Diese Präsentation wurde erfolgreich gemeldet.
Die SlideShare-Präsentation wird heruntergeladen. ×

B2C Cross-border E-commerce, China

Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Wird geladen in …3
×

Hier ansehen

1 von 55 Anzeige
Anzeige

Weitere Verwandte Inhalte

Diashows für Sie (20)

Andere mochten auch (13)

Anzeige

Ähnlich wie B2C Cross-border E-commerce, China (20)

Weitere von Business Finland (20)

Anzeige

Aktuellste (20)

B2C Cross-border E-commerce, China

  1. 1. B2C Cross-border E-commerce, China Food from Finland Pre-study
  2. 2. Table of Content 1/4 1. Executive summary 2. Market overview 1. Market Dynamics and trends 2. Internet penetration 3. Consumer behavior & demographics 4. Growing demand for imported Food 5. Marketplace VS Brand Store 6. Main players 7. Mobile Commerce 8. Digital Payment 9. E-commerce and Government support 10. Double 11 Festival
  3. 3. Table of Content 2/4 3. Cross-border e-commerce 1. Trends & Development 2. Consumer 3. Tax Rates 4. The Main Players 5. Fulfillment model 6. Why Do Brands Choose Cross border 4. Tmall Global 1. Group & Value Network 2. Page Location & Traffic Source 3. Who can sell on Tmall Global? 4. Store Models
  4. 4. Table of Content 3/4 5. JD Worldwide 1. Group & Value Netowrk 2. Page Location & Traffic Source 3. Who can sell on JD Worldwide? 4. Store Models 6. Cross-border VS Local Trade
  5. 5. Executive summary • Although China’s economy has suffered from a great deal of instability this year, its ecommerce sector is and will remain a major driver of economic growth. • The typical Chinese online shopper is 20-35 years of age and live in urban coastal areas. Women make a majority of the online purchases in a family household. • 40% of Chinese consumers buy food online, in contrast to just 10% of the US consumers • The food currently offered online is dominated by dry packaged or canned food. The product categories of imported fruit and other types of fresh food are among the fastest growing categories in urban areas. • Chinese consumers are looking for quality & safe imported food products. The demand for health food and supplements is also growing. Domestic food scandals and concern for food safety are some of the key drivers of the demand. • B2C e-commerce in China is dominated by marketplaces, such as Tmall and JD. Almost all large B2C shopping platforms largely consist of products which are offered by a third party – brand owner, wholesaler, distributor etc.
  6. 6. Executive summary • Cross-border retail ecommerce has grown strongly in China in recent years as the number of channels, payment methods and offerings has improved. Meanwhile, targeted government support has also encouraged new entrants into the sector. • In China, cross-border mainly operates through two models: the direct shipping from overseas model or the bonded warehouses model. • Guaranteed product quality is the prime reason behind cross-border purchases made by Chinese consumers. • Cross-border e-commerce is an opportunity for brands to enter China without having any physical presence or trademark license in China. • Tmall Global and JD Worldwide both offer cross-border models for foreign brands. There are also many smaller, specialized players. O2O is slowly developing.
  7. 7. Market Overview
  8. 8. Market Overview 2.1 Market Dynamics and trends • China’s macro economy has showed sustained signs of weakness throughout 2015 and the country’s gross domestic product (GDP) is forecast to grow 7% in 2015, the slowest pace in 25 years. • However, China’s retail sales value rose 10.4% on the year in H1 2015 to RMB14.16 trillion ($2.30 trillion), according to the National Bureau of Statistics China. • This is believed to be the result of the government’s long-held policy aim of driving domestic consumption to reduce reliance on investment and exports. • E-commerce is a primary driver of China’s retail sales growth. In a report from eMarketer, the research firm estimates that retail ecommerce sales, excluding travel and events tickets, will rise 42.1% in 2015 to $672.01 billion, easily making China the world’s largest e-commerce market. China is believed to account for just over 40% of the world’s retail e-commerce sales this year.
  9. 9. Market Overview 2.1 Market Dynamics and trends According to eMarketer study (July 2015) e-commerce will continue to represent a growing share of retail sales in China, rising from 15,9% in 2015 to nearly 30% in 2018 $472.91 $672.01 $911.25 $1,208.31 $1,568.39 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 0 200 400 600 800 1000 1200 1400 1600 1800 Y 2014 Y 2015 Y 2016 Y 2017 Y 2018 BillionUSD Year Retail eCommerce sales in China 2014-2018 Retail eCommerce Sales % Change % of total retail sales Source: www.eMarketer.com
