January 2013 An Introduction to Yihaodian. Ecommerce in China Yihaodian establishes its presence in the market Yihaodian’s core competitive advantages

January 2013

An Introduction to Yihaodian

Ecommerce in China

Yihaodian establishes its presence in the market

Yihaodian’s core competitive advantages

Yihaodian’s plan for continued growth

Today’s Discussion

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Ecommerce in China




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Source: China online shopping industry annual monitoring report 2011-2012 and China Internet Network Information Center 2012

2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e0

100

200

300

400

500

600

700

137

210

298

384

457

513538

563590

618

Chinese internet use is growing rapidly with usage predicted to exceed 600 million by 2015

Number of internet users in China(unit in millions)



2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e0

50

100

150

200

250

300

350

400

3446

74

108

161

187

228

269

314

363

In 2011, 36% of online users were also shopping. That penetration rate is expected to reach 60% by 2015.

Number of online shoppers in China(unit in millions)



2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e0

5,000

10,000

15,000

20,000

25,000

30,000

258 5421,208

2,500

5,231

7,566

11,840

15,690

20,120

25,510

2011 2012e 2013e 2014e 2015e 2016e 2017e0%

20%

40%

60%

80%

100%

24%30% 34% 38% 41% 44% 46%

77%70% 66% 62% 59% 56% 54%

B2C 市场份额 C2C 市场份额

The ecommerce market is predicted to grow 100 times by 2015 and the B2C market will eventually become the primary market.

Ecommerce Revenues in China(unit in millions)

B2C versus C2C Ecommerce Revenues in China


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Ecommerce in China





YHD was founded in July 2008 with the aim to create an online supermarket that provides customers with a variety of quality products at low prices and an excellent customer experience. It has currently sells hundreds of thousands of products, covering eight product lines including Food & Beverage, Imported Food, Personal care, Mother & Baby, Cleaning products, Digital electronics, Home goods, Clothing and Nutrition & Health Care. It has over 30 millions registered users, and was awarded the

fastest growing integrated e-commerce company

in China.

Yihaodian’s history

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1 号店大事记Yihaodian was founded in July 2008, creating the first Chinese online supermarket.

In July 2009, Yihaodianreached its 1st Anniversary with 1,000 orders in a single day.

In 2010, Yihaodian ran its 1st vendor conference and reached 48M RMB insales.

In 2011, Yihaodian established astrategic partnership with Walmart, the biggest retailer in the world.

In 2012, Yihaodian becameone of the largest e-commerce companies in Shanghaiand shifted its attentiontoward nationwide growth.

In 2013 Yihaodian focuses on continued innovation and national growth.

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2008 2009 2010 2011 Now

100 200

1400

4800

6400# of Employees

2008 2009 2010 2011 Now

10 1,0004,000

15,000

30,000

Registered customers Unit: 1,000 people

2008 2009 2010 2011 Now

3,000 30,00050,000

180,000

300 ， 000# of SKUs

2008 2009 2010 2011

417 4,600

80,500

2,740,000Annual salesUnit: ¥1,000

Yihaodian has grown quickly in its four years of existence

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2,740,000

Every month, 15M

members view YHD website

5 millionunique visitors

a day

Everyday, more and

more members join

Yihaodian

30 millionregistered

users

alexa月平均排名

100

1.5 亿浏览会员

人均页面浏览12.2

3000 万注册会员

A quick glance at Yihaodian’s key metrics

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Pine, this number relative the daily unique visitors seems strange ↓

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We work hard to meet customer

demands through every aspect of our

business

Low prices3%-5% lower than traditional retailers

Price bargaining power

Product variety Food, drink, clothing, per-

sonal care, electronics

Fast deliveryThree delivery times per day

Including night deliveryPhone numbers of delivery personnel provided to

customer

Easy shoppingGuarantee qualityCash on delivery

Good customer service

YHD, meets customers’ demand

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Product development Marketing Distribution Sales Services

• Track customer buying behavior and preferences

• Conduct user trials and analyze feedback

• Targeted segmentation

• Remarketing

• Purchase recommendations

• Joint promotions

• Online brand equity development

• Simplify distribution network

• Shared warehouse and delivery network

• Better suited e-commerce packaging

• Up-selling

• Cross-selling

• SKU diversification and customized selection

• New customer acquisition strategies

• Joint sales campaigns

• Customer insight gathering

• Post sales surveys

• Joint effort to reduce product defects

Yihaodian works partners with suppliers to drive sales

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Ecommerce in China





Receiving Parcels Customer Service

Cus

tom

er

expe

rienc

e

Shopping

Vender management

Purchase management

Product management

Price management

Warehouse management

Website system

Customer service system

•Supplier certification•Quality testing•Business review•Expense settlement

•Automatic stock replenishment•Automatic ordering•End-to-end inventory management

