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Deutsche Bank AG
Business models that have worked, those with ,challenges…and what’s nextApril 26 2013April 26, 2013
India Internet DayAlan Hellawell [email protected] (852) 2203 6240
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013
Table of contents
• How the world views the China & global Internet 2 • Models that have worked 10• Models that have worked… 10• …those with challenges 25• …and what’s next 32
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
1
24/04/2013 15:59:21 2010 DB Blue template
How the world views the China & globalHow the world views the China & global Internet
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
2
24/04/2013 15:59:21 2010 DB Blue template
A turbulent few years…
The MSCI World Internet Software & Services Index outperformed the S&P
y
Historic performance of tech IPOsp
Index by 19% since 2010. However, this is not the case in China…...
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
China internet sector derating
The S&P has outperformed the Nasdaq China Technology Index by 44% since Historic performance of tech IPOs
p q gy y2010. Holdings in the index include Tencent (8%), Baidu (8%), Sina (7.7%), Lenovo (5.4%), Sohu (4.7%), Qihoo360 (4.5%), NetEase (4.2%).
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
China IPO activity showing a real slowdown
Total deal count and IPO deal size in ChinaHistoric performance of tech IPOs
694
578
97.2
131.1116.1
100
120
140
800
1000
nnt
Total deal count and IPO deal size in China
247
409
578
461
101
47.459.4
23.7
20
40
60
80
200
400
600
US$
bill
ion
Deal
Cou
n
1010
20
02008 2009 2010 2011 2012 Till April 2013
Deal Count Value (US$ billion)
50
60
Number of tech IPOs
20
30
40
50
mber
of IPO
s on fi
le
19
0
10
2006 2007 2008 2009 2010 2011 2013
Num
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
Software issuers outperformed Internet & New Media issuersSoftware issuers outperformed Internet & New Media issuers
Tech sector breakdown of IPOsHistoric performance of tech IPOs
Tech sector breakdown of IPOs
Jan-Apr 2012 Jan-Apr 2013
US$m Number of deals US$m Number of dealsUS$ u be o dea s US$ u be o dea s
Software & Services 1,174.0 8 321.7 3
Internet & New Media 496.1 5 0.0 0
Hardware/Semis 131.1 1 0.0 0
Performance of tech IPOs since 2009 by sector(a)
Clean Tech 61.9 1 92.9 1
Other 161.9 2 851.6 3
Performance of tech IPOs since 2009 by sector(a)
41.2% 34 9%
80.1%45.4% 50.0%
60.0%
180)
16.7%
3.6%
33.3% 34.9%
(1.0%)
25.8% 28.2%
NA NA
21.2%
(10 0%)0.0%
10.0% 20.0% 30.0% 40.0%
e pe
rfprm
ance
(T+1
(1.0%)
(17.9%)
(31.6%)(40.0%)(30.0%)(20.0%)(10.0%)
Hardware/Semis Internet & New Media Software & Services
Ave
rage
N t ( ) i l d T h IPO i 2010 b US$50 D t f A il 2013
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Note: (a) includes Tech IPOs since 2010 above US$50m. Data as of April 2013.Source: Bloomberg and Dealogic
The venture side
Activity seems to be on the wane• VC’s invested $1.4 billion into 231 Internet-specific companies in 1Q 2013, down 11% in dollars and 5% lower in deals than 4Q 2012 when $1.5 billion went into 243 deals. Two of the top ten deals for the quarter were in the Internet specific categorywere in the Internet-specific category. • Deals in China-based companies in 2012 fell 40% to $3.7 billion from a year earlier (Dow Jones VentureSource.) There is a pipeline of around y ( ) p p800 companies still waiting to list their shares.• Why?
• Inability to exit portfolio companies because of difficult IPO conditions
• Concerns over “VIE”, alleged accounting fraud, evidence of slowing growth
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
4/24/2013
7
Source: Bloomberg
Client views on China internetSummary of investor views after two weeks in the US
Still generally cautiousSentiment still well off “Pre-Renren highs.”Continuing concerns over VIE, SEC/PCAOB pursuit of auditors
Inordinate focus on the largest players80% of meeting time spent on Baidu and TencentDramatic reduction in discussion of smaller cap names over past few years
Many questions on trajectory of digital ad spend recoveryMany questions on trajectory of digital ad spend recoveryHeavy focus on levels of competition in certain sub-sectors
SearchSearchE-commerce
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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Client views on China internet (cont.)( )
Extensive discussion around potential M&A transactionIntense focus on what mobile means to the big Chinese internet names
When will mobile contribute positively to Baidu?What is the monetization time-line of Weixin?How does mobile impact China e-commerce?
