cross-border o2o - take your brick-and-mortar store to china via omnichannel

Take Your Brick-and-mortar Store to China via Omni-channel

Introduction

Chinese are Going Abroad for Shopping

What Keeps Chinese Consumers from Buying More

O2O – The Chinese Version Omni-channel

From Omni-channel to Cross-border O2O

How to Implement Your Cross-border O2O Solution

Case Study on Kiwi Discovery

About Azoya

Page 1

Page 3

Page 5

Page 8

Page 11

Page 15

Page 16

Content

Chinese tourists are shopping around the world. They exhibit a staggering purchasing power that keeps impressing the whole world. That means a tremendous opportunity for overseas bricks-and-mortar stores. However, the market potential brought about by Chinese outbound shoppers has not been fully realized. Their buying behavior is arbitrary and only happens for once. After they come home, the transactions are terminated and thus cannot be converted to regular purchase. Omni-channel may provide some insights as to improving shopping experience and creating more touchpoints with Chinese customers. However, it still needs to be customized.

Inspired by China’s prevalent O2O retail, Azoya has come out with an innovative solution called cross-border O2O to help overseas bricks-and-mortar stores sell to China in a smarter and more effective way. China’s O2O retail, which is similar to omni-channel retail, has become a defining force in upgrading the country’s retail industry. By aligning omni-channel with cross-border O2O, overseas bricks-and-mortar retailers will fully tap into the huge market demand and even bring their bricks-and-mortar retail business to China’s online shopping community.

The $169 billion Chinese outbound tourism market, coupled with the evolu-tion of multiple-channel shopping of Chinese consumers brings a tremen-dous opportunity to overseas bricks-and-mortar stores. An innovative busi-ness model - cross-border O2O - is designed by Azoya to bring your retail business to the Chinese consumers whether they are abroad or at home.

Cross-border O2O - Take Your Brick-and-mortar Store to China via Omni-channel

1

Introduction

A report issued by China Tourism Academy shows that China has been ranked the No. 1 for 3 years in a row with respect to the total number of outbound tourists and the total volume of offshore consumption.

According to the latest stats published by China National Tourism Administration, 120 million Chinese tourists went abroad last year, up 16% from the previous year. The total consumption volume of Chinese outbound tourists reached 1.1 trillion Yuan (equav. 169 billion US$), hitting a historic record.

Unionpay International has recently published a report showing that shopping takes the biggest part in Chinese outbound tourists’ consumption.

With their remarkable purchasing power, Chinese outbound tourists have unsurprisingly become the most profitable customers that overseas stores compete to woo. However, attracting more Chinese customers to your store is not an easy task.

2


Gowing by 16%

$169 billion was spent on shopping

120 million Chinese tourists went abroad in 2015

How to attract more of those affluent Chinese outbound shoppers to your store? You may think if you implement a mature omni-channel strategy, more Chinese tourists may find your store through digital channels. Omni-channel sounds like a good idea, since it can bring customers, who couldn’t possibly visit or even hear about your store in the physical world before, to your store. However, it won’t happen for sure. Even omni-channel is in the right direction, it is still not enough considering the complexity of cross-border in-store shopping.

1. Omnipresent as omni-channel retail is, it can’t cover the newly arrived tourists. Chinese tourists are immune to omni-chan-nel marketing in other countries. They are not previously exposed to omni-channel marketing in western countries. They don’t use western social media, which is crucial for your marketing. Email marketing also has little influence on them.

Most of them choose stores based on the reviews on the internet or recommendation from others. Only a few famous stores are lucky enough to be included into Chinese tourists’ choice list. That explains why physical stores need to gear their strategy to the preferences of Chinese outbound tourists.

2. Due to a lack of information and lan-guage barrier, it’s hard for Chinese outbound tourists to find a rela-tively less famous store.

