E-commerce Market in China 2011 - Sample

E commerce Market ChinaE‐commerce Market – China

November 2011

Executive Summary

Market E‐commerce market in China has been demonstrating rapid growth and development over the past few years

China’s e‐commerce will continue to exhibit speedy growth with annual sales volume growth of at least x % y‐o‐y from 20‐‐ to 20‐‐

Drivers: Challenges:

Drivers & Challenges

‐ Increasing internet use

‐ Emerging middle class

‐ Rise in online shopping

‐ Extensive usage of plastic money

‐ Logistics challenges

‐ Huge online counterfeit market

‐ Psychological barrier and adaptive difficulty

‐ Security issuesChallenges ‐ Enhanced e‐payment services

‐ Rise in mobile commerce

‐ Growing social network base

‐ Rise in target industries

h l d f l h

‐ System lacks talent and information resources

‐ Entry barriers

bl h

Government Policies and Regulations (20 )

Trends

Geographical spread of online shopping Group buying Initiatives by players Internal logistics networks

Favourable demographics Traditional stores opting for online stores Availability of greater funding Rising popularity of e‐books

Competition

Government Initiatives

Government Policies and Regulations (20‐‐)

Government Policies and Regulations (20‐‐)

12th Five Year Plan (20‐‐ ‐ 20‐‐)

International players like Company 1 and Company 2 are boosting their investment in China, indicating tougher and more fierce competition for the domestic players

2E‐COMMERCE MARKET IN CHINA 2011.PPT

Competition and more fierce competition for the domestic players

Some of the major domestic players in the market are Company 3, Company 4, Company 5, Company 6, Company 7,Company 8, Company 9, Company 10 and Company 11

•Introduction

•Market OverviewMarket Overview

•Market Segmentation

D d d S l P i•Demand and Supply Perspective

•Drivers & Challenges

•Government Initiatives

•TrendsTrends

•Competition

K T k


•Key Takeaways

Operation Model of an E‐commerce System

f e d

a

cg

b


h

China’s e‐commerce sector is predicted to experience the fastest growth rate in Asia

•China is the world’s x largest e‐commerce market

More than y mn internet users, including z mn online shoppers

Market Size and GrowthE‐commerce Market – Overview

3,000

USD bn

a7y , g pp

along with p mn Chinese middle class population boosts

further growth in the sector

• In 20‐‐, more than q mn people were directly employed

by the Chinese e‐commerce companies1,000

1,500

2,000

2,500 +30.9% a6

a5a4

a3a2a1by the Chinese e commerce companies

No. of people indirectly employed reached more than r mn

and is expected to grow to s mn by 20‐‐

E‐commerce Paying AccountsE‐commerce Registered Accounts

0

500

20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e20‐‐20‐‐

15,000

20,000

mn

+21% b4b3

b2 200

250

300

mn+16% c4

c3

c2c1

0

5,000

10,000

20‐‐e20‐‐e20‐‐e20‐‐

b1

0

50

100

150

20‐‐e20‐‐e20‐‐e20‐‐


20 e20 e20 e20 20 e20 e20 e20

Type 1 transactions dominate the e‐commerce market in China

•Type 1 refers to an online market for online business deals

Market Size and GrowthType 1 E‐commerce

3,000

USD bn

a7

In Q1 20‐‐,Type 1 revenue amounted to USD x mn, y‐oy growth of y%

•No. of Type 1 companies reached z in 20‐‐, y‐o‐y growth of p% I 20 thi t i d USD i it l f

1,000

1,500

2,000

2,500 +30.9% a6

a5a4

a3a2a1

In 20‐‐, this sector received USD q mn in capital from r investors, which includes s VCs and two IPOs that raised a combined USD t mn and five mergers

Revenue Break‐Up (Q1 20‐‐)Competitive Landscape (20‐‐)

0

500

20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e20‐‐20‐‐

b6%

b5%Company 4

Company 3

Company 2

Company 1 c4%c3%

c1%Trade by large

Trade by small‐and medium‐sized enterprises

b5%b4%

b3%b2% b1%

Others

Company 5

Company 4

c2%

c1%

Airfares and hotels

Trade by large enterprises

Online shopping accounts


G segment boom in China is giving serious competition to the traditional G outles

Segment 1 SalesSegment 1

•G sales in China amounted to ~USD x tn in 20‐‐, and are expected to grow by ~y% in 20‐‐ 200

