e commerce as an entry strategy to china (fifty technology) - april 2015
TRANSCRIPT
USING E-COMMERCE TO EXPAND YOUR RETAIL BUSINESS INTO CHINA
Wing-Yun Wong, London 2015
CHINA RETAIL GROUP1
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
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 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
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
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
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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”
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
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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
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
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
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