E-Commerce in China Ms. Running XIE - @ Business Finland E-Commerce Online Forum General Manager, Data-Driven Marketing & Sales Division ...
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E-Commerce in China
Ms. Running XIE
@ Business Finland E-Commerce Online Forum
General Manager, Data-Driven Marketing & Sales Division, transcosmos China
M (WeChat) : +86 138 0199 2141 | Linkedin: Running, Yanghui XIE
June 12, 2020
1
Key Internet Players in China
B A T M D P
2
Contents
E-Commerce Market in China Case Study Market Entry Strategy About Us
3
PA R T
E-Commerce
01 Market in China
4
E-Commerce Worldwide: China is the Leading Player
In 2020, global e-commerce is expected to be over 4 trillion US dollars, growth rate 19%
The world's largest e-commerce market is China
Source：eMarketer.com, 09/19 https://zhuanlan.zhihu.com/p/80758549 5
Top E-Commerce Platforms in China: 2020
6
7
TMALL
8
JD Taobao
9
Suning Pingduoduo
10
11
Source：04/2020 http://www.tmogroup.com.cn/more/other/26559
6
E-commerce Market in China: More Users
904 897 710
64.5%
Million Million Million
Internet Users Internet Penetration Rate Mobile Users Online Shopping Users
⬆ 50 million VS 19 ⬆ 3.3% VS 19 ⬆50 million VS 19 ⬆ 16.4% VS 18
Source：04/20 https://baijiahao.baidu.com/s?id=1665196230603105117&wfr=spider&for=pc
7
E-commerce Market in China: More Spending
Per capita expenditure trends of major E-commerce platforms 2015-2019
Alibaba JD Pinduoduo VIP.com
Source：04/20 http://www.chyxx.com/industry/202004/853942.html
8
Alibaba and JD are Massive, but…
Source：07/19 http://www.199it.com/archives/912791.html 9
They Do Not Suit Every Company
Cost to Get a Customer on Alibaba and JD
Unit: CNY
Alibaba JD
600 526 536.06 2000
500 1503
390 1500
400
300
279 1000 757.77
200
500
100 142
0
0
2016年 2018年 2019年Q1
2016年 2017年 2018年 2019年Q1
Source: 13/06/2019 Caijing New Beijing News
10The Development of Live Streaming EC Market in China
It is estimated that the market size of live streaming EC will reach 961 billion CNY in 2020,
with a year-on-year growth of 111%.
Forecast of market and growth rate of live streaming EC 2017 - 2020
Source：04/20 http://www.chyxx.com/industry/202004/853942.html
11Main E-commerce Platforms for Food in China
“Home Economy” in China
Social Platforms Began to Sell
Food to Home Social Platforms
12Live Steaming Platforms vs Product Category
Tabao TikTok Kuaishou
Women's
Food & Beverage Food & Beverage
Clothing
Food & Beverage
Source：01-04/20 China live E-commerce research report 13Food Industry Development
Dairy products: with an average annual compound growth rate of 1.77%.
Yogurt: with a compound annual growth rate of 11.94%.
2018-2022 Dairy Product Sales Trend Forecast 2018-2022 Yogurt Product Sales Trend Forecast
in China in China
Sales Volume Sales Revenue
Unit:
- 100M CNY (Sales Revenue）
- 10,000 ton （Sales Volume) Source：06/19 http://www.chyxx.com/industry/201906/747488.html 14Food Industry Development
Beer: with an average annual compound growth rate of 6.64%.
Oats: with an average annual compound growth rate of 8.88%.
2018-2022 Beer Product Sales Trend Forecast 2018-2022 Oats Product Sales Trend Forecast
in China in China
Sales Volume Sales Revenue
Unit:
- 100M CNY (Sales Revenue）
- 10,000 ton （Sales Volume) Source：06/19 http://www.chyxx.com/industry/201906/747488.html 15Food and Beverage Market: Tmall & Taobao
GMV of oats > 3.6 billion CNY
GMV of drinking water > 2 billion CNY
GMV of cheese/dairy > 600 million CNY
Tmall &Taobao （June 2019 – May 2020） GMV
Unit：CNY
4,000,000,000
3,617,550,676
3,500,000,000
3,000,000,000
2,500,000,000
2,024,481,359
2,000,000,000
1,500,000,000
1,000,000,000
617,361,377
444,468,428
500,000,000
117,232,967 39,852,360
-
Oats Water Cheese/Dairy Pork Cranberry Blueberry
Source：淘数据 taosj，period：2019-06~2020-05 16Best Sellers on Live Streaming Platforms
Best sellers through live streaming: products with high repurchase rate, high margin, low unit
price
Most popular product categories: Food, Cloth (Apparel), Beauty
Food 47%
Cloth 45%
Beauty
Beuty 42%
Home 33%
Sport 26%
Luggage 16%
Kitchen 15%
3C 13%
Source：Ipsos短视频用户的在线调研(2019.11.29-2019.12.03),N=1000
17Cross-border Business Is Growing In China
In 2017, the sales for cross-border business in China reached 11BillionCNY, with a YOY
increase of 49.6%
3555.9
2824.4
Unit: 10M CNY 2182.7
1613.3
1113.4
744.2
411.6
59.8 146.6
2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e Source: iResearch
18Impact of COVID-19 on Alibaba and Tencent
Chinese E-commerce has been hard-hit in January and February
A strong recovery since March put most E-Commerce and social platforms back on their
growth track.