Questions about “going global” (eg – Tencent plans) Many questions around IPO pipeline
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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9
Models that have workedModels that have worked…
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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C2C: “Copy-to-China”py
Time of launch Number of users U.S. China Number of users Time of launch
Feb-04 Over 1b Facebook SNS Renren over 200m Dec-05
Jun-06 500m Twitter Microblogging Sina Weibo over 500m Aug-09
May 03 150m Linkedin Professional SNS Ushi com over 1m Feb 10May-03 150m Linkedin Professional SNS Ushi.com over 1m Feb-10
Feb-05 800m Youtube Online video Youku 300m Jun-06
Sep-98 Over 1b Google Search Baidu 500m Jan-00
Nov-08 41m Groupon Group buy Lashou 20m Mar-10
Sep-95 150m eBay E-commerce Taobao ~500m May-03
J l 04 100 Y l R i Di i 55 A 03Jul-04 100m Yelp Review Dianping.com 55m Apr-03
Jun-09 100m WhatsApp Mobile IM WeChat over 300m Jan-11
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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Source: Company data
Models that have worked…overtaking predecessorsg p
Some models resembled western peers onceSome models resembled western peers once upon a time, but have since vastly overtaken
those earlier modelsthose earlier models…
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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24/04/2013 15:59:21 2010 DB Blue template
The Vipshop example: Flash sales
Vipshop
p p p
Flash sale offers daily sales events selling a limited quantity of discounted products and services online for a limited period of time. Vipshop provides online flash sales for Chinese consumers, combining e-commerce and discount sales channels The company partners with leading brands by selling their excess inventory at discount prices Over 5,800 brands and over 250 merchandising staff
Product categories
SportswearCosmeticsApparel2,7592010 –2012 th b 6 7
Brand partner growth over time(1)
Accessories HandbagsFootwear
411
1,075
2,759 growth by 6.7x
TravelHome goodsChildren411
2010 2011 2012
S C d t
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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13
Source: Company dataNote: Number of brand partners is a cumulative number since 2009, which includes primarily brand owners, and to a lesser extent, brand distributors and resellers.
O t ki th t d lOvertaking the western model
Broader addressable market in China
China U.S.
Broader universe of popular brands for mass market
Marketpositioning
Mostly focused on high-end and luxury markets
Discount / outlet retail channels saturated for mass market
merchandise
Lack of well-developed discount / outlet retail channel
Competition from offline channel
Well established online presence and capabilities
Largely rely on third party platforms to build online presence
Brands’ own online presence
Limited upfront depositMost products can be returned to
suppliers
Need to pay for inventory upfrontProducts can not be returned to
suppliers
Working capital requirement
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 131424/04/2013 15:59:21 2010 DB Blue template
14
…Vipshop: now so much more than its peersp p p
Both revenues and orders grew more than 200% YoY in 2012
Luxury goods account for only 10% of sales. Others are mostly mid to high end goods.
Net revenues(US$ in millions)
Total orders (in thousands)
21,919 191.2%
629.1
204.7%
201.5%
299.6
184.8%
7,269
3,005
8,752 684.1%
32 6
227.1
105.2
597.1%
927
2010 2011 2012 4Q11 4Q12
32.6
2010 2011 2012 4Q11 4Q12
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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15
Source: Company data
Underestimating the strength of a business model: g gVipshop
Vipshop has outperformed the Nasdaq Composite Index by 335% since March 22, 2012 (Vipshop IPO date)
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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16
Source: Bloomberg
A re-rating against peers
What we learned
g g p
What we learned• We were clearly too focused on Vipshop’s western peers
• Their exact business models• Their exact business models• Their inherent limitations
• We underestimated several factors• We underestimated several factors• The power of e-commerce to leapfrog China’s otherwise poorly
developed offline discounting infrastructuredeveloped offline discounting infrastructure• Unique cultural attributes of the market
• The sheer power of viral marketing, word-of-mouth, etc.p g, ,• Bargain hunting as an “achievement.”
M k t C /R t tiMarket Cap/Revenues at time of Vipshop IPO (3/22/2012)
Current Market Cap/Revenues Performance since 3/22/2012
Vipshop 1.3 2.4 78%Amazon 1.6 2.0 22%
eBay 3.3 4.7 40%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
4/24/2013
17
Source: Bloomberg
YY.com: uniquely Chinese…q y
Th i l i f i f b iThere is also a growing profusion of business models emerging with no predecessors and no
counterparts.