  10. 10. Market Overview 2.1 Market Dynamics and trends Some of the most outstanding trends in the e-commerce industry are: • MOBILE. The use of smartphones for e-commerce purchases is growing faster in China than in any other developed market, including the US. In 2015, mobile will account for about half of all retail ecommerce sales in China. • GROWTH IN RURAL AREAS. Meanwhile specialized retail categories are likely to continue to grow in major Tier 1 cities (Beijing, Shanghai, Guangzhou and Shenzhen), China’s rural areas will be a major area of growth for mature categories, due to increased internet penetration in rural areas. Mobile is the preferred device for rural e-commerce activities, as almost two-thirds transacted via smartphones. • THE RISE OF CROSS-BORDER E-COMMERCE. Cross-border retail ecommerce has grown strongly in China in recent years as the number of channels, payment methods and offerings has improved. Meanwhile, targeted government support has also encouraged new entrants into the sector • FROM C2C TO B2C. China’s e-commerce sector is currently undergoing a shift from C2C to B2C in terms of retail sales. The trend is a result of the consumers constantly becoming more concerned with the quality of the goods sold online. The trend is expected to continue through to 2018, when B2C sales will account for almost two-thirds of the overall retail ecommerce market.
  11. 11. Market Overview 2.2 Internet penetration • According to China Internet Network Information Center (CNNIC), China’s total online population rose by 18.9 million in the first half of the year alone, taking the total to 667.7 million. • Research agency eMarketer projects that the online population will reach 674.3 million by the end of this year, up 4.1% on the year. • China’s internet penetration is still to reach 50%, and is lagging behind the internet-connection levels seen in Asia-Pacific’s most developed economies (like Australia, Hong Kong, Japan, Singapore and South Korea) where internet penetration is at or above 75%.
  12. 12. Market Overview 2.2 Internet penetration  eMarketer forecasts that China’s Internet penetration rate will pass 50% next year, when just over 700 million residents will go online at least monthly.  A February 2015 report by McKinsey & Co. suggested that largest share of internet users in China in fact live in rural areas. 617.60 647.70 674.30 700.10 736.20 778.20 827.20 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 0 100 200 300 400 500 600 700 800 900 Y 2013 Y 2014 Y 2015 Y 2016 Y 2017 Y 2018 Y 2019 millions Year Internet Users and Penetration in China, 2013-2019 Internet users % of population % change Urban Rural 2007 26,00% 7,40% 2008 33,90% 12,30% 2009 43,00% 15,50% 2010 49,60% 18,60% 2011 54,60% 20,70% 2012 57,40% 24,20% 2013 60,30% 28,10% 2014 62,80% 28,80% % of population in each group Source: www.eMarketer.com
  13. 13. Market Overview 2.3 Consumer behavior & demographics • According to Nielsen research, the typical online buyer of imported products in China is female, younger than 30 and with an income of more than RMB 11,000 (approx €1600) per month. • Frequently cited reasons for shopping online include: – Accessibility. – Convenience. – Low prices. – Greater assortment. – Detailed product information & customer reviews. – Confidence: consumers place higher levels of trust in the authenticity of purchases made on major B2C platforms such as Tmall, JD.com and Yihaodian.
  14. 14. Market Overview 2.3 Consumer behavior & demographics • Chinese customers are disloyal to brands, as they like to switch between product providers, and often try new brands and products. • Some 40% of all online sales are believed to be assisted sales. Also, they often leave reviews. • Chinese customers are demanding in terms of communication, as they prefer frequent contact with the product provider – more than 70% uses customer service before placing an order. • Individuality is becoming increasingly important to them, as the Chinese customers are progressively targeting purchases which reflect their individual identity, which leads to development of brand awareness and diversification of tastes.
  15. 15. Market Overview 2.4 Growing Demand for Imported Food • 40% of Chinese consumers buy food online, in contrast to just 10% of the US consumers (Mckinsey). • The food currently offered online is dominated by dry packaged or canned food. The product categories of imported fruit and other types of fresh food are among the fastest growing categories in urban areas. • Chinese consumers are looking for quality & safe imported food products. The demand for health food and supplements is also growing. • Improved delivery time has driven the increased frequency in food purchases. Today, some 40% of retailers in China are offering same- or next-day delivery, up from only 29% in 2011.
