E commerce as an entry strategy to china (fifty technology) - april 2015

USING E-COMMERCE TO EXPAND YOUR RETAIL BUSINESS INTO CHINA

Wing-Yun Wong, London 2015

CHINA RETAIL GROUP1

Market Opportunity

China’s population is over 1.34 billion.

They are all SPENDING at some level

The China Retail Market

Chinese consumers are

starting to spend & will

create one of the world’s

largest retail markets

The China Retail Market

China’s consumer economy

has been likened to that of

the USA, developing from

the 1970s where many

consumer brands started

from this time to dominating

the US market by building their brands & distribution

through this consumer

growth cycle

Who & Where are your Customers?

• There are over 650 cities in China with considerable growth in the 3rd

and 4th tier cities. • There are over 120 cities with a

population of more than 1 million people.

• China has several different economic cycles developing at different stages & paces at the same time.

The Existing Chinese Consumer

The Chinese are transforming from savers to spenders in this generation

They have adopted the “What About ME?” approach

They are gaining access to credit cards and facilities

They are very aware of brands and what they want

The evolving Chinese consumer is growing in maturity and in an online environment

E-Commerce in China

CHINA RETAIL GROUP7

Why E-Commerce in China?

Only way to reach consumers across China

Effective way to operate on a low cost model with effective stock controls

COST

1 shop fit-out ≈ setting up an e-commerce

response, servicing 500 cities in China

Removes risks of dealing with property leases

Removes staff & training issues

Counteracts fake products in the market

E-Commerce in China

E-Commerce in China

E-commerce in China – What They Buy

E-Commerce in China – Desire for Foreign Goods




E-Commerce is Evolving

CHINA RETAIL GROUP16

E-Commerce is Evolving in China

Today’s e-commerce in China is mainly dominated by the

Alibaba GroupThere is a shift with consumers towards

more specialty websites that focus on market sectors

Sales are starting to grow for stand-alone websites that have

effective social media support

China Logistics & Fulfilment


Logistics & Fulfillment FlowchartInternational fulfilment & Importer of Records (IOR) model : Retailer just needs to simply integrate into

the current site with our logistic systems. CRL can connect, communicate and fulfil orders to consumers in over 500 cities in China without the retailer establishing operations in China.

Parcel consolidation

Custom clearance

Returns Management

Orders

contracted courier delivery

Shipment

CRL DC

Quality Check and re-racking for secondary sales

Domestic Courier deliver to customers

RETAILER

IOR – Processing

IOR contract

3. Clearance Contact 4. Documents preparation

5. Orders and Products input into system

• The Retailer can use DHL or other international couriers. It will be efficient though cost is high.• CRL can provide a consolidated solution to save logistics cost when orders are more than 20/day.

6. Delivery to consumer

2. Shipment to China

1. Purchase at term of DDP

CRL is one of the few proven fulfilment providers that can ensure timely and effective delivery under our IOR model, where CRL acts as the Importer of Records for all parcels entering China.

RETAILER

Key Elements to Succeed in China Retail


How to Succeed in China Retail

Be aware of where the current market is & how fast changes take place –different to international trends.

You don’t have to be the largest international brand to succeed, though you have to be smart on how you enter & service China.

Know where your customers are across China

Have access sales channels that can touch your customer

Have access to distribution that reaches your customers

Have access to payment gateways that link to your targeted customers

22

How to Get Started


Where Do I Start?

Retailers entering China must first:

Decide Who and Where your Customers are located

Decide what products are really suitable & the range accordingly

Decide if you want to establish your own operations or use an integrated agent

Decide what sales channels best suit their products

MUST DO for Retailers Entering China

CHINA

Look at the most efficient

brand building strategies

Continuous ongoing product development to keep up with the

incredibly fast changing market

Think INTERNATIONAL

Act LOCAL

How Can CRG Assist?

CRG can provide consulting to a

Stand-alone e-commerce sales &

support solution that can also

include full back-end fulfillment and an end-to-end solution

The Retail Question

“The Question is: Can you ignore what is evolving in the retail sector China & can you ignore what your competitors might do in China”

China Retail Group


Why CRG

• CRG’s core divisions CRS and CRL provide an end-to-end e-commerce solution

• CRG understands the whole retail process, from initial marketing campaigns to the point of selling the right product to the right consumer through the right channels

29

Strong local networks and partnerships

Local knowledge and experience

Cost efficient strategies and effective ways to access the market and target consumers

Strong operational capabilities of e-business marketing, access to top tier sales channels, fulfillment, customer care, payment solutions, etc

End-to-end local partner for China market across all spectrums of the retail process

CRG’s Distribution Capabilities

“CRG’s nationwide distribution network

connects you to your Chinese consumer”

Offshore Model

• Chinese name creation & brand registration (English & Chinese)

• CRG manages the Retailer’s social media accounts in China – weibo / wechat

• CRG builds a Chinese marketing website (.cn) – mainly for selected product promotion to the Chinese consumers.

• If Chinese consumer is interested in the product(s), they are taken to the international website for purchasing.

• CRL manages the freight & logistics of the parcels from offshore, importing them through customs into China, and delivers them to the end consumer.

• CRL also manages the back-end customer services and returns.

• Retailer can opt for stand-alone online/offline marketing campaigns subject to budget.

User Experiencewww.selfridges.cn

www.selfridges.com

More than 60 million active daily users on

Weibo

270 million active users on We Chat

CRG can manage Retailer’s social

media accounts on an on-going

basis to generate brand awareness

and interact with target consumers

Customer Services &

Returns

Stand-alone digital

marketing and offline

advertising campaigns as

well as Baidu SEO/SEM

optimization

Tmall Model

• T-Mall is currently China’s most popular dual language B2C platform. T-Mall

has 150,000 merchants and 200,000 brands selling to 180 Million customers. It is

considered a good solid dependable first step into e-commerce in China.

• CRG are accredited agents for T-Mall and are not seen as a foreign entity.

Using our in-house expertise, we can establish the site and channel for sales

far quicker than independently by the Retailer or by any other agent.

• T-Mall offers various store formats:

• Flagship Store – owner of the store must be formal or exclusive representative of the brand

• Specialty Store – Dealers with distribution rights without geographical restrictions in the Greater China region

• Franchise Store – Franchisees with rights to distribute licensed products & valid license from Franchisor

• Monopolized Store – Merchants with two or more brands within one of T-Mall’s product categories. Limited to one per merchant per product category

www.ibdshop.com

International Brands Direct (IBD)

• An affiliate of CRG, IBD is a stand-alone end-to-end sales and fulfilment platform for international retailers to sell to Chinese consumers in China at minimal cost and no risk.

• Sell from offshore into China, fulfill from home country. Chinese consumers pay in RMB, Retailer collects in own operating currency.

• No need to hold stock in China.

• IBD provides customer services and handles returns (for damaged goods only)

• IBD is attractive to retailers who have no current operations in China, or have stores in key major cities only and cannot reach consumers in the rest of China.

• IBD allows retailers to test what works in China, and migrate to their own Chinese website and/or set-up in China with knowledge and confidence.

• 3 key features:

IBD sales platform

IBD Travel Directory (to drive tourism sales in-store)

IBD Outlet

• For mock website, visit: www.ibdshop.com

http://www.ibdshop.com/

Contact Us

China Retail Group2nd Floor, Building 8485 Feng Lin RoadShanghai, China

Suite 504, 5th Floor, Chinachem Tower34-37 Connaught RoadCentral, Hong Kong

Contact Us: Wing-Yun Wong, DirectorLondon, [email protected]

www.chinaretailgroup.com www.chinaretaillogistics.com www.ibdshop.com