USD bn

• Segment 1 represents the next major segment for retail growth in China

• China had z mn online stores as of Dec 20‐‐

•With increasing prosperity and easily access to the 50

100

150+25.4% a4

a3a2

a1

Share of Goods Sold Online (20‐‐) Number of Segment 1 Users

With increasing prosperity and easily access to the Internet, Segment 1 sales is expected to surge in the coming years 0

50

20‐‐e20‐‐e20‐‐e20‐‐

b1%b3%Others

Type 2

Type 1

150

200 +49%c3

mn %

1,0

c1

PenetrationOnline Retail Users

b2%

0

50

100

0,020‐‐

c40,5

20‐‐

c2

c1


Drivers & Challenges – Summary

Drivers

Increasing internet use

Challenges

Logistics challenges

Emerging middle class

Rise in online shopping

Huge online counterfeit market

Psychological barrier and adaptive difficulty

Extensive usage of plastic money

Enhanced e‐payment services

Security issues

System lacks talent and information resources

Rise in mobile commerce

Growing social network base

resources

Entry barriers

g

Rise in target industries


Trends – Summary

Group buying

Geographical spread of online shopping

Initiatives by players

p y g

`Trends

Internal logistics networks

Traditional stores opting for online stores

Favourable demographics

Availability of greater funding


Rising popularity of e‐books

Major Domestic Players in the Market (1/8)

Headquarters Cit 1

Company Snapshot: Company 1Corporate Information Financial Performance

Revenue Profit/LossRevenueHeadquarters City 1

Founded 20‐‐

ProductsProduct 1, Product 2, Product 3, Product 4, Product 5

Profit/Loss

Revenue

200

300

400

‐5

0

5

Profit/LossUSD mn

RevenueUSD mn

a4

a3

Key People Person 1 ‐Executive Chairperson

Business Highlights

0

100

200

‐15

‐10

‐5

20‐‐20‐‐20‐‐

a2

20‐‐

a1

Business Highlights

• Company 1 has focused on selling product 1online and later expanded into select product 5 category, through its website x.com In addition, it operates the x.com marketplace program, which enables third‐party merchants to sell their products alongside products

d b hsourced by the company

• As of March 20‐‐, it has sold more than y product 1 along with other media products, the largest selection available from any single retailer in China both online and offline

• It has z logistics centers strategically located throughout China


• In Q2 20‐‐, company started the operation of the P fulfillment center and expanded the new facility in Guangzhou fulfillment center, resulting in total warehouse space to q square meters

Other Major Domestic Players in the Market (1/6)

•Company 2 is a family of Internet‐based businesses

Company Snapshot: Company 2Corporate Information Business Highlights

Headquarters Cit 2 • Company 2 is a family of Internet based businesses It includes online marketplaces, retail and payment platforms, shopping search engines and data‐centric cloud computing services

It’s subsidiaries include x.com, y Marketplace, z Mall, p ,

Headquarters City 2

Founded 19‐‐

ProductsProduct 1, Product 2, Product 3, Product 4, Product 5, Product 6, Product 7

q Cloud computing, r and s

• x.com operates as a subsidiary of the company 2 x.com operates as a business‐to‐business e‐commerce company in the PRC and internationally

, ,

Key People Person 2 ‐chairman

– Company offers platforms for international, domestic, and retail trade

In Sep 20‐‐, company plans to raise as much as USDe mn from the listing of its website‐designing unit in the U.S

In Feb 20‐‐,company bought f% stake in Sinosoft • In Oct 20‐‐, company announced its latest plan toTechnology Plc, Chinese export‐services software maker, with an investment of USD g mn as an effort to enhance it’s customer service

In Oct 20 , company announced its latest plan to invest USD h mn to its B2C subsidiary, z.com (z Mall), in an effort to assist small and medium sized enterprises


SAMPLE Online Traffic Specifications (1/7)

Websites Online Traffic Statistics

Traffic Rank (China) x1

Daily Pageviews* x2

Global Traffic Rank – p

x.comDaily Pageviews* x2

Daily Visitors* x3

Time spent on site (minutes) x4

y.Com

Traffic Rank (China) y1

Daily Pageviews* y2

Global Traffic Rank – q

Daily Visitors* y3

Time spent on site (minutes) y4

Traffic Rank (China) z1Global Traffic Rank – r

z.com

( )

Daily Pageviews* z2

Daily Visitors* z3

12

Time spent on site (minutes) z4

E‐COMMERCE MARKET IN CHINA 2011.PPT

Thank you for the attentionE‐commerce Market ‐ China report is a part of Netscribes’ Information Technology Industry Series. For more detailed information or customized research requirements please contact:

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E-commerce Market in China 2011 - Sample

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