  16. 16. Market Overview 2.4 Growing Demand for Imported Food • By 2018, China is expected to become the top importer of foreign food products, with the total value of food imports set to reach RMB 480 billion (US$77 billion). • Edible vegetable oils, cereal and milk products account for roughly half of all food imports. • Of particular interest among food imports are organic food items. The organic food market in China has tripled since 2007 to currently account for 1.01 percent of total food consumption, which is still lower than the 5 to 8 percent of the market in areas like Europe and the U.S. • Current rough estimates for the market value of organic imports are around US$20 million, with consumers typically middle and upper class Chinese with children.
  17. 17. Market Overview 2.4 Growing Demand for Imported Food The increased demand is a result of: • Recent domestic food scandals and food safety issues. • Environmental issues (poor air quality and dead pigs in Shanghai’s Huangpu river – the city’s main tap water source). • China has a growing middle class with more purchasing power. • The good image of western food and its superior quality. • Growing healthy lifestyle/ work life/balance trend in China –the Chinese are looking for healthy food products & supplements. • The expanding consumption in combination with China’s resource constraints. China is expected to soon become the largest importer of agriculture and food products in the world.
  18. 18. Market Overview 2.4 Growing Demand for Imported Food Apparel is the most popular product category for online purchases, however, however, the most frequent online purchases are packaged and fresh food (34 times a year vs. 22 times for apparel)
  19. 19. Market Overview 2.5 Marketplace VS Brand Store • B2C e-commerce in China is dominated by marketplaces, such as Tmall, JD, etc. • Almost all large B2C shopping platforms largely consist of products which are offered by a third party – brand owner, wholesaler, distributor etc. • Many brands (especially fashion retail brands) have a marketplace store, as well as a brand store. However, for most brands, 90% of the sales come from the marketplace, compared to the brand store. Some brands do less than 1% sales from their brand store page. • Meanwhile marketplaces are volume driven, the brand store plays an important role in branding, corporate communication, and marketing. • Marketplaces (in general) generate vague search results on China’s top search engine Baidu and other Chinese search engines, hence the need for a brand store.
  20. 20. Market Overview 2.5 Marketplace VS Brand Store Marketplace store (Tmall, JD) • 90% of all sales • 50% of the brand’s SKUs (mainly bestsellers) • Heavy marketing • Needs a perfect quality of service (chat function, etc) • Sales are public • Volume driven • Enclosed world –the marketplace owns the customers and the data • Vague search results on Baidu Brand store (.cn store) • 10% of all sales (some brands have less than 1% sale on their own website) • Full assortment of SKUs • Branding • History • Values • E-magazine • Shop locator • OmniChannel • eCRM
  21. 21. Market Overview 2.6 The Main Marketplace B2C Players Source: www.eMarketer.com B2C e-commerce in China is dominated by marketplaces, such as Tmall and JD. These two large players controls 80% of the B2C market. 0% 10% 20% 30% 40% 50% 60% 70% Tmall (multi) JD.com (multi) Suning (Electronics) vip.com (Flash sales) Gome (Electrical Appliance) Yihaodian (Groceries) Dangdang (Electronics) Amazon.cn Yixun (Electronics) Jumei (Beauty) Other Retail eCommerce Sales Share in China, by Site, 2014
  22. 22. Market Overview 2.6 The Main Marketplace B2C Players • Alibaba is the biggest marketplace player in the Chinese e-commerce industry. Clearly the number one platform on the B2C market is Tmall. • According to iResearch, Tmall accounted for more than 60% of China’s retail ecommerce sales in 2014, up from just over 50% the year before • The second largest online retailer in China is JD (Jingdong). Their product covers 12 main categories with thousands of brands. • JD.com also increased its market share in 2014 to 18.6% from 18.3%. • Yihaodian, which sells groceries digitally and is majority owned by Wal-Mart, is another interesting e-commerce marketplace for food companies.