3


Is there a way to change this situation? The answer is YES. Although omni-channel in the West doesn’t work on Chinese tourists, it’s still in the right direction. In omni-channel retail, sales opportunity is not restricted to physical space. That means the geographical scope of your retail business is expanded to a larger space. Decentralized tourists will have more opportunities of finding your store if you customize your strategy to attract them. Furthermore, once a customer relationship is established, it can be sustained through digital channels. In this way, you can bring about a better customer experience and grow your customer base steadily.

a) The amount of goods they can purchase is limited. When shopping abroad, their shopping needs are not fulfilled due to inconveniences of transportation. The amount of goods they can buy is determined by the volume of their suitcase.

b) Customer education is not possible under outbound shopping scenario. Chinese tourists come to overseas stores unprepared and don’t have enough information about the products. Customer education thus can’t be done prior the purchase. Without thorough customer educa-tion, the effect of pre-sales promotion will be of little avail. Peddling to a consumer who knows little about the products won’t help much.

c) Chinese tourists can’t have the fullest of pre-sales and after-sales customer service. Due to the language barrier, they are not able to acquire all the information they need. After they come home, the transaction process is terminated, so do after-sales follow-up and customer services.The shopping behavior is arbitrary and only happens for once. Long-term customer relationship can’t be established. One can never imagine the possibility of turning a tourist shopper to a regular customer.

3. Physical stores are hindered in delivering an optimized experience to Chinese customers for these reasons:

4


Inconveniences of transportation for the customerThorough customer education is not possibleLacking after-sales customer service Long-term customer relationship can’t be established

How to customize your omni-channel strategy to attract Chinese tourists? Will Chinese consumers adapt omni-channel shopping experience? Don’t worry, they are well immersed in omni-channel shopping and it’s not so complicated to implement a revised omni-channel strategy targeting at them.

There are several indicators heralding the rise of O2O concept in China.

In China, O2O (Online to Offline) has been a hot consumer internet trend recently. By definition, it is an e-commerce model that combines offline business opportunities with the Internet. O2O e-com-merce platforms attract customers online, but the real consumption of services is experienced by the customers offline.

Globally, O2O has bred businesses like Groupon, OpenTable and Uber. While in China, O2O is not just an innovative business model, it’s a new norm in the Internet economy. Nearly all Internet giants are investing heavily in O2O business, offering a profusion of services to customers.

In China, O2O is not just an innovative business model, it’s a new norm in the internet economy.

1. Chinese people are becoming more connect-ed. The number of mobile users keeps rising in China. According to MIIT, the number of Chinese mobile users reached 1.29 billion in March 2015, with the 4G users accounting for 162 million. The wide access to the internet has granted a technical ground for O2O offerings.

5


Chinese mobile users in March

2015

1.29 billion

Chinese 4G mobile users

162 million

Source: The data were estimated based on the finacial results published by enterprises and interviews with experts by iResearch statistical model.

iResearch’s data shows that the GMV of China mobile shopping market reached 929.71 billion Yuan in 2014, leaping 239.3% from 2013. The growth was much faster than that of the overall GMV of China online shopping market which increased 49.8% and stood at 2.8 trillion Yuan in 2014.

2. Chinese Internet companies are employing increasingly sophisticated and mature IT technologies. Taking the QR for example, it’s embedded in almost all SNS and eCommerce APPs. An old stat, from October 2013, counted more than 113 million scans with WeChat in one month. According to Visualead, an Israeli startup providing custom QR codes, China is 2 years beyond the rest of the world for the application of QR, which is usually shunned by the Western early adopters.

6


2011

12 69 274

930

1,809

2,835

3,728

4,504

1,000

0

2,000

3,000

4,000

5,000

6,000

2012

China mobile shopping GMV (bn Yuan) Growth %

2013 2014e 2015e 2016e 2017e 2018e

426.1%490.3%

297.4%94.5% 56.8% 31.5% 20.8%

239.3%

China Mobile Shopping GMV 2011-2018

Chinese customers obtain information in many ways.

3. The way Chinese customers obtain information has been revolutionized. A growing number of smartphone users are now searching for information on their phone before purchas-ing. As customers weave in and out different digital channels to do their research, they are exposed to various marketing touchpoints. Merchants can tap into this behavior pattern by targeting accurately at customer’s exact needs.

4. Customer behavior has changed. Chinese consumers are now more discerning and highly connected, and they increasingly seek “shopping convenience” where they can shop anytime, anywhere and in any way, via a variety of channels. They also expect multiple methods of payment and various pickup and return options. There is a growing demand for an integrated shopping experience across multiple channels.