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
YY.com: uniquely Chinese (cont)q y ( )
YY is a rich communication social platform that connects Internet users through real-time interaction in massive scale
Rich communication includes real-time transmission of voice, video and text
Core product YY client, a PC-based software, is capable of hosting 1.4m t h t ith h th i li h l t th tiusers to chat with each other in one online channel at the same time.
12.7m channels were created on YY’s platform as of Sep 30, 2012
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Source: Company data
YY.com: uniquely Chineseq y
User-created and user-defined online channels can be used to host various online activities (i.e. in-game communication, live music show broadcasting, l di d i id f ll )long distance education, video conference calls, etc.)
Monetization is a combination of ads-based and virtual item-based revenue modelsmodels
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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24/04/2013 15:59:21 2010 DB Blue template
Source: Company data
YY: “Largest Real-time Social Platform in China”g
Viral Growth Scale Stickiness401 million
Viral Growth Scale Stickiness
total registered user (“TRU”) accounts (1),(2) 52 hours
70 millionper active user (5)
>10x
monthly active users (“MAU”) (3)
84 %
10 million
84 %market share (6)
Dec 2009 TRU (2)
Sep 2012 TRUs (2) peak concurrent
users (“PCU”) (4)
TRUs (2):37 million
(2):401 million
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013 21
Source: Company data
Coming to appreciate unique business models: YY.comg pp q
YY h f d h N d C i I d b 48% i N 20 2012YY has outperformed the Nasdaq Composite Index by 48% since Nov 20, 2012 (YY IPO date)
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
Up-and-coming internet: DB’s June internet tourp g
Private companies to be featured on our 2013 tour:
• Next generation on-line tour package t
Private companies to be featured on our 2013 tour:
• Mobile advertising networkoperator• Online classified information platform• Online payments company covering
• E-commerce lead generation platform• Mobile commerce platform
Child ’ b it• Online payments company – covering both B2C and B2B markets• Mobile and social games developers
• Children’s website• Cloud services company• Next generation LBAS based local
• Mobile app distribution platforms• Distance learning
• Next generation LBAS-based local lifestyle search and group buying platform
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
4/24/2013 2010 DB Blue template
23
those with challenges…those with challenges
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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Too much of a good thing going bad: China’s Group-buyingg g g g p y g
According to Tuan800, the number of group buy sites in China peaked in September 2011 at 5,058, then continued to drop sequentially since then. As of November 2012 there were 2 857 group buy sites in China down 56% comparedNovember 2012, there were 2,857 group buy sites in China, down 56% compared to September 2011.
2000
2500
5000
6000RMBmThe No. of group buy sites peaked at
5,058 in September, 201158tuan, 1.4%Qianpin, 1.6% Others,
4.3%
Top 10 players as of Dec 2012
1000
1500
2000
3000
4000Dianping,
16.4%Dida, 1.7%
Gaopeng, 3.7%
N i 12 2%
55tuan, 12.6%
0
500
0
1000
2000
11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 12 12 12 12
Lashou, 11.3%
Manzuo, 1.8%
Meituan, 32.8%
Nuomi, 12.2%
Feb-
Mar
-
Apr
-
May
-
Jun- Jul-
Aug
-
Sep-
Oct
-
Nov
-
Dec
-
Jan-
Feb-
Mar
-
Apr
-
May
-
Jun- Jul-
Aug
-
Sep-
Oct