  23. 23. Market Overview 2.7 Mobile commerce • The use of smartphones for e-commerce purchases is growing faster in China than in any other developed market. • A report from eMarketer estimates that mobile will account for about half of retail ecommerce sales in China in 2015, compared with 22% in the US and 33% in the UK (according to data from RetailMeNot’s June 2015 “Mobile Retailing in Europe and North America” report). 98.50% 94.20% 85.50% 66.30% 49.40% 38.90% 32.40% 28.80% 1.50% 5.80% 14.50% 33.70% 50.60% 61.10% 67.60% 71.20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Y 2011 Y 2012 Y 2013 Y 2014 Y 2015 Y 2016 Y 2017 Y 2018 Retail and C2C eCommerce transaction share in China, Desktop/Laptop vs. Mobile 2011-2018 Mobile Desktop/laptop Source: www.eMarketer.com
  24. 24. 86.20% 4.20% 2.10% 0.80% 0.50% 0.50% 0.40% 0.30% 0.30% 0.30% 4.40% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Taobao Market place and Tmall JD.com cip.com Suning Jumei Yihaodian Gome Amazon.cn Dangdang Maimaibao Other Retail and C2C mCommerce Sales Share in China, by Site, 2014 Market Overview 2.7 Mobile commerce Source: www.eMarketer.com When it comes to mobile commerce, Alibaba is the clear market leader.
  25. 25. Market Overview 2.7 Mobile commerce • Mobile usage in China is high because 3G/4G is growing fast, and because many people, especially in rural areas, are just moving directly from a feature phone to a smartphone, completely skipping desktops. Feature phone Desktop Western countries China Smartphone
  26. 26. Market Overview 2.8 Digital Payment • Chinese consumers have been quick at adapting to new technology and have embraced digital payment. • In Q3 2014, total settlement transaction value of China third-party online payment market was RMB2,237.6 billion (US$364.29 billion). • The top three third-party online payment providers were Alibaba’s Alipay, Tencent’s TenPay and China UnionPay Merchants Service. • Alipay controls approximately 54% of the online payment made throughout China, according to a report by market research firm China Skinny. • Alipay wallet can easily be linked to individuals’ bank accounts given its compatibility with more than 65 financial institution and credit circuits, including Visa and Mastercard. • In 2014, Alipay processed more than 80 million transactions per day on average, thanks not only to payments made on online marketplaces but also to brick-and-mortar retailers that offer Alipay as a mean of payment. • TenPay, which is the payment solution of the social media and gaming group Tencent, controls about 20 per cent of the market. • Both Alipay and Tenpay are highly advanced and allows consumers to make online purchases, pay bills, and pay for taxi rides. Consumers also use Alipay and Tenpay for making instant funds transfers.
  27. 27. Market Overview 2.8 Digital Payment • The same way as they bypass desktop, the Chinese bypass credit card payments, opting for digital payment solutions such as Alipay or Tenpay. • Both Alipay and Tenpay are optimized for mobile. Digital payment Credit card Cash payment
  28. 28. Market Overview 2.9 E-commerce and Government support • The Chinese government is encouraging use of the Internet in foreign trade, as well as entrepreneurship and innovation in hopes on the sector as a new growth engine for the economy. • The State Council released a guideline on June 20 2015, saying the customs administrator will streamline customs procedures for e-commerce exports and imports to make the processes simpler and quicker, while the quality supervision authorities will allow collective declaration, examination and release of goods, according to Xinhua News. • The government will keep export taxes low while formulating import tax policies with the aim of increasing domestic consumption, promoting fair competition and strengthening import tax management, it said. • It will also encourage domestic banks and institutions to launch cross-border electronic payment businesses and advance pilot overseas payments in foreign currencies. • The move to boost cross-border e-commerce comes as China’s economy grows at its slowest pace in three decades and is seeking ways to shift its growth away from a dependence on manufacturing toward higher-value services.
  29. 29. Market Overview 2.10 Double 11 Festival • China’s Singles Day/Double 11 festival is the world’s largest online shopping frenzy, that takes place annually on November 11. • Tmall.com invented the 24-hour sale five years ago to take advantage of the wildly popular Singles Day, when young people in mainland China either celebrate or lament “being single.” • Tmall.com started the sales with 27 merchants in 2009. Since then the festival has grown and the Double 11 2015 was held by both online and offline companies, including Alibaba, Suning, Tencent, Jingdong, Amazon, Yihaodian and others, • The Singles Day sale starts from midnight (Beijing time) on November 11 and goes on for 24-hour. Brands that take part in the festival see their selected goods go on a 50% discount. • The total online retail transactions on Double 11 2015 in China reached 122.937 billion yuan (US$19.34 billion). The total single day’s transaction value on Tmall on reached 91.217 billion yuan (US$14.34 billion), 74% of total; 68.67% came from mobile. On average, Alibaba processed 85,900 transactions per second.
