e-commerce marketing for us food business in china
DESCRIPTION
How can small to median sized company entry the China Consumer packed goods industry with cost effective approach and ride the explosion wave of eCommerce growth?TRANSCRIPT
E-Commerce Marketing for US Food Business in China
Mandy Xi September 2014
2
The Marketof E-Commerce Space
The Consumersof E-Commerce Space
The Marketingthrough E-Commerce
Channels
Tmall flagship store Online comments insights
OBJECTIVE
To drive online sales through understanding and marketing to the online consumers in China
Executive Summary
Aggregate all channels
3
The Market
The Market The Consumers The Marketing
The Marketof E-Commerce Space
The Consumersof E-Commerce Space
The Marketingthrough E-Commerce
Channels
Tmall flagship store
4
City GDP
2nd
Modern Retailers
Online Retailers
3rd
and more
The Market The Consumers The Marketing
1st Tier Cities
4 Cities16 mn HH$10,250/HH Income
2nd Tier Cities
23 Cities38 mn HH$8,553/HH Income
Source: Euromonitor / iResearch / JLL
The China Market Landscape
Modern retailers are strong in big cities, yet they have limited coverage. Online Retailers is covering the whole China, especially meeting the needs
of the rising middle class in smaller cities.
1st 16 mn HH
38 mn HH
236 mn HH
5
Sales Value by Retail Channelin billion dollars
Online Retailers
Modern Grocery Retailers
Tradition Grocery Retailers
While Modern Retailers will continue growth as penetrating the market, Online retailing will grow exponentially
The Retailing Channel Projection
Source: Euromonitor / iResearch
31.39% 4y CAGR
7.61% 4y CAGR
1.04% 4y CAGR
The Market The Consumers The Marketing
Online Retailers
Modern Grocery Retailers
Tradition Grocery Retailers
6
3.3%
2.1%
1.6%
1.3%1.0%
0.8%
0.7%0.5%
23 Big Grocery Retailer Company Sales Share 2013
39.5%
The grocery modern retailing space is highly competitive and fragmented
23 Biggest Grocery Retailers
Other Retailers
15.5%
China Modern Retailing Space
The Market The Consumers The Marketing Source: Euromonitor
Total Retailer Sales
7
China Online Retailing Space
Source: Euromonitor / iResearch / Eguan
300 millionOnline Shoppers
$ 7.7 billionFood and Drink
(2.5%)
$ 1 billionImported food
(13%)
$ 307 billionTotal online Sales
(2013)
The Market The Consumers The Marketing
Online retailing space is huge and an ever-growing market for imported food
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45.1%
14.0%3.4%
2.0%1.8%1.6%
32.1%
Tmall JD
Suning Yihaodian
Vipshop Amazon China
Others
Online Retailing Brand Share
China Online Retailing Space Landscape
Source: EuromonitorThe Market The Consumers The Marketing
Alibaba Group
Tmall.com Taobao.com Alibaba.com
B2C C2C B2B
Tmall
“Alibaba’s IPO… will rank as the largest-ever technology debut in the United States.” – Reuters 9/8/2014
Tmall is the biggest E-commerce platform for online retailing
9
Tmall Overview
Onsite stores (52,000 Flagship)
American Cherry Campaign 2013:2 weeks, 42 cities, 168 tons cherry,
$ 2.5 million sales
Tmall qualifies Businesses Sales heavily driven by festival promotions Tmall provides big data services for business
Source: Tmall / Ebrun
No.1 Online Retailing
Platform
86,000+
The Market The Consumers The Marketing
10
￥ 150 ￥ 198
Flagship Stores cap the wide price range
The Market The Consumers The Marketing
Having a flagship store on Tmall will allow brands to normalize the price range
Tmall Flagship Store Example - Pricing
Lowest Price Highest Price
Flagship Store Price
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Associate the elements with functionsScientific facts and health benefits
Build brand story through pillars Heritage, Taste and Quality
Tmall Flagship Store Example - Messaging
Source:TmallThe Market The Consumers The Marketing
Tmall flagship store is a efficient venue for brand messaging
12
The Consumers
The Marketof E-Commerce Space
The Consumersof E-Commerce Space
The Marketingthrough E-Commerce
Channels
Online comment insights
The Market The Consumers The Marketing
13
Since 2010, health has consistently ranked as the 2nd biggest concerns for Chinese Consumers
The Market The Consumers The Marketing Source: Nielson China
The Online Consumers
E-Commerce Dependents
High Potentials
E-Commerce Skeptics
Preference to online shopping
% of Online Shoppers
Income levelOnline shopping frequency
Price Choppers
24%26%34% 16%
Reason buy or not buy Have low income
Purchase for family
Concern about quality
Sensitive to price
Age 15-24 30-40 26-39 >40HighMediumLow
300 million
Online Shoppers
Income
Health
Segmentation
Targeting
Healthy Safe USATasty Premium
Positioning
14
Reviews Break Down
97%Positive
Brand A
The Market The Consumers The Marketing Source:Tmall / YHD / Womai
Consumer Insights from Online Comments
Taste On Promotion Good Value Good Packaging Authentic/Imported Healthy Fresh Zipper
66%
40%
16%
8%5% 4% 3% 2%
95%Positive
Brand B
Value
Quality
Taste
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Value Quality
For Whom?
