Marketplaces: Easing Cross-BorderE-Commerce for SMEs

Reid WegnerBusiness Development ManagerRakuten IchibaOverseas Sales Strategy

2

3 Considerations for SMBs going Cross-Border

Large brands/retailers SMBs

Marketing and brand awareness

• Strong overseas brand awareness• Large budget for international

marketing• Established trust/authority with

customers

• Moderate or no brand awareness• Low budget for int’l• Uncertain trust/authority with

customers

Global logistics / order management

• Broad coverage and fulfillment capabilities

• Complex inventory/order management requirements

• Weak coverage, CBT enables global fulfillment

• Simple to moderate order management requirements

Global management resources

• Local teams in place around the globe

• Centralized management from US-based team

(And how they differ from large enterprises)

3

MARKETING & BRAND AWARENESS+

4

Marketplaces Bring Global Shoppers to SMBs

“Consumers in South Korea and Japan are far less likely to browse a merchant’s website directly. This demonstrates how important off-website purchasing destinations should be for some merchants.”—2015 Pitney Bowes Global Online Shopping Study

Shoppers Marketplace

500M Tmall (China)

105M Rakuten (Japan)

100M MercadoLibre (LATAM)

Registered Shoppers on Global Marketplaces

Country Dominant e-com players Share

China Alibaba, JD 80%

Germany Amazon, Otto 55%

Poland Allegro 50%

Japan Rakuten, Amazon 40%

Brazil B2W, Cnova 36%

Australia eBay, Coles, Woolworths 34%

USA Amazon 28%

UK Amazon, Argos 28%

India Flipkart, Snapdeal 25%

Spain Amazon, eBay 20%

France Groupe Casino, Vente-Privee 20%

Share of E-Commerce Market Controlled by Dominant Players, by Country

The Rise of the Global Marketplaces, E-Commerce Foundation, 2015

5

Cross-Border Shoppers Prefer Marketplaces

Seizing The Cross-Border Opportunity, Forrester Consulting, 2014

“Shoppers in APAC are particularly reluctant to shop directly with SME retailers, with 57% of respondentsranking this category as their last choice.”

“The majority of respondents in everycountry we surveyed ranked major multibrand online retailers or marketplaces as their first choice out of five business types for cross-border purchases.”

“When making an online purchase from a merchant outside your country, which type of business do you prefer to shop with?”

6

Marketplaces Provide a Platform for Your Brand

Otterbox on Rakuten in Japan SkullCandy on MercadoLibre in LATAM

“There are hundreds of different marketplace options for brands to sell around the globe. Alibaba’s Tmall, eBay, MercadoLibre, and Rakuten, for example, all offerbrands the option to create official stores.”

—Forrester, Making the Case to Go Global, 2015

SneakerHead on TMall in China

7

CROSS-BORDER LOGISTICS+

8

Marketplaces Ease Cross-Border Shipping for SMBs

6 of Top 10 Barriers for Cross-Border Shopping Related to Logistics Solution? Cross-Border Shipping?

“A cross-border shipping model is often companies’ first step toward serving shoppers in other countries. This model has become popular due in part to the fact that it’s relatively low risk and requires a low investment.”

—Making The Case To Go Global, Forrester 2015

However….“Sales generated through any international shipping model tend to be lower than with other approaches.”

PayPal Cross-Border Consumer Research, 2015

9

Marketplaces Offer Built-in Cross-Border Shipping

SMB Merchant Cross-Border Consolidation Point

Marketplace Customer

10

Consolidated Shipping for Multiple Marketplace Channels

Flexible fulfillment for SMBs

Reliable transit times and last-mile delivery

Fully integrated inventory/order management

Customs / duties estimated in advance

11

CROSS-BORDER E-COMMERCE MANAGEMENT

+

12

To Sell Cross-Border, SMBs have to…

Design a local website Translate my product catalog and brand assets Hire a local team for e-commerce operations Run local marketing campaigns Accept international payments Detect international fraud Manage a new set of inventory and orders Handle customer service in another language Ship products internationally

Marketplaces Collaborate with Local Service Partners

SMB Merchant Service Partners Marketplace

Store Design

Marketing

OrderManagement

CustomerService

Logistics

Product Feed

Promotions

Orders

Support

Shipping

Traffic

14

Local Partners Empower SMBs to Sell Cross-Border

Deep knowledge of marketplace operations and success factors

Knowledge of local market and buyer behavior Local language capability Knowledge of local marketing and conversion

optimization tactics Communication with local customers Order management integrated with

marketplaces End-to-End logistics support

SMB Merchant

Marketplace

Local Partner

15

How do Marketplaces Help SMBs do Cross-Border?

Marketplaces bring a lot of traffic and customers to SMBs and create a space for your brand

Marketplaces offer integrated cross-border shipping solutions to help SMBs get products to customers reliably and cost-effectively

Marketplaces collaborate with local partners to operate SMB cross-border e-commerce stores