy...
52. In Russia, e-commerce
brand Lamoda turned poor
postal infrastructure and
payment on delivery into an
excuse to try something that
seems completely un-
scaleable...
53. â...Lamoda sends sales assistants directly to
homes...uniformed delivery men bring the clothes,
wait for [customers] to try them on, offers fashion advice,
take returns and process payments on the spotâ
- Russia: Where the Deliveryman Gives Fashion Advice
https://www.ïŹickr.com/photos/41738141@N06/6814977720/