Source：05/20 https://walkthechat.com/how-did-covid-19-impact-alibaba-and-tencents-earnings/
19Consumers Care…
Healthy (Natural) + Convenient + Trustworthy (Brand) + Full of Fun
Small Packaging
Low Sugar
Meal Replacement
Traditional Brand Celebrity And Cross-border
Global
Source：CBN Data 20Online Shopping Trends Survey in 10 Asian Cities 2020
Positive experiences make people think "I want to use this shopping website again.”
Figures show %
Top 3 reasons in each city Tokyo Shanghai Taipei Kuala Lumpur Hanoi Metro Manila Bankok Singapore Jakarta Mumbai Average of 10 cities
I was able to purchase a product with free
shipping, where it usually costs money to ship
17 33 72 78 74 77 70 63 74 74 63.1
The packaging was done with care 32 43 43 60 51 Free Shipping
58 49 45 58 52 49.1
There was ample customer support, and the
subject of my inquiry was resolved immediately
18 36 39 43 44 29 34 32 38 36 34.9
A product I never would have considered was
8 40 38 36 29
Well Packaged
32 30 29 32 32 30.5
recommended to me, and I liked it
I was able to receive/return the product at a
16 23 27 34 35 29 31 31 32 43 30
store
Impressive
The product was easy to return, as there were
10 29 27 41 Customer
21 22 Support
21 21 28 41 26
only a few conditions of return
Similar products were suggested for out-of-
stock items
5 20 13 29 28 21 20 19 24 27 20.5
A handwritten thank-you letter was included Unexpected, but
12 28 13 23 20 20 17 22 24 20 19.8
with the product after purchase Relevant
Support was provided for requests I had that
were not explicitly stated on the website
5 26 11 27 Recommendation
25 21 11 19 18 24 18.7
Other 1 0 0 1 1 1 0 0 1 0 0.5
None of these in particular 39 3 2 1 3 2 2 6 2 1 6
21Online Shopping Trends Survey in 10 Asian Cities 2020
Negative experiences make people think "I don't want to use this shopping website anymore.”
Figures show %
Top 3 reasons in each city Tokyo Shanghai Taipei Kuala Lumpur Hanoi Metro Manila Bankok Singapore Jakarta Mumbai Average of 10 cities
The delivered product differed significantly
from the photo 20 53 49 55 58 43 45 38 54 42 45.7
Product delivery was delayed 13 33 43 52 44 45 42 38 50 42 40.3
The images on the website were small, and
the product details were difficult to 23 23 47 48 47 47 39 38 39 48 39.9
understand
I was unable to solve a problem/it took a
long time to solve a problem due to 14 45 35 39 37 22 30 27 21 30 30.2
insufficient customer support
Product registration and membership
registration methods were complicated and 22 26 Detail
Every 38 in Customer
35 29 Experience
25 28 27 23 23 27.4
time-consuming
Returns were not accepted/conditions for
9 30 37
MATTERS!
34 34 26 24 22 24 30 27.1
returns were strict
The website was slow, and it took a long
time to load each screen 14 25 29 31 21 21 12 21 23 18 21.5
Products I purchased online were sold for a
cheaper price in stores 13 13 16 28 23 20 18 23 17 22 19.3
Cancellation procedures were complicated 7 24 16 25 18 21 17 20 12 21 18
Other 2 0 0 1 0 2 0 1 0 1 0.8
None of these in particular 38 6 6 5 7 8 8 14 5 10 10.7
22Contents E-Commerce Market in China Case Study Market Entry Strategy About US
PA R T
Case Study
02
24Case: Suntory
Customer Demand: Increase GMV
KPI：Achieved 172% (Double 11)
Activity Analysis: GMV brought by the “EC Festivals” accounted for 59% of the total GMV
Overview of Annual GMV
Double 11
618
Women’S Day
99 Sales Day
Family Day
New Year Festival
25Case: Li Ziqi
26Case: Live Streaming by Li Jiaqi
Live Streaming with goods, GMV more than 100 million
Eric Favre (France）, NICE (China Taiwan）, Teane (France）, BellaB (USA）... From health care, personal care to beauty, we
select organic and healthy products for Chinese consumers
• In the "double eleven" in 2019, GMV
nearly 300% YOY
• No.1 in 2 years of entering china
• Helped 100,000 Chinese babies solve the
problem of iron deficiency
Top Taobao Live anchor
Li Jiaqi
The US president teaches you how to sell goods
Source：03/20 https://baijiahao.baidu.com/s?id=1661572944505967482&wfr=spider&for=pc
27Case: Live Streaming by Viya
ViYa（Top Taobao Live anchors）cooperate with Starbucks
During the live steaming, 3,000 Starbucks products were sold out in 5 seconds.