-
Nov
-
Dec
-
Number of group buy sites Total GMV (RMBm)
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013 25
Source: Deutsche Bank, Tuan800
Internet stocks with challenged business modelsg
60
70
80USD
Youku Tudou
10
12
14USD
Shanda Games
10
20
30
40
50
2
4
6
8
10
0
Youku Tudou
USD M L USD Ji
0
2
Shanda Games
60
80
100USD Mecox Lane
8
10
12
14
16USD Jiayuan.com
0
20
40
0
2
4
6
8
Youku Tudou Jiayuan.com Mecox Lane Shanda Games
Mecox Lane Jiayuan.com
Price changes (As of 19 April)ou u udou J ayua .co eco a e S a da Ga es
YOKU.N DATE.OQ MECO.OQ GAME.OQ
From IPO price -48.5% -51.5% -93.4% -74.5%
From highest price -74.4% -66.5% -93.4% -76.6%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
From highest price 74.4% 66.5% 93.4% 76.6%Source: Bloomberg
Challenged business models: Youku Tudoug
Yo k T do80
USDYouku Tudou
• Youku Tudou• Youtube-like Online video company. • The merger of two major platforms, Youku
and Tudou both being leading online50
60
70
and Tudou, both being leading online video sites in China. Revenues largely ads-based
• Primary reasons20
30
40
y• Lack of awareness of commoditization of
video industry • Lack of barriers to entry for those with
0
10
12/8
/201
0
1/8/
2011
2/8/
2011
3/8/
2011
4/8/
2011
5/8/
2011
6/8/
2011
7/8/
2011
8/8/
2011
9/8/
2011
10/8
/201
1
11/8
/201
1
12/8
/201
1
1/8/
2012
2/8/
2012
3/8/
2012
4/8/
2012
5/8/
2012
6/8/
2012
7/8/
2012
8/8/
2012
9/8/
2012
10/8
/201
2
11/8
/201
2
12/8
/201
2
1/8/
2013
2/8/
2013
3/8/
2013
4/8/
2013
captive traffic and strong balance sheets• Continued “arms race” in content
procurement
Youku Tudou
Price changes (As of 19 April)Youku Tudou
YOKU.N
From IPO price 48 5%From IPO price -48.5%
From highest price -74.4%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
Challenged business models: Jiayuang y
Jia an com16
USDJiayuan.com
• Jiayuan.com• Online dating platform offering information
on single adults seeking long-term relationships/marriage.10
12
14
p g• Generating revenue primarily from online
services (fee-based VAS) and offline events/VIP services4
6
8
• Primary reasons• User churn (unable to generate long-term
user loyalty due to relationship/marriage orientation) thus incurring recurring
0
2
5/11
/201
1
6/11
/201
1
7/11
/201
1
8/11
/201
1
9/11
/201
1
10/1
1/20
11
11/1
1/20
11
12/1
1/20
11
1/11
/201
2
2/11
/201
2
3/11
/201
2
4/11
/201
2
5/11
/201
2
6/11
/201
2
7/11
/201
2
8/11
/201
2
9/11
/201
2
10/1
1/20
12
11/1
1/20
12
12/1
1/20
12
1/11
/201
3
2/11
/201
3
3/11
/201
3
4/11
/201
3
orientation), thus incurring recurring marketing expenses
• Increasing competition from other marriage-oriented online dating platforms
1 1 1 1 1 1Jiayuan.com
e.g. Baihe.com and Zhenai.com.• Advent of “free” dating platforms.• Impact from general social-oriented
l tf ( W ib d W i i ) hi h
Price changes (As of 19 April)Jiayuan.com
DATE.OQ
From IPO price 51 5% platforms (e.g.Weibo and Weixin), which are usually free and associated with higher user stickiness.
From IPO price -51.5%
From highest price -66.5%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
Challenged business models: Mecox Laneg
Meco Lane100
USDMecox Lane
• Mecox Lane• E-commerce site with a specific focus on
apparel.
• Primary reasons60
70
80
90
• Primary reasons• E-commerce market in China currently still
involves significant investment• Unfavorable competitive environment20
30
40
50
• Unfavorable competitive environment within China’s e-commerce space.
• Unclear market positioning, deployment of offline stores on large scale
0
10
• Large e-commerce platforms building formidable scale which threaten the survival of small e-commerce players.