7


As stated above, omni-channel marketing strategies employed by overseas bricks-and-mortar stores don’t work well on Chinese outbound tourists. They need to be remodeled to fit Chinese consumers’ shopping preferences. China’s O2O provides an inspiration to adjust regular omni-channel strategies employed by stores outside of China. Since Chinese consumers become increasingly experienced in the Internet economy resembled by O2O, overseas brick-and-mortar retailers can catch this trend and realign their omni-channel strategy with an innovative cross-border eCommerce solution--Cross-border O2O.

Cross-border O2O is designed to target at Chinese outbound tourists and include them to omni-channel strategies even when they are in a totally foreign environment. Under the cross-border O2O solution, the offline experience and online transactions are integrated seamlessly through mobile devices. Customers are attracted to your store via online channels, the transaction journey is then moved to the online platform. The purchase is made on the spot, but the goods will be sent to customers’ home in China through cross-border shipping. Once a transaction is done, the customer relations are not terminated. Customers can share their shopping experience on Chinese social media, and you can acquire more customer without they going to your store.

8


From Omni-channel to Cross-border O2O

By employing cross-border O2O solution, overseas brick-and-mortar retailers can achieve these benefits:

Stores

Coupons

Friends Nearby

1. Provide conveniences that traditional physical stores can’t provide. Through a mobile store retailers can present expansive and customized product description in Chinese. Payment process is also made easier. Chinese customers can directly pay with WeChat Pay and Alipay, which means more convenience to them. Plus, with shipment being taken care of, Chinese tourists can buy more without worrying about carrying loads of stuff home.

2. Create more opportunities to engage with Chinese customers through all channels. When Chinese tourists come within the beacon signal range of your store, they can easily find you with the help of their mobile phones. They can register on your mobile store and get coupons. Then you have the opportunity to educate them gradually and steer them to actual buying. They can also share your promotion contents to their social media to get more coupons. Chinese consumers heavily rely on what others are saying on social networks when making shopping decisions. When they see their friends’ shopping experience in your store, they probably will place orders even they are in China. Goods will be shipped to them via personal parcels.

9


3. Once a transaction is completed under cross-bor-der O2O, the customer can be converted to your potential regular customer. You can follow up with their future shopping needs by interacting with them timely on social media. Thus you can get more repeat purchase and grow your customer base gradually.

4. Comprehensive sales information will equip you with better inventory forecasting. After employing cross-border O2O, you will get a dynamic database on Chinese outbound tourists’ shopping behavior. This is where you can start to launch a smart inventory forecasting and avoid inventory overstocking or shortage.

10


11


WeChat Pay and Alipay are the most popular payment methods in Chinese mCommerce. Chinese shoppers make their payment in RMB, overseas stores will receive the payment in local currency calculated by the real-time currency exchange rate.

Payment

Language

Eliminating language barriers along the shopping journey will certainly be more appealing to Chinese consumers. Language support is not limited to product description, it extends to localized marketing and operation.

Beacons can provide retailers with a wealth of data that helps them engage with shoppers in more timely and granular fashion. Coupled with mobile apps, beacon’s potential can be exploited to the most.

Beacons

Build your infrastructure

12


Logistics

Adapt to Chinese domestic O2OCustomer acquisition through WeChat

Direct personal parcel shipping service is a must. It not only provides convenience to the customers but also help you to gain more registered customers. Customers requiring their goods to be shipped need to register and fill out a form. In this way you can collect their information for remarketing, and they can get a better shipping service. The real-time shipping information can be accessed on the mobile site after they log in.

Many Chinese merchants now employ a strategy that’s designed to attract new customers through WeChat. After a customer follows an official account, he/she will be offered a coupon. It just takes a tap for them to get a coupon, so they are willing to do this. Once they follow your WeChat Official Account, you can navigate them to registration through coupons or other creative marketing strategies.

follow

Coupons for the new

13


Coupons gained by sharing

China’s mainstream O2O companies nearly all employ a promotion strategy that encourages users to share their purchase to social media by offering them coupons. This method is effective for it creates virus effect swiftly. People see their friends sharing something interesting on social media would check and try.