How to eat?
Taste
The Market The Consumers The Marketing Source:Tmall / YHD / Womai
Key Insights
KidsOther Family
49%51%
71% 81% 37%Consumers love the Sweet and Sour taste
Consumers are satisfied with the current price value
Consumers are satisfied with the packaging, especially with the Zipper feature
25%Consumers value the Authentic US brand
Baking
Too Sour
Too Sweet
Sweet and Sour
13%
15%
71%
Expensive
Good Value
19%
81%
Zipper
Wet
Fresh
Authentic/Imported
Good Packaging
11%
11%
16%
25%
37%
* These are percentages of comments that mentioned about taste, value or quality
16
The Marketof E-Commerce Space
The Consumersof E-Commerce Space
The Marketingthrough E-Commerce
Channels
Aggregate all channels
The Marketing
The Market The Consumers The Marketing
17
PR Agencies
Online Retailers
Social Media
Offline Events
Flagship Store
The Market The Consumers The Marketing
Marketing Strategy Recommendations
Modern Retailers
Connecting online and offline marketing channels
Use Tmall flagship store as the venue
Build synergy between channels to amplify the effects
Drive online and offline sales Collaborate with PR agencies
* For more campaign recommendation details please see page 27-29 in Appendix
Food Brands
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Conclusion
For imported food brands looking for opportunities to enter China without big marketing budget, Tmall as the dominating online real estate is the most cost effient platform for current
and future growth
Tmall with huge online traffic, is a ideal venue for price normalization, brand messaging and consumer data collection.
To aggregate both online and offline sales and marketing channels will allow building synergy across channesl and drive real sales
19
Chinese consumer confidence remains higher than US Europe and Global Average
The consumers confidence levels of tier 1 to tier 4 cities are converging
The Market The Consumers The Marketing Source: Nielson China
The China Consumer Confidence Level
Tier 1 cities
Tier 2 cities
Tier 4 cities
Tier 3 cities
Appendix I
20
2013 Attractive Weibo Picture by Category
Travel
Food
Sports
Female and Male
Brand Logo
Comics
Movie Star
Animal
Product Effect
Car
Product
2013 Weibo User Make Online Purchase through Weibo Because:
Ads meets my needs
There is coupon
It’s a trustworthy brand
Good WoM
Friend recommended
Easy Transfer to eCommerce
Lots of comments and retweet
Seen the ad. many times
Celebrity recommended
48.6% Weibo user says they made online purchases through weibo links
China Social Media-Weibo Overview
• Premier social media in China• 140-Character-post Micro-blog• 500 million total users and 46 million daily
active users• Weibo users are interested in Food and Travel• Weibo users make online purchases through
Weibo links
What is Weibo
California Almonds• Engaging KOLs: Nutritionists / Therapists
/ Fashionistas / Food-bloggers• 21 Days Health Snacking Campaign • Use QR Code to connect Weibo to
Canada Tourism Committee• Dynamic interface• Promotional video clips• Chinese ambassador• Information condensed posts• Hosting Hot Topic (Travel Around
Canada)• QR Code link to Wechat account
Appendix II
21
To expand the scope of online marketing in China
Social Network Usage
Wei
bo
Wec
hat
The Market The Consumers The Marketing Source: Nielson China / iResearch
Online Marketing
Online video ads.
TV Health Program
SEOSearch Engine Specialty
WebsiteSocial Media
0%
10%
20%
30%
40%
50%
60%52%
42%36%
3 Major Information Source for Online Purchases
Other Online Marketing ChannelsAppendix II
22Source: Nielson Online Purchase Behavior Research Report www.eguan.cn/download/zt.php?tid=1973
2013 Food Online Purchase by Category
Imported foodRice and Oil
SnackFood related goods
FreshBakery
Local specialty foodJuiceSpice
Instant DrinkDairy
Instant FoodLiquor
Kitchen AppliancePregnancy/baby product
Dry FoodOrganic Food
Tea LeavesHealthy Food
Avg. Online Purchase Frequency by Category (per year)
Maternal and Child Products
Drink/Packaged Foods/Health Products
Apparel/Shoes/Accessories
Travel/Virtual/Services
Cosmetics/Personal Care
Household ProductsAppliances/Mobile Phone
/Digital ProductsBook/DVD/Video
Food and Drink Online Purchase DataAppendix III