Date post: | 14-May-2015 |
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Marketing |
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Andrew WatersApril 2014
• Rapid underlying economic growth• Expanding middle class• Demand for foreign fashion brands
rising more quickly brick-and-mortar penetration
• Chinese consumers are starting to spend & will create one of the world’s largest retail markets
• 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
4
There are more than 120 cities in China with a population of more than 1 million people, all developing at different stages and paces
Chinese Consumers are: •Transforming from savers to spenders in this generation•Adopting a “what about me?” approach•Gaining assess to credit cards and facilities•Very aware of brands and what they want•Quickly maturing in an online environment
• Only way to reach consumers across China’s vast land
• Effective way to operate on a low cost model
• More effective stock controls
• Removes risks of dealing with:• Property leases• Staff training & issues• Fakes
For the cost of a Shop Fit-Out, a Retailer can set up an e-commerce response that
can service 500 cities in China
Online penetration within the
apparel sector is more than 20%
Within the apparel sector, B2C platforms and independent B2C are gaining share over C2C
2011 Online Apparel Spend: 33 Billion RMB
2012 Online Apparel Spend: 51 Billion RMB
80%
14% 6%
61%
22%
17%
Tmall sells 48,000
products per minute
81% of online shoppers purchased at least one item within the apparel/shoes category in the last 6 months of 2012
Awareness of where the current market is & how fast changes take place is crucial for retailers entering China, as this could be very different from 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.
Success Stories• Uniqlo• H&M• Zara • Forever 21
Failure Stories• American Eagle• Abercrombie &
Fitch• Marks & Spencer• Esprit• GapUniqlo Success Model
In the west, consumers say “Let me Google
it”. In China, consumers say “Let me Taobao
it”
In the west, consumers say “Let me Google
it”. In China, consumers say “Let me Taobao
it”
• Ecommerce in China is dominated by the Alibaba Group, which operates China’s two largest Ecommerce platforms, Taobao and Tmall as well as the number one payment platform, Alipay (comparable to Paypal)
• Instead of searching for a product on Baidu or Google, most Chinese consumers will go directly to Taobao or Tmall to conduct their search
• Consumers are beginning to lose loyalty to mass market merchants like Tmall and shifting towards more specially websites that focus on market sectors
• Sales are also starting to increase in stand alone websites that have effective social media support
Percentage of online shoppers loyal to one Ecommerce site
2009 2010 2011 2012
Retailers must first decide:
• Who and where their customers are
• Which SKUs are really suitable for the local market
• If they want to establish their own operation or use an integrated agent
Example China market rollout: 1. Open a Tmall store integrated with a
social media strategy to showcase your brand’s products and to educate consumers on the brand’s culture
2. Identify third-party physical distribution channel to sell one or several SKUs to grow expand brand awareness and provide consumers with physical interaction with the brand
3. Launch a stand-alone website to roll out comprehensive product line with full brand control
4. Open unique physical flagship locations in select key cities across China to further enhance branding image by providing events, stylists, brand educators and strong customer service
• Look at the most efficient brand building strategies.
• Keep updated with ongoing product development to keep up the incredibly fast changing market
• Think INTERNATIONAL, act LOCAL
• CRG can provide consulting to a standalone e-commerce sales & support solution that can also include full back-end fulfillment and an end-to-end solution
“The Question is:
Can you ignore what is
evolving in the retail sector China & can you ignore what your
competitors might do in
China”
E-commerce is one of the only ways that a retailer can reach and connect to its targeted consumers across China on a low cost operating model
Fashion retailers need to
officially enter China sooner
rather than later to solidify
their brand value and control
quality over what is being sold
by unofficial vendors on
Taobao, as well as gain brand
awareness before the official
retail market becomes more
saturated
CRG is a multi-channel retail services company that has the ability to assist retailers entering China through a multi-channel approach and network
“CRG’s operating model is to use its sales and distribution channels to partner with
retailers and brands to link them to consumers in China through a
multi-channel approach.”
• Through its sales, marketing and logistics channels, CRG can offer international retailers both a stand-alone or a broader multi-channel approach for end-to-end retail e-commerce, sales & distribution services to facilitate or support their growth in China
• Our E-Commerce division provides combined services allowing retailers who are not present in China to have a full stand-alone sales and distribution response to enter China without the need to build a full service operation in China
To maximise sales, retailers must select the right partner to work with that has, the local knowledge, relationships, connections, and local expertise are the primary ingredients for success. Given the bureaucratic nature and ever changing picture in China, anything else will lead to significant problems. CRG is the right partner.
CRG prides itself with the following capabilities:•Multi-channel capability•Unique E-Commerce capability•National licence for fulfilment•Different solutions tailored to customers to maximise sales•Ability to collect payment using various methods for Chinese consumers•Local Marketing expertise•Flexible approach to the commercials•The logistics infrastructure•A Customer Portfolio
Andrew Wyles Waters, Chairman CRG China Retail Group
Investments & Strategic PartnershipsT: +852 6117-8852
Wing-Yun Wong, Hong KongE: [email protected]
Mike Woodall, LondonChina Retail Logistics Limited
Kristin Graham, ChinaChina Retail Services
W: www.chinaretailgroup.com
THE END