Results ：
• 90,000+ Frappuccino coupons
• 38,000 +latte coupons
• 30,000+ grapefruit coupons
• In all, nearly 160,000 cups were
sold, equivalent to five-month sales
of a large tea shop
Source： http://www.dmeiti.com/shownews/154.html
28Case: Live Streaming Mix&Match Cooperation
Shoppers could soon buy JD products on Kuaishou platform
The strategic cooperation between JD and Kuaishou focuses on Kuaishou online shops, and Kuaishou anchors can
directly purchase JD products
• Users can buy JD products directly
• Enjoy JD delivery and post-sales
services
• Kick off JD’s 618 promotion and
kuaishou’s 616 shopping festival.
29Taobao VS Douyin VS Kuaishou
Kuaishou （3C） TikTok（TV） Taobao （All goods）
GMV 300 million/3 hs GMV 91.32 million/6 hs GMV Three billion/ Double“11”
30Contents
E-Commerce Market in China Case Study Market Entry Strategy About Us
31PA R T
03
Market Entry Strategy
32Step-By-Step Approach for New Comers to China
Understand market
Understand market> Sell products
> Sell > Grow >
products share
Grow> Duplicate
share >success
Duplicate success
From Chinese market research to E-store set-up, store operation, customer support, online promotion, order
management, fulfillment to business analysis, digital marketing and CRM.
III: Digital &
data-driven
I: Research & Marketing
Consulting To grow
To understand
IV: CRM
To duplicate
II: Sales Channels success
Identifications &
E-commerce
Operation
To sellStep I: Market Entry Strategy Research & Consulting • Business environment • Market size • Competition • Competitive advantages • Sales channels analysis • Marketing efforts analysis • Successful cases • Failure cases • Market entry 101 (brand name / product portfolio / key partners / price strategy …) • ROI estimation • …
Oats Market Competitor Analysis
According to Euromonitor statistics, the size of China's breakfast oats market was about 7.402
billion CNY in 2018.
Competitor Analysis TOP 10 Oats Companies in China
High Brand Awareness
1 Large-scale Enterprises
2 Regional Enterprises
3 Relatively Small Scale
Low Brand Awareness
Quaker&Weetabix,&Nestle
Source: 04/20 https://www.qianzhan.com/analyst/detail/220/200224-80dc8207.html
35Current Situation of Snack Food Consumption Market
95s is the main group of online snack consumption and has grown to be the largest group in the
online snack market.
Source：CBN Data 36Step II: Sales Channels Identification & EC Operation
VsStep III: Digital and Data-Driven Marketing
• Leverage National Brand (Finland)
• Keep regular exposure
• Go social: owned media assets - Wechat, Weibo, Red Book, Tiktok, Kuaishou…
• Content marketing
• Balance between global and local
• Keep up with the local rhythms
Double 11
618
…
CNY Chinese Double 12
517 Mid-Autumn
Valentine’s
Food Lovers
420
Mom & Baby
38Step IV: CRM
Official WeChat Mini- WeChat Official
Call Support
Website Program Account
Customer Service Data Product Registration Data Customer Service Data Favorite Topic Data
Transaction Data Customer Service Data Transaction Data Customer Service Data
Members Data Browse History Data Members Data etc.
etc. Transaction Data etc.
Members Data
etc.
Tmall, JD, etc
Brand Shared CRM
Server Transaction Data
DMP Hub Offline Store Members Data
etc.
Transaction Data
etc.
Benefits
– Data connection
Tag Communication More – Increase variety of tags
– Targeted communication and offers
Basic Tags Customer Service Campaign Data
Transaction Tags General Communication Social Listening Data – Increase potential users sales
Interaction Tags Targeted Communication Trial Request Data – Enhance customer experience
Social Tags etc. etc.
etc. 39Contents
E-commerce Market in China Case Study Market Entry Strategy About Us
40PA R T
04
About Us
41transcosmos Overview
transcosmos Group:
Headquartered in Tokyo Japan, TSE: 9715
Founded in 1966, with 54 Years Experiences
171 Locations in 30 Countries
57,300 Employees Worldwide
284.7 Billion JPY Revenue in 2018
transcosmos China:
Shanghai Wenxin Center (China HQ)
Started business in China in 1995, with 25-year
experiences
32 Locations in 21 Cities
7,000 Employees
*As of the end of November 2019
42Offerings by transcosmos China
One-Stop Solution for Companies
From Scratch to Full-Swing Business
DDMS
CC EC ITO BPO
Data-Driven Business Process
Contact Center E-Commerce IT Outsourcing
Marketing & