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China Market Entry through eCommerce

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What you need to know on entering the Chinese market through eCommerce. Presented at the China Digital Marketing & Social Media Submit 2013 in Sydney, Australia.

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China Market Entry through eCommerce

  1. 1. China market entry through eCommerce Charles Chan, Managing Director of CLEARgo The China Digital & Social Media Submit, Sydney - October 2013
  2. 2. By now you have heard the headline $539 Billion Online Expenditure in China by 2015 from $212 Billion in 2013
  3. 3. Key Challenges in China market entry Soaring Rent & Distribution Channel Cost
  4. 4. 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)
  5. 5. Since the melamine milk scandal in 2008, various product safety reports have destroyed consumers’ confidence in domestic products and drive online cross border purchase.
  6. 6. Determine if your Brand is Suitable to Sell Online in China
  7. 7. Determine if your Brand is Suitable to Sell Online in China
  8. 8. You know why & what, But HOW?
  9. 9. Key Ingredients to Successful China Entry through eCommerce 1 Develop a China Consumer Strategy 2 Decide on the Right e-Channels 3 Setup a suitable Operations & Organizational Model 4 Build Traffic, Optimize Conversions, Acquire & Grow Customers
  10. 10. 1 Demographic of Chinese consumers is diverse Competition is fierce in most categories What’s your Brand’s STP in China? (Segmentation, Targeting & Positioning)
  11. 11. 2. Deciding on the Right e-Channel Different eCommerce Channel Models in China brand.com mall-operate branded store brand-operate marketplace store authorized online distribution
  12. 12. 2. Deciding on the Right e-Channel In China, eCommerce has been marketplace driven
  13. 13. 2. Deciding on the Right e-Channel Tmall and the rest
  14. 14. 2. Deciding on the Right e-Channel Horizontal and Vertical eCommerce Platforms Horizontal Platforms Luxury Cosmetics Consumer Electronics Media Grocery Private Selling Fashion
  15. 15. 2. Deciding on the Right e-Channel UGG sells in both brand website and Tmall
  16. 16. 2. Deciding on the Right e-Channel Coach closed its online flagship store in Tmall only one month after it opened, and shifted to sell in its brand site instead
  17. 17. 2. Deciding on the Right e-Channel Olay sells in almost all platforms
  18. 18. 2. Deciding on the Right e-Channel The luxury divide on brand site and marketplaces Brand Site Official eCommerce presence No Official eCommerce presence
  19. 19. 2. Deciding on the Right e-Channel So which channel is right for you? Brand.com Brand Image Control Demand Capturing CRM/Loyalty Integration Data Ownership Setup & Operating Cost Operations Complexity Brand Operate Store @ Mall Mall Operate Store @ Mall Distribution Only
  20. 20. 2. Deciding on the Right e-Channel Wait! Do you have a Chinese entity already? Have you registered and trademarked your brand already?
  21. 21. 2. Deciding on the Right e-Channel Tmall now allows foreign brands to setup without local entities and sell to Chinese consumers as cross border transactions
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  23. 23. 3. Setup a suitable Operations & Organizational Model Payment methods in China Alipay, China UnionPay, Direct Debit, etc Most people don’t have credit card and are unable to pay non-RMB transactions
  24. 24. 3. Setup a suitable Operations & Organizational Model “Fapiao” – not just an official invoice This is how local Government keeps track of your Value Added Tax (VAT)
  25. 25. 3. Setup a suitable Operations & Organizational Model Customer Service – Live Chat Hotline & Live Chat for both Pre-Sales & Post-Sales is a must in China AliWangWang is the standard Live Chat platform for Tmall & Taobao
  26. 26. 3. Setup a suitable Operations & Organizational Model Warehousing, Fulfillment & Delivery A range of domestic and international providers Service quality from domestic providers still varies but improving Amazon Fulfillment Service
  27. 27. 3. Setup a suitable Operations & Organizational Model In-house vs. Outsource Outsource some or all aspects of the puzzle Merchandising & Inventory Mgmt Customer Care Store Management Marketing & CRM Order & Fulfillment Management eCommerce Technology
  28. 28. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers Grow your eCommerce business under the Chinese ecosystem Acquisition Conversion Retention Measurement & Optimization Amplification
  29. 29. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers Grow your eCommerce business under the Chinese ecosystem E-DM Directory Search (SEM/SEO) Display Ads Brand.com CSE Product Search Affiliate Marketing Social Media
  30. 30. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers Tmall & Taobao have its completely separate ecosystem 聚划算 Group 淘宝客 直通车 Buying PPC CPS Search 钻石展位 站内活动 PPC Display Event Tmall 淘金币 淘帮派 Points Community 微淘 Social Shopping 一淘 CSE
  31. 31. 4. Build Traffic, Optimize Conversions, Acquire & Grow Customers The Single’s Day 11.11 has become the Black Friday of China Brands now get to prepare for this day months ahead US$3 Billion Sold at Taobao & Tmall in 24 hours on 2012 Single’s Day
  32. 32. How Chinese sellers are preparing for 11.11
  33. 33. Summary in China Market Entry through eCommerce 1 Develop a China Consumer Strategy 2 Decide on the Right e-Channels 3 Setup a suitable Operations & Organizational Model 4 Build Traffic, Optimize Conversions, Acquire & Grow Customers
  34. 34. About CLEARgo CLEARgo is a Brand eCommerce Agency in HK & China We help brands to grow in the China market through eCommerce PLAN E-Business Strategy BUILD Online Branding, User Experience & Technology GROW Performance Marketing, CRM & Conversion Optimization
  35. 35. THANK YOU for your time & attention For more information, please contact: Charles Chan charles@cleargo.com +852 9470 6088 http://www.cleargo.com

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