E-Commerce in ChinaDealers Comparison & Sales Plan

Simulation situation

Prepared by Charlotte Lee2013 Nov

Agenda

China Market and Platform comparison

Appendix

Chinese Digital Landscape

E-Shop Set up and Hosting Package in China

Platform Ecosystem and ROI Analysis

2014 Sales Checklist

Conclusion

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Business Background: E-Commerce in China

China rapidly expand e-commerce market rapidly in New Internet users because:-

limited reach of brick & mortar: geography hampers the sales of retail store

wider product selection better bargain power high trust on some e-

commerce

E-Commerce Ecosystem

There are 5 type of e-commerce in China. This presentation will focus on 4 main platforms

E-Commerce Rank in China

The top e-commerce channel rank in China is always B2C

1st : Taobao 2nd: Tmall 3rd: Amazon China

2171th : Glamour Sales

Source: http://www.ectop.com.cn

4 Platforms Frontpage Analysis

Help to evaluate:

the image of platform match with brand

the brand & product controlability

marketing and event ads

C2C E-commerce – Platform analysis

ProductCategory

TmallAdvertisements

EventWeekly or Monthly

Theme Sales

• Shops are private

• Cheaper Price

• Fake product

• Aesthetic photo

B2C E-commerce – Platform analysis

ProductCategory Event

Weekly or Monthly

Theme Sales

• Normal Mall

• Guarantee of quality

• Comparative higher price

• Better aesthetic photo

• Brand products including multi-national and Chinese local

B2C E-commerce – Platform analysis

Product Promotion

On SalesEvent

• Shops are shown under Amazon• Emphasis Product diversification• Brand-focus• Standard photo picture

B2C E-commerce – Platform analysis

ProductPromotion by BRAND • Shops are under

GLS

• Membership customer segment – Private Club

• Luxury brand product

• Big discount

• Vendor offered picture

• GLS marketing campaign

4 Platform Service Analysis

Help to evaluate:

the amount of company resource spent

worth of mouth in chinese communities

Platform Service + Word of Mouth

Consumer Service Policy

VAT Invoice provided Credibility of Shop 7 days return & exchange service Refund triple if fake products Delivery within 24 hours 30 days free-of-charge repair & maintain 3rd party quality checking service

Feedback from customers

Detail understanding of shop Leave inquiry messages Product quality (Word of Mouth)

Forums & communities

• Exposure of fake products• The ways to discern the fake

Chinese is social during the shopping process

More than 40% will read and post reviews online.

Platform Service + Word of Mouth

Platform Service + Word of Mouth

Consumer Service Policy

VAT Invoice provided Credibility of Shop 7 days return & exchange service

Word of Mouth

Focus the user’s private forum or bloggers.

Platform Service + Word of Mouth

Consumer Service Policy

7 days return & exchange service Brand guarantee Free Delivery if sales amount > 688 On-line Q&A

Platform Service + Word of Mouth

University student and Young professional are the most Active in both on-line and E-commerce

Since university student has lower purchasing power, Young professional will be our Target customers

** Each internet user segment details shown in Appendix

4 Platform Comparsion

Help to evaluate:

Financial and Company resource needed

Difference customers segment

ROI self-evaluation

E-Commerce Ecosystem – dealer operation

comparison

Sourcing

Online

platform

Payment

DeliverySuppliers Customers

Suppliers Business model

Selling format + deposit

Final Payment Charges to platform Customers

Amazon B2C Consignment BasedZero (0) deposit

fr Amazon.

2 per month

Monthly Fixed rebate: 5%Annual Volume rebate: 1-5%Annual Marketing: 25K – 80K

General public

TMALL B2C Zero (0) deposit fr customer after receipt goods14 days after deliver

Security deposit 100-150KIT service charge 30-60KMarketing: 10K – 100K

General public(higher salary)

Taobao C2C Zero (0) deposit Ditto Marketing: 10K – 100K General public

Glamour Sales

B2C Consignment Based20% Deposit

Fr GLS. 99 days after deliver

GLS commission: 35% Marketing: Zero (0)

Membership affluence

CMSDC B2C Consignment Based20% Deposit

Fr CMSDC. ?? payment period

Commission: ??% Marketing: Zero (0)

Grass-roots

Details shown in previous 5 presentation

E-Commerce Ecosystem – Objective, Resource, Customers

comparison

Factors Amazon TMALL Taobao Glamour Sales

Brand Image Middle Middle Low High

Sales Middle High High Low(Flash sales)

Financial Invested

Middle High Low Middle

Photos workload

Middle Very High High Low

Marketing High Middle Middle Low

Customer service

Low(Amazon offer)

High Very High Low(GLS offer)

Target group • Young professionals• students• Active mid-agers

• Young professionals• mid-agers

All • Young professionals• Active mid-agers

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Chinese in China: E-commerce behavior

Help to evaluate:

what media we can use for entre China

market

how to implement sales + marketing program

1 Year action plan

Digital Landscape – Chinese vs.