  30. 30. 3. Cross-border e-commerce
  31. 31. Cross-border e-commerce 3.1 Trends & development • International e-commerce is called cross-border ecommerce. • Cross-border retail ecommerce has grown in recent years as the number of channels, payment methods and offerings has improved. • China already has 18 million cross-border shoppers. • The primary advantages of cross- border sales are reduced import taxes and simpler quarantine and inspection procedures. • Examples: healthcare products are not required to carry China’s mandatory ’Blue Hat’ certification. • Companies with no presence in China qualify for cross-border e-commerce. • 35% of China’s online shopping consumers bought cross-border products online in 2015, and 73% respondents said the price was the main reason for cross-border shopping according to PayPal and Ipsos research.
  32. 32. Cross-border e-commerce 3.1 Trends & development • China’s leading e-commerce marketplaces Tmall and JD have both launched cross-border sites Tmall Global and JD Worldwide. • Cross-border online shoppers’ top shopping destinations: US (84 %), Hong Kong (58 %), Japan (52 %), UK (43 %), Australia (39 %). • Top-selling international product categories include baby and maternity products, apparel; cosmetics; electronics and home appliances; health and nutrition; grocery and fresh foods such as Washington State apples, California wine, and seafood from Ireland. • 2015 has also seen the arrival of bricks-and-mortar stores set up by cross- border e-commerce operators, and this 020 trend is expected to carry on.
  33. 33. Cross-border e-commerce 3.2 Consumer • Guaranteed product quality is the prime reason behind cross-border purchases made by Chinese consumers. • Lower prices, improved product range and access to brands and products that are not available from domestic sources are other motivating factors. 67.8% 65.5% 53.0% 52.0% 46.7% 39.6% 0.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Assured product quality Cheaper Brand preference Scarcity of products: not available on domestic sites Diversified products Bought the product when traveling overseas and willing to buy it again Others Major Reasons for Cross-border Online Shopping in 2014 Source: www.eMarketer.com
  34. 34. Cross-border e-commerce 3.3 Tax rates (compared to ordinary trade) Cross-Border e- Commerce Trade Ordinary Trade Personal Postal Articles Tax Rate Customs tariff rate VAT Food, Beverage Food 10% 10% - 35% 17% Beverage 10% - 65% 17% Liquor 50% 40% - 65% 17% Tobacco 50% 40% - 65% 17% Testile & Manufactured Goods Clothing 20% 9% - 36% 17% Acceossory 9% - 36% 17% Home Textile 9% - 36% 17% Others 9% - 36% 17% Leather Wear & Accessory 10% 25% 17% Luggage & Boot Lugagge 10% 25% - 35% 17% Satchel, Packsack, Handbag 25% - 35% 17% Wallet, Key Case 25% - 35% 17% Others 10% 17% Boot 25% 17% Source: JD (JingDong))
  35. 35. Cross-border e-commerce 3.4 The Main Players • China’s two largest e-commerce players, Alibaba and JD, have both launched specific sites for brands that wish to operate cross-border e-commerce to China: Tmall Global and JD Worldwide. • There are also several other cross-border players, such as Kaola, Ymatou and KJT. • Many foreign brands start their cross-border journey on Tmall Global, before expanding to JD Worldwide (stores can easily be integrated by a TP) and YMatou.
  36. 36. Cross-border e-commerce 3.5 Fulfillment model Customer places an order on the site and make the payment to site owner (Tmall/JD) Seller ship to customer as individual parcels from their own fulfillment center or via freight forwarder Customer acknowledge receipt; sellers receive payments Customer places an order on the site and make the payment to site owner (Tmall/JD) Sellers collect multiple orders and ship in bulk to a specific fulfillment center at TFZ. Individual orders packaged in TFZ; China customs release and domestic carriers pick up parcels. Customer acknowledge receipt; sellers receive payments Sellers ship to and store inventory at a specific warehouse at TFZ, in advance of orders Customers place orders on the site and make payment (Tmall/JD) Individual orders packaged in TFZ; China customs release and domestic carriers pick up parcels. Customer acknowledge receipt; sellers receive payments 1 2 3 Direct shipping from Finland Through Bonded Warehouse at FTZ Inventory kept at Bonded Warehouse (FTZ)
