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A project funded by the European Union
WELCOME TO THE EU SME CENTRE WEBINAR SERIES
www.eusmecentre.org.cn [email protected]
Please continue to submit your text questions and comments using the Questions Panel
Purpose and expertise
Support EU SMEs to establish, develop and
maintain commercial activities in the Chinese
market
Free, confidential information and advice, and
practical support services
An office in Beijing with an experienced multi-
cultural team of 15 persons
Market Access Services
Training, seminar & webinars
Publications
Hot-desks: free, temporary office space in
the EU SME Centre to explore local
business opportunities
A project funded by the European Union
How to capitalise on online selling in China?
Why, how and best practices!
Today’s presentation
1. The Rise of Online
2. Ways to Sell Online
3. Choosing a Platform
4. Getting Your Goods to the Customer
5. Marketing Your Products
6. Case Study: Plastered 8 T-shirts
1. The Rise of Online
Source: MIIT, 2012
Internet / Mobile Usage
Still room for more...
China
• 38.4%
• 513m
EU27
• 61.3%
• 500m
Spain
• 65.6%
• 30.6m
Source: Internet World Stats
E-commerce: Taking off
Source: AT Kearney, 2011
0.6 2 3 7 17
28 42
57 72
88 105
0.15 0.3 0.46 0.6
1
5
13
26
41
57
71
0
20
40
60
80
100
120
140
160
180
200
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mark
et
Siz
e U
S$ b
illio
n
B2C
C2C
18
32
55
83
113
145
176
CAGR of 90% over last five years
Market worth US$ 176 billion by 2014
B2C will be 40% of market by 2014
E-commerce: Taking off
Source: Chinova, 2012
Who’s buying?
Source: Access Asia, CNNIC, 2011
Largest online market in the world
513m users in 2011
750m users by 2015
User profile
Over 90% of online shoppers are aged between 10 and 39
Come from urban areas (over 70%) and have a monthly income
of under CNY 5000 (Euro 575).
They are most likely students (28.6%), managerial and non-
managerial white collar staff (18.2%), self-employed/freelance
(16.4%) and professional technicians (10.8%).
Women account for 45% of all internet users from only 20% ten
years ago.
What people are buying
2. Ways to Sell Online
Select platform
Open shop (B2C or C2C)
Promotion / Sales
Ship product to China
Custom Clearance
Local storage
Ship product to customer
Payment Collection
Aftersales services
Regulation & Standard Inspection & Certification
ICP license, Language
How? How?
How?
• Direct Export
• local storage
Online Selling Models
No ICP
Shipping & payment issues
Consumer trust
After services
Shipping cost/risk
Language
Custom
Payment
Faster delivery
ICP Licence
Website design & maintenance
Consumer trust
Better shipping
& after services
Easier payment
Licences & Certifications
Outside
China
Inside
Stand-alone Third party platform
3. Choosing a platform
Business-to-business (B2B) Business-to-customer (B2C)
Customer-to-customer (C2C)
Small shop
owners
Market Share Alibaba: 48.6% Global resource: 10.3%
Tmall vs Taobao shop
Taobao Tmall C2C
(90.7% market share)
B2C (51% market share, 360buy: 18.5%)
Chinese Guarantor
Individual Registered Company
Free 50,000RMB+
N/A Annual service charge
(30,000RMB- 60,000RMB)
Grading system
Admin
• Deposit
• Annual Fee
• Service charge
Operation
• In-house HR
• Out Sourcing
• Rental
Promotion
• P4P
• CPM
• CPT
• SEO
Cost of products
• Inventory
• R&D
Tmall - Costs to consider
4. Getting Your Goods
to the Customer
B2C Parcel Delivery
Large networks offering basic
services.
Follow franchise model
Rely on speed and price
Wide network coverage
E.g. EMS, 20,000 locations
Smaller networks offering more
complex services.
Compete regionally
Offer warehousing, collect-on-
delivery, scheduled returns
Select cities with most volume
E.g. Topname, Fedex, TNT
Logistics
40kg package from Beijing to Chengdu
Cost 300RMB to 700 RMB
Time 2 to 3 days
Third-party logistics support
• Many delivery companies are able to cover lower tier cities / counties
• Shipping of some goods (Temperature, high value, strange shape etc.) is still a challenge
• Short of hands in holiday seasons, especially Chinese New Year, resulting in delay on
delivery
• Many of the significant players have invested heavily to build their own logistics system
Taobao Fuwu
Image processing
Promotion
Data analysis
Operational management
Storage & Logistics
Finance
Others
Taobao Fuwu is a
comprehensive service
provider database
Third party service provider
Taobao Fuwu (Service)
1562 providers
How do I learn?
There are plenty of resources readily available to sellers
Taobao Daxue (University)
• E-Guidebook, Forum
• Online courses
• Offline trainings, seminars, etc.
E-commerce specialist certification
• Issued by Taobao
• Almost 50,000 certified specialists in China
5. Marketing your Products
• EDM (Electronic Direct Marketing) • CPC/CPA/CPS Affiliate Network: Cost per click / Cost per Action / Cost Per Sales
• Baidu Search Engine Marketing (SEM / SEO)
• Offline marketing, Magazine, subway Ads
• Social Network Communication
Promotion / Sales
http://pro.taobao.com/zhitongche/page5.html#link_01ttp://pro.taobao.com/zhitongche/page5.html#link_01
Pay ads on Taobao search
/SEO
Chinese social media
Deloitte screen small Jan 2010
©2011 Deloitte Touche Tohmatsu Limited. All rights reserved.
As China’s micro blogging, Weibo developed dramatically and became the
hottest emerging media covering 140 million users
Sina Weibo
• Registered members reached 140 million; daily posts exceed 25 million
• Average time spend / day, user is over 1 hour
• Conquer 87% market shares by spending time per member and 57% market share by
number of active user
Year Established 2006 2009
Registered user 195 million 140 million
Obtaining first 50 million users
In 3 years In 1 year
Visit proportion in total internet
visits 0.40% in UK, 0.18% in US 0.63% in China
Active user 38 million accounts with
16 or more followers 100 million accounts with over 20 or more followers
A comparison with Twitter • Weibo may have a more significant influence to the public
than many of the traditional media, i.e. newspaper
• Top account in Weibo
has followers of over 8
million
• China’s No1 newspaper
issued 3.5 million
everyday and only 19
newspaper has
circulation over 1 million
• Weibo has become the most important information
sources for internet users; an emergency may spread to
millions of user in very short time
− A recent example: a well known and well respected
PE fund founder post his decision of elopement in
Weibo. The post was forwarded by 5000 times in one
hour and 2.4 million comments in 10 days
32
6. Case study
B2C Case Study
– Plastered 8 on Tmall
Dominic Johnson-Hill established
Plastered 8 in China in 2006.
A creative and marketing business
“whose designs happen to be on the
front of a T-shirt”.
10 employees
Targets young Chinese white collar
workers, expats and foreign tourists
One bricks and mortar store; one Tmall
store; own website
Plastered 8: Social media
85,414 followers
1.960 blogs
on Sina Weibo
(CN Twitter)
854 Likes on
Plastered 8 actively promote
its brand on every social
media platform
Plastered 8: Background
“In the UK I’d be making a
profit margin of between 3-
5% but here we're on about
12-15%. There are massive
opportunities here and you
don’t even need to be an
established brand.”
Best practice
Feedback Negative feedback will greatly effect the grade of the seller Do everything you can to avoid it!!!!
CRM Carefully manage existing customers Send out promo info via sms or email
Think end-to-end
Including after sales services
Full force
If you ‘do online’, do it full force; dedicate the right resource to it