Western

China’s digital landscape is more complicate than western. The Chinese internet users exhibit distinctive online

- Communication (instant messaging) - Entertainment (music, game, news-reading)

Chinese Distinctive Online Behavior

U$10B

U$2B

U$24B

Only 19% of consumer in China go official brand or manufacturer websites (Japan 41-60%)

Chinese is social during the shopping process – word of mouth

Shoppers develop the habit of not rely Search Engineer to find product online – but taobao

Fragmented Social network • Kaixin001 for white collar,• Renren for student• Douban for artistic, • Qzone for young & active. • Sina weibo for general public

How Lead to Sale in 3 E-commerce

• Taobao 92%

• Tmall 88%• Amazon

67% Awareness Rate

• Taobao 89%

• Tmall 69%• Amazon

44%

Trial Rate

• Taobao 91%

• Tmall 82%• Amazon

70% Frequency of

usage

• Taobao 74%

• Tmall 50%• Amazon

21%

Frequency of

usage

(% of total e-shoppers)

(% of trial rate)

(% of total e-shoppers)

(% of awareness rate)

1. Do a brand search on Baidu (China’s Google):

Even brand is not in China yet, it do create buzzle - try to find out what people already know and what they’re saying.

2. Set up a Sina Weibo account (China’s Twitter):

Talk about what’s going on with your brand at home, not just in China, so customers can experience your brand’s personality. Make sure to offer incentives to shoppers visiting from China. (A solution to stagnant retail sales at home?)

3. Sell with high-end e-tailers like OMEI.com or Glamour Sales:

See this as a lower-risk way to test product, price and positioning in the cut-throat China market.

Marketing Checklist

Marketing Checklist

4. Set up a Tmall “store”

> 450M Chinese customers shopped online, with 370 million of them using Taobao.com. Don’t try to change the buying habits of the Chinese.

5. Build presentable site:

Website is where customers can experience your brand’s unique personality — even if they prefer to purchase elsewhere. Also, list the addresses of your overseas stores, so potential Chinese customers know where to find you when they travel.

6. Get socializing:

None of this matters if you’re not out there socializing. Hong Huang (often called “China’s Oprah”) cited DVF as the best social media brand in China.

Timeline

Q1 – Q2 JAN FEB MAR APR MAY JUN

FestivalNew Year

1/1CNY

ValentineBoy / Girl Festival

EasternWorker’s

DaySummer

Collection Gent WatchGent

LadiesLadies Ladies

GentLadies

Function – Brand Viral like Invicta

How Invicta brand viral – refer to previous slides Marketing Plan 2014 in HK will match for China market – refer previous slides

Timeline

Q3 - Q4 JUL AUG SEP OCT NOV DEC

Festival SummerFather Day

8/8Autumn Festival

Nation Day10/1

Single Day 11/11

X’Mas12/24

CollectionGent

LadiesGent

GentLadies

LadiesGent

LadiesGent

Ladies

Function – Brand Viral like Invicta

E-shop Hosting Package

How Invicta brand viral – refer to previous slides E-shop hosting package details – shown in this last part of slides

What we need to consider ? Multi-Channel advantage

Increase customer’s desire Get confident on brand

Media Utilization Glamour Sales as test. Taobao create awareness. Tmall generate traffic

Risk and Challenges Stock-keeping units Logistic Marketing invested Grey Market Fake brand

E-Shop Opening2 Options

1. Self-control : Self ownership

2. Sub-contract : Hosting

Pls refer to previous slides

Prepared by Charlotte Lee

2013 Nov

THANK YOU

I seek a long-term association with a well established organization where I would get a chance to lead, exercise the skills that I have developed, build lasting relationships in the field of Marketing and in turn benefit the organization and progress with it.

Appendix - E-shop Design Template

Standard Premium

Appendix -

Appendix -

Appendix -

• Select potential product to prepare as next Star product

• Stock Clearance

• UPS, high inventory product, raise marketing budget

• Low cost generate traffic

All produ

ct Promo

te

Star Produ

ct

Potential

Product

Stock Cleara

nce