  37. 37. Cross-border e-commerce 3.6 Why do brands choose cross-border? • Cross-border e-commerce is an opportunity for brands to enter China without having any physical presence or trademark license in China. • In some cases it requires less efforts and investment than opening a store on a local e- commerce site (Tmall Global VS Tmall local) • It’s a good place for companies to start their marketing strategy in China and to learn about what’s needed for selling online to Chinese consumers.. • A good platform for building the image of being an imported, premium and quality brand. • It’s not a unique sales channel –brands can easily add other online or offline sales channels. Many brands use multiple channels to build volume. • A way to sell to consumers without attracting the 35% import duty.
  38. 38. 4. Tmall Global
  39. 39. Tmall Global 4.1 Group & Value Network • Tmall Global is an that belongs to Alibaba Group. It was launched in February 2014. • Tmall Global (www.tmall.hk) is a solution that enables companies based beyond China’s borders to directly advertise and sell to millions of Chinese consumers. • Overseas companies without China business licenses are eligible to apply to Tmall Global. • Orders can be fulfilled and shipped from outside of China, and customer payments are settled in the preferred native currency (USD, EUR, JPY, etc). • Companies are required to provide a China-based product return arrangement and Chinese-language customer service support. • There are three store types for Tmall Global: Flagship, Specialty & Franchise store. • All sales on Tmall Global are transparent (just like on Tmall)
  40. 40. Tmall Global 4.1 Group & Value Network Tmall Global is part of the Alibaba empire
  41. 41. Tmall Global 4.1 Group & Value Network Source: Web2Asia
  42. 42. Tmall Global 4.2 Page location & traffic source Tmall.com landing page Direct link to Tmall Global
  43. 43. Tmall Global 4.3 Who can sell on Tmall Global? Requirements for Merchants • Company must be registered in Foreign Country • Merchants should own trading license • Brand ownership supporting documents • Merchants should ave 100% authentic products • Well-Known Foreign B2C merchant / retailers • Well-Known Foreign brands who have no official presence in China • Must have a turnover of over CNY 100,000,000 in the previous year Operational Requirements • Overseas brands must provide Chinese customer service • Any product returns should be handled in China • All Products on Tmall Global must meet specific standard. For example, Product Title must include “brand name” + “product name” + “other descriptions( specification/style/material)”
  44. 44. Tmall Global 4.4 Store Models Tmall Global promotes three modes of operation: • Authorized/Franchise Store • Flagship Store • Specialty Store Source: Bysoft
  45. 45. 5. JD Worldwide
  46. 46. JD Worldwide 5.1 Group & Value Network • JD Worldwide belongs to JD (Jing Dong), that claims to be the “The Largest Online Direct Sales Company in China” (since Alibaba does not actually function as a retailer but rather as a platform for retailers) • It has a self-operated nationwide fulfillment infrastructure • JD is renowned for good customer service and for providing outstanding user experience. • JD has “zero-tolerance” policies over counterfeit products Source: JD.com
  47. 47. JD Worldwide 5.1 Group & Value Network • JD launched JD Worldwide in April 2015 • Similar to Tmall Global it offers overseas brands and merchants an easy entry way to well to Chinese consumers. • JD Worldwide claims that they will offer a range of support to retailers to enable them to take full advantage of the JD Worldwide platform, including support on marketing to JD.com's nearly 100 million active users and access to JD.com's unparalleled nationwide logistics network • JD has developed the JD Worldwide model to help foreign companies leverage the new policies of China’s Tariff Free Zone (TFZ, 保税区), which is practice means: – No Chinese legal entity required for overseas companies – Receive sales proceeds in foreign currency – Reduced customs duty – No income tax – The foreign companies do not need to have a legal entity or bank account in China. • The platform offers two operation models: Reseller model & Platform Model • JD Worldwide, unlike Tmall Global, does not disclose sales
  48. 48. JD Worldwide 5.1 Group & Value Network • In March, 2014, JD and Tencent publically announced their strategic partnership. Tencent is China’s largest social media company, and the company behind the immensely popular social APP “Wechat/Weixin,” used by 600 million Chinese. • The strategic partnership enabled JD to tap into Tencent's significant mobile and Internet user base, and Tencent to leverage JD's e- commerce services to offer its users superior user experiences.
  49. 49. JD Worldwide 5.1 Group & Value Network Source: Web2Asia
  50. 50. JD Worldwide 5.2 Page location & traffic source JD landing page Link to JD Worldwide
  51. 51. JD Worldwide 5.3 Who can sell on JD Worldwide? Mandatory criteria • Must own an overseas legal entity • Must have qualification for retailing and trading overseas • Must be brand owner, franchiser, authorized distributor or trader with full supplier chain documentation Admission priority • Must be brand owner, franchiser or reputable retailer • Must sell reputable overseas products • Must have excellent operation team and e-commerce experience • Must be reputable B2B/B2C online company, or brand owner or e-tailer with good e-commerce experience • Must have the following categories: maternal and baby, apparels and accessories, cosmetics and personal care, heath supplements, food, bags/luggage, watches and etc. Source: http://www.advangent.com (April, 2015)
  52. 52. JD Worldwide 5.3 Who can sell on JD Worldwide? Requirements for products and service • Products: Must be authentic products, originated from or intended to be sold overseas, shipping to China through China custom with approved procedures • Product page/details: Product information must be in Chinese language and use metric unit, must provide Chinese-speaking customer service staff • Must dispatch product within 72 hours after order being placed by customer. Products can be delivered to China directly via international parcel service, or shipped from bonded warehouse in China. Parcel information must be trackable. • Must provide product return address in mainland China Source: http://www.advangent.com (April, 2015)
  53. 53. JD Worldwide 5.4 Store Models JD promotes 3 modes of operation: • Franchising Business Partner. This module allow merchants to set up store in JD and get facility to use JD warehouse to stock their products. JD takes the full responsibility providing warehousing, delivery and customer service. • Licensing Business Partner. Merchants may set up store and complete packaging in order to ship the order. JD will supervise customer service and process invoice. • Self Operation Partner. Merchants may sell on the JD platform, although warehousing and delivery must be handled by the merchants themselves • Warehouse: Merchants can use a warehouse service provided by JD through selected packages. • Logistics: Merchants can use a logistic service provided by JD through selected packages. JD’s 211 same-day and next-day delivery program covers 135 and 951 counties and districts, respectively.
  54. 54. 6. Cross border VS local trade
  55. 55. 6.1 Cross-border VS local trade Local trade Cross-Border E-Commerce Tmall local JD local Tmall Global JD worldwide Commission charge on sales 2-5% 3% to 6% 2% to 10% Tmall depost (once) Tmall tech 15000 - 150 000 CNY 25 000 USD 10 000 - 15 000 USD Maintanance fee (yearly) 10 000-150 000 CNY 5000-10 000USD 1000 USD Target consumer Mainland china Mainland China Legal entity and tax registration Within China Outside China Corporate bank account Within China Home country bank account Warehouse Within China Outside China Trademark Registered in China Any Country Shipment & delivery Within China Overseas Directly to Chinese consumers Shipping to China In bulk (by sea) Ship (by air) as individual parcels to end consumers or in bulk (by sea) Order fulfillment Originates from within China Originates from overseas or bonded warehouses Customs clearance Regular requirements Relaxed requirements for food and health supplements Delivery time 0-1 day 5-20 days Shipping cost / order Low Medium - High Import duty rate Mostly 30-60% Mostly 10-20% Customs clearance hurdle Generally Higher Relaxed requirements for food, cosmetics, and health supplements Return process Returns must be handeled locally (in China) Returns must be handeled locally (in China) Store types Flagship store Speciality store Franchise store Franchising Licencing Self operating Flagship store Speciality store Franchise store Franchising Licencing Self operating Payment methods Alipay Tenpay / JD pay Alipay Tenpay / JD pay Suitable products - Well known brans in China with demonstrated potential to achieve large sales volumes in China - Proven sales track record - New brand or products to China - Small to medium businesses in China - Both high volume and long-tail products - Food, cosmetics and health supplements Other - Orders must be shipped and traceable within 72 hours of - Orders must be shipped and traceable within 72 hours of - Orders must be shipped and traceable within 72 hours of order placement - Orders must be shipped and traceable within 72 hours of

×