Coupons gained by sharing

Emphasize on Mobile Experience

It’s needless to say that mobile devices are indispensable for O2O business. In China’s Internet indus-try, the using experience on mobile devices is given more and more importance. To cater to Chinese customers’ preferences, it’s import-ant to learn from the mobile version of China’s prevalent eCommerce sites. Study the layout, interface, animation and other aspects of these popular sites and see what you can do to improve the customer friendliness of your mobile site.

14


Localized Marketing and Operation

Localized Marketing and Operation

Marketing on your end is not enough. To fully tap into your existing Chinese customer base, you need to devise localized marketing strategies. The Chinese customers who once shopped in your store can serve as marketing agents for you. We can call them “seed customers”. When these seeds come home and spread their experience to local Chinese consumers, you will reap the fruit of increased brand exposure as well as customer base.

Marketing Channel Building

Tourist Agents

Create Engaging ContentDirect MessagingGain CouponsSharing on Social Media

Brand Awareness TrafficConversion RateTransaction and ProfitRepeat Purchase

Customer Acquisition

Analytics

Repeat Purchasein China

In-store Advertisement

Chinese e-Marketing

eCommerce Store Contents Operation

15


Kiwi Discovery is a bricks-and-mortar store in Auckland, New Zealand. It’s located in a commercial district where Chinese tourists flock to shopping. Kiwi Discovery launched its cross-border O2O during the Chinese Lunar New Year, when a swarm of Chinese tourists went to New Zealand to celebrate the holiday and went on a shopping spree.In the past, although Kiwi Discovery was successful in attracting a lot of Chinese tourists to its store, it lacked the method to retain customers and implement remarketing in the long term. Now, after adopting Azoya’s cross-border O2O solution, Kiwi Discovery had been empowered to solve these problems and poised to sell more to Chinese tourists.Customer Acquisition

Azoya helped Kiwi Discovery build a mobile store to create the O2O scenario. Once a customer is attracted to register on the mobile store, he/she is more likely to buy. However, to navigate customers to registering and buying, there must be incentives. It’s easy to achieve this – giving coupons! Two kinds of coupons will be given to customers. One is for instore shopping and one is for online shopping after customer register on mobile store. This method is effective. The registered customers grew by 60 times after less than a month’s operation, with the usage rate of the coupons reaching 57%.

Online PromotionCross-border O2O has enabled kiwi Discovery to run promotions in Chinese internet. Through social media and other online platforms, Kiwi Discovery can have its brand exposed directly to Chinese customers even when they are at home in China. An enhanced brand recognition will attract more Chinese customers to its online store and physical store. The UV of the mobile store registered an average growth rate of 71.7% for the past half month.

Instore PromotionAlthough it’s convenient for any physical store to run an instore campaign, it’s difficult to target specific customer group. For Kiwi Discovery, what’s difficult is how to devise a promotion strategy that’s customized to Chinese customers’ shopping preferences. After adopting cross-border O2O, Kiwi Discovery is now equipped with more marketing leverage.

Offline Ads & Staff Support

Kiwi Discovery's achievement in less than a month:

16


About AzoyaEstablished in 2013, Azoya International is a leading solutions provider in cross-border E-com-merce to China.

Azoya offers fully-managed E-com solutions and services to retailers, e-tailers, brands and even bricks-and-mortar stores to help them expand to China. The solutions cover Chinese E-com cloud services, Cross-border O2O, leading cross-border ecommerce platform introduction.Azoya’s one-stop solutions and services offer a cost-effective and risk-free approach to break into the Chinese market.

With Azoya doing the ground work in China, overseas retailers can avoid all the nuisances arising from traditional international expansion, such as setting up local business entity, confu-sion over government policies and market adaptation, etc.

What’s differentiates Azoya from its counterparts is that it can help overseas retailers have their brand directly exposed in China!

Branding & E-marketing

Cloud Hosting

Supply ChainFinance

Managed Operation

A Managed Solutions Provider in Cross-Border E-Commerce to China

cross-border o2o - take your brick-and-mortar store to china via omnichannel

Retail