•End-to-end category management•Expiration date management

•Pricing intelligence management•Price recognition management•Price comparison management

•RF operation•Picking route optimization•Shelf placement strategy•Popular product placement opimization

•PC, Mobile APP technology support•Intelligent search•Customized homepage•Personalized recommendation

•Real-time monitoring of all customer service cues•Customer complaint management

Our technology system consists of over 124 software patents and more than 1000 IT professionals on staff


38.00%

22.30%

20.80%

8.60%5.30%

4.70%

Age

25-30 岁19-24 岁31-35 岁36-40 岁41-45 岁46 岁及以上

55.70%

11.10%

10.60%

7.10%

5.10%

4.70%

2.10%

Occupation

公司员工学生事业单位员工企事业管理者自有职业、待业家庭主妇、退休人员个体经营者

无收入

2000 元以下

2000-3000 元

3000-5000 元

5000 元以上

9.4%

1.9%

17.8%

33.2%

37.8%

12.0%

30.8%

25.9%

18.5%

13.7%

Income

整体网购用户 1 号店顾客

Typical Yihaodian

User

• Primarily white collar• High income• High consumption• 19-40 years old

Source: YHD internal survey and public industry data 2012

Yihaodian’s customers

武汉库房成都库房

北京

成都武汉

沈阳

西安

宁波

深圳

南京 4

杭州重庆

天津

济南扬州

温州金华

芜湖

合肥

镇江常州无锡

苏州

昆山

南通

石家庄

福州厦门

惠州

珠海中山

佛山

东莞江门

二级配送中心自配送站点

广州

上海

半日达范围次日达范围

无锡 3

• Nationwide coverage (except Hong Kong, Macau, Taiwan)

• 70% self-distributed.

• More than 200 distribution centers in 40 cities

• Next day delivery, half-day delivery and 3x per day delivery available

• SBY (Service By YHD) providing , provides e-commerce solutions for traditional companies.

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Yihaodian’s supply chain network


How long does it take for an Yihaodian

picker to pick an average order (16.7

SKUs) from our 300,000+ SKUs housed

in 30,000 square feet of warehouse

space?

<80 seconds

The power of Yihaodian’s supply chain


YHD APP QR code shopping Unlimited YHD

Yihaodian is an innovator in the wireless market


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Ecommerce in China





Excellent customer experience

Diversified categories

Reliable quality

Reasonable price

Simple and compelling promotions

Simple usabilityLogical

classificationQuick search

Friendly interfaceMultiple payment methods

Accurate order preparation,

Secure packingFast deliveryGood service Member

managementPrecision marketing

Customized service

YHD, aims to TOP1 customer service in the industry


Source: HYNA Consulting Ltd. 2012.12

85% Satisfied

90% Satisfied

Unsatisfied7.5%

Neutral 2.5%

Unsatisfied 11.6%

Neutral 3.4%

Average 2012 customer experience score

Average 2011 customer experience scores

Yihaodian focuses on constant improvement to our customer experience


• Bachelor degree of Space Physics from Wuhan University, Masters degree of Physics from Cornell University, PHD of Science of Supply Chain Management from the Wharton School of the University of Pennsylvania.

• Entrepreneurial talent winner from the National Thousand Talents Program.• Vice President of Dell global procurement and Vice President of global supply chain at Amazon.• Tenured Professor in the School of Management at the University of Texas, Mccombs Business School.• Co-founder of Yihaodian with partner Liu Junling in 2008.

President : Dr. Yu Gang

CEO: Liu Junling• Masters degree in International Business

from Flinders University in Australia• Entrepreneurial talent winners in National

Thousand Talents Program.• Former Vice Global President at Dell, and

President of Greater China and Hong Kong,

• Former General Manager of Avaya China, tripling Avaya’s performance in China in three years.

• Co-founder of Yihaodian with partner Yu Gang in 2008.

Yihaodian’s founders

www.yihaodian.com

Documents

January 2013 An Introduction to Yihaodian. Ecommerce in China Yihaodian establishes its presence in the market Yihaodian’s core competitive advantages