This is a dive into Search Marketing for Fashion brands in China.

1. Fast Fashion
Approaching China

2. Who are Baidu;
Baidu are China’s largest search engine,
and the 5th largest website in the world.
Through their various properties they touch
100% of China’s online population monthly
We are an international partner to Baidu,
working with international brands to
increase their presence in China through
Baidu’s various marketing channels
Who are we;

3. An Overview of China
The Economy, the Internet and Consumers

4. China’s Market Position
The middle classes are expanding beyond the largest cities more rapidly & in greater numbers than any market
has ever witnessed. The number of Middle and Affluent Consumer HOUSEHOLDS in China will be the same as
the US by 2020
1
13
34
61
57
36
12
53
69
66
39
23
Household annual disposable income
(USD) thousands
Upper affluent >200
Lower affluent $16 - $31.5
Middle Class $9.5 - $16
Emerging Middle $6 - $9.5
Aspirant $4 - $6
Poor <$4
Households MillionsHouseholds Millions
Source BGS Consultants
Urban household disposable income 2020Urban household disposable income 2010

5. MACMiddle &
Affluent
Consumers
isMAC Households in China
2005 = 11,000,000
2011 = 50,000,000
2020 = 140,000,000*
*That’s around the same number, if not more as this
classification in the USA
Source BCG

6. China’s Online Population
China already has the largest online population in the world at 618 million users.
Astonishingly that’s only 46% of their population, so their capacity for growth is
enormous
0
100
200
300
400
500
600
700
China USA India Japan Brazil UK Australia
618
245
121
101
79
53
20
46
79
10.2
80
39
84 89
Online Population MMs
% of Population online
Source: China Internet Network Information Center

7. China’s Online Population
Interesting Comparison Of China’s Online Population
China
USAUKAustralia
= 50 million online users
Source: China Internet Network Information Center

8. • As of end 2013, there were 618 million internet users in China
– the world’s biggest internet user population. The internet
penetration rate has now reached 45.7%.
• There are slightly more male internet users in China (55.9%)
than female (44.1%).
• While nearly three quarters (73.4%) of China’s internet users
are going online via their PCs, more than two thirds (69.3%)
also do so from their mobile devices.
• China’s students represent 30.2% of China’s online population.
• The rural areas of China account for 26.5% of the total internet
population, or 156 million internet users.
• China’s online community is expected to exceed 700 million by
2016.
• As a guide, in recent years, China’s internet population has
grown by approximately 10 million people monthly (equivalent
to half the population of Australia).
China’s Digital Demographics
China’s Digital Credentials
1,351,000,000
51% Urban
Total Population
Urban vs. Rural
618,000,000
45.7%
Internet Users
Internet Penetration
1,198,500
88.7%
Mobile Subscribers
Mobile Penetration
798,200,000
59.1%
Tencent QQ Users
Social Network Penetration
Source: US Census, CNNIC, Tencent, Mobithinking

9. China’s Online User Behavior
Activities Online
9
Source: Nielsen, GlobalWebIndex Wave 6
Search Engines
80%
Watched Video
72%
Listened to Music
77%
Instant Messenger
67%
Uploaded Photos
60%
Activities Performed Online % of Users
REVIEWED A PRODUCT OR BRAND ONLINE 74.58
USED WEBMAIL 74.08
WATCHED A VIDEO CLIP 71.64
USED INTERNET BANKING 71.29
PURCHASED A PRODUCT ONLINE 70.79
USED INSTANT MESSENGER 67.2
UPLOADED PHOTOS ONLINE 60.47
USED ONLINE OFFICE APPLICATIONS 59.62
POST COMMENT ON FORUM / BBS 55.63
MANAGE YOUR SOCIAL NETWORK PROFILE 54.04
LEFT A COMMENT ON A STORY ON A WEBSITE 53.39
USED A MICRO BLOGGING SERVICE 52.04
BGHT PROD/SERV THROUGH GROUP BUYING
SITE 49.55

10. China’s E-commerce
What Drives Consumers Activity
Source: GlobalWebIndex Wave 6, Bain, CNNIC
• China surpassed the USA as the largest
e-commerce market globally in 2013 at a
market size of USD $265 billion.
• Analysts estimate the Chinese market to
be worth CNY 3.3 trillion (USD $540
billion) by 2015.
• E-commerce growth was driven largely
by mobile: 40.7% of online shoppers
used a mobile device to browse e-
commerce merchandise.
• 53.6% browsed a merchandiser’s mobile
app instead of accessing its main web
site through their device’s internet
browser.
• In Tier 4 cities the average shopper
spends 27% of disposable income
through e-tail
What Chinese Users Buy Online % of Users
CLOTHES 51.69
SHOES 40.98
BOOKS 33
A GIFT FOR SOMEONE 23.18
MOBILE PHONE 22.03
PERSONAL ITEMS; WATCHES / HANDBAGS, ETC 21.68
BEER 21.44
FILMS 18.25
TRAVEL E.G. PLANE TICKETS / HOTEL 16.15
BROADBAND / HI-SPEED INTERNET 13.91
HEALTHCARE AND PHARMACEUTICAL
PRODUCTS 13.56
WINE / SPIRITS 12.71
HOLIDAY (IN MY OWN COUNTRY) 12.66
MUSIC 12.46
FINANCIAL PRODUCT E.G. INSURANCE 9.27
NONE OF THE ABOVE 8.23
DESKTOP COMPUTER 7.53
FURNITURE / HOME EQUIPMENT 7.03
LAPTOP (BIGGER THAN 10” SCREEN) 5.98

11. Fashion Takes a Larger Share of Wallet
Compared to other markets, Apparel is a market leader for spend
Source; McKinsey

12. China’s market size in perspective;
A 24 hour Singles day sales event on 11th
November 2013 saw USD $5.75 billion of
sales over Alibaba’s two market leading e-
commerce platforms.
Compare this amount with Black Friday in
the US, which netted only USD $1.46 billion

13. So, a huge market, with incredible
growth still to come. Connected
consumers, with growing disposable
income and a high propensity to transact
online, in fashion…
…What next.

14. THE BASICS STILL
REPRESENT THE
BIGGEST SINGLE
OPPORTUNITY

15. VS.

16. Or, even better…

17. E-wallets (provided by marketplaces e.g. AliPay
& TenPay) and COD are the preferred payment
methods across e-commerce.
The Credit Card network of choice is China
UnionPay with over 300 million credit cards in
circulation inside China. Over 3bn Globally

18. Local customer service is a must when selling in
China.
The simple ability for staff to communicate with
customers will differentiate your offering and
make your products seem more accessible.

19. Be mobile ready. Last year around
1,670,000,000
payments were made via mobile phones.
Totaling a value of US$1.6trillion

20. Consider Working with a Marketplace as well as
Your Own Site
They are Dominant
Source; McKinsey

21. Understand your local positioning;
Colin Currie, MD of Adidas in China recently
stated that unlike other markets, Adidas in
China is more of a lifestyle brand, so his
competitors are more like H&M and Zara as
opposed to traditional sports brands

22. Understanding Advertising on Baidu

23. Gucci – Paid Search Result

24. Gucci - BrandZone

25. Gucci – Baidu Knowledge

26. Gucci – Image Zone

27. Gucci – Baidu Wiki

28. Gucci – Baidu Video Search

29. Contact Details
We hope you enjoyed our presentation and we look forward to hearing from you.
Grant McCarthy
Executive Director
Email: grant.m@baiduint.com
Questions?
That was a lot of info, and we have a
lot more. For these slides or more
information please email;
info@baiduint.com