• Lack of unique business model or product
Mecox Lane
• Lack of unique business model or product categories compared to e-commerce giantsPrice changes (As of 19 April)
Mecox Lane
MECO.OQ
From IPO price 93 4%From IPO price -93.4%
From highest price -93.4%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
Challenged business models: Shanda Gamesg
Shanda Games14
USDShanda Games
• Shanda Games• Chinese online gaming company
• Primary reasons8
10
12
• Intensifying competition among major game operators due to a growth slowdown in the overall online gaming market
• Turbulence in company management and2
4
6
• Turbulence in company management and structure
• Advent in rapid succession of new games models: social games, web games, mobile
0
2
9/25
/200
9
11/2
5/20
09
1/25
/201
0
3/25
/201
0
5/25
/201
0
7/25
/201
0
9/25
/201
0
11/2
5/20
10
1/25
/201
1
3/25
/201
1
5/25
/201
1
7/25
/201
1
9/25
/201
1
11/2
5/20
11
1/25
/201
2
3/25
/201
2
5/25
/201
2
7/25
/201
2
9/25
/201
2
11/2
5/20
12
1/25
/201
3
3/25
/201
3
games• Excessive expansion across multiple
fields, however, with no core business.• Lack of unique features compared to other
1 1 1 1
Shanda Games
• Lack of unique features compared to other online gaming giants
Price changes (As of 19 April)Shanda Games
GAME.OQ
From IPO price 74 5%From IPO price -74.5%
From highest price -76.6%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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24/04/2013 15:59:21 2010 DB Blue template
Source: Bloomberg
and what’s next…and what s next
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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24/04/2013 15:59:21 2010 DB Blue template
What’s next: China e-commerce
CECRC releases 2012 China e-commerce reportCECRC releases 2012 China e-commerce reportThere were roughly 24,875 e-commerce-related enterprises (including B2C, C2C and other types) in China as of 2012, up ~20% YoY. CECRC identified roughly 45 e-commerce investments in 2012, including 1) Belle investing USD200m inCECRC identified roughly 45 e commerce investments in 2012, including 1) Belle investing USD200m in shoe-focused B2C, 2) 360Buy obtaining USD400m in funding, etc.
B2C e-commerce In terms of transactions, Taobao remained No. 1, with a 52% market share, followed by 360Buy (22%), y y ( )Suning Yigou (3.6%), Tencent’s B2C (3.3%), Vancl (2.7%), Amazon China (2.3%).
The mobile commerce marketMobile commerce transaction volumes in China reached RMB96.5b in 2012, up 135% YoY. CECRC expects it to reach RMB130b (up 35% YoY) in 2013. The mobile commerce population reached 250m in 2012, up 67% YoY. Likely to reach 373m by 2013.
LogisticsThe courier industry had seen a CAGR of 27% in the past five years in terms of revenue. Roughly 50% of the revenues that couriers earned last year came from e-commerce.Self owned and operated logistics has become an important feature. E.g. 360Buy on average processes 800K orders per day 80% of them being distributed through its own logistics infrastructure800K orders per day, 80% of them being distributed through its own logistics infrastructure.
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013 32
The China e-commerce marketE-commerce market trading value reached RMB2.4tn in 4Q12, up 27.5% YoY. A f 4Q12 t t l B2B f SME h d RMB
The China e commerce marketE-commerce gross merchandise value
40%3 00As of 4Q12, total B2B revenue from SMEs reached RMB 4.45bn. Largest player took 40.7% of the B2B market, followed by Global Sources with 8.7% market share.As of 4Q12, Taobao accounted 95% of China C2C and
35.0%33.6% 34.2%
28.1% 26.3% 25.0%
22.6%
27.5%
20%
25%
30%
35%
40%
1 50
2.00
2.50
3.00
T-Mall represented 57% of the China B2C market. As of 4Q12, 360Buy took a 49% share in the independently-operated B2C market, followed by Suning (13.6%) and Amazon.cn (6.8%).
1.38
1.5
1.631.82 1.75 1.88 2.00
2.40
0%
5%
10%
15%
20%
0 00
0.50
1.00
1.50
0%0.001Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
e-commerce market GMV (RMBt) YoY
4Q12 China B2B market share 4Q12 China B2C market share 4Q12 China C2C market share
Paipai5.46%
eachnet0.01%
AlibabaSuning 5.5%
others13.5%
Alibaba.com
40.7%Other41.7%
Tmall56.7%
Tencent B2C4.7%
Taobao94.53%
Global Sources
8.7%mysteel
5.6%
hc360.com
3.3%
360buy19.6%
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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Source: Deutsche Bank, iResearch
Thank you!Thank you!
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
April 13
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Appendix 1ppImportant DisclosuresAdditional information available upon request
For disclosures pertaining to recommendations or estimates made on a security mentioned in this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr.
Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Alan Hellawell III.
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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Equity Rating Key Equity Rating Dispersion and Banking
Buy: Based on a current 12-month view of total shareholder return (TSR = percentage change in share price from current price to projected target price plus projected dividend yield), we recommend that investors buy the stock.
Relationships
y
Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the stock.
Hold: We take a neutral view on the stock 12 months out and, based on this time horizon, do not recommend either a Buy or Sell.
55 %
38 %
200250300350400450
Notes:
1. Newly issued research recommendations and target prices always supersede previously published research.
2. Ratings definitions prior to 27 January, 2007 were:
7 %17 % 16 % 12 %0
50100150
Buy Hold Sell
Buy: Expected total return (including dividends) of 10% or moreover a 12-month period
Hold: Expected total return (including dividends) between -10%and 10% over a 12-month period
Asia-Pacific Universe
Companies Covered Cos. w/ Banking Relationship
Sell: Expected total return (including dividends) of -10% orworse over a 12-month period
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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Regulatory Disclosures
1. Important Additional Conflict Disclosures
Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the “Disclosures Lookup” and “Legal” tabs. Investors are strongly encouraged to review this information before investing.
2. Short-Term Trade Ideas
Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank’s existing longer term ratings. These trade ideas can be found at the SOLAR link at http://gm.db.com.
3. Country-Specific Disclosures
Australia and New Zealand : This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act , y , y g pand New Zealand Financial Advisors Act respectively.
Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation to Deutsche Bank. The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions of Deutsche Bank. In cases where at least one Brazil based analyst (identified by a phone number starting with +55 country code) has taken part in the preparation of this research report, the Brazil based analyst whose name appears first assumes primary responsibility for its content from a Brazilian regulatory perspective and for its compliance with CVM Instruction # 483.and for its compliance with CVM Instruction # 483.
EU countries: Disclosures relating to our obligations under MiFiD can be found at http://globalmarkets.db.com/riskdisclosures.
Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as a financial instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, Type II Financial Instruments Firms Association, The Financial Futures Association of Japan, Japan Investment Advisers Association. Commissions and risks involved in stock transactions - for stock transactions we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer Stocktransactions, we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer. Stock transactions can lead to losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional losses stemming from foreign exchange fluctuations. "Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan unless “Japan” or "Nippon" is specifically designated in the name of the entity.
Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiring a license in the Russian Federation.
Deutsche Bank Alan Hellawell , [email protected], (852) 2203 6240, April 2013
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Global DisclaimerThe information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively "Deutsche Bank"). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable. DeutscheBank makes no representation as to the accuracy or completeness of such information.Deutsche Bank may engage in securities transactions, on a proprietary basis or otherwise, in a manner inconsistent with the view taken in this research report. In addition, others within Deutsche Bank, including strategists and sales staff, may take a view that isinconsistent with that taken in this research report.Opinions, estimates and projections in this report constitute the current judgement of the author as of the date of this report. They do not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no obligationto update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices and availability of financial instruments are subject to changewithout notice This report is provided for informational purposes only It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy Target prices are inherently imprecise and a product of thewithout notice. This report is provided for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. Target prices are inherently imprecise and a product of theanalyst judgement.As a result of Deutsche Bank’s March 2010 acquisition of BHF-Bank AG, a security may be covered by more than one analyst within the Deutsche Bank group. Each of these analysts may use differing methodologies to value the security; as a result, therecommendations may differ and the price targets and estimates of each may vary widely.In August 2009, Deutsche Bank instituted a new policy whereby analysts may choose not to set or maintain a target price of certain issuers under coverage with a Hold rating. In particular, this will typically occur for "Hold" rated stocks having a market capsmaller than most other companies in its sector or region. We believe that such policy will allow us to make best use of our resources. Please visit our website at http://gm.db.com to determine the target price of any stock.The financial instruments discussed in this report may not be suitable for all investors and investors must make their own informed investment decisions. Stock transactions can lead to losses as a result of price fluctuations and other factors. If a financialinstrument is denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily indicative of future results. 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In the United Kingdom this report is approved and/or communicated by Deutsche Bank AG London, a member of theLondon Stock Exchange and regulated by the Financial Services Authority for the conduct of investment business in the UK and authorized by the BaFin. This report is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in Korea by DeutscheSecurities Korea Co. This report is distributed in Singapore by Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch, and recipients in Singapore of this report are to contact Deutsche Bank AG, Singapore Branch orDeutsche Securities Asia Limited, Singapore Branch in respect of any matters arising from, or in connection with, this report. Where this report is issued or promulgated in Singapore to a person who is not an accredited investor, expert investor or institutionalinvestor (as defined in the applicable Singapore laws and regulations), Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch accepts legal responsibility to such person for the contents of this report. In Japan this report isapproved and/or distributed by Deutsche Securities Inc. The information contained in this report does not constitute the provision of investment advice. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to anyfinancial product referred to in this report and consider the PDS before making any decision about whether to acquire the product. Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register Number in South Africa:1998/003298/10). Additional information relative to securities, other financial products or issuers discussed in this report is available upon request. This report may not be reproduced, distributed or published by any person for any purpose without DeutscheBank's prior written consent. Please cite source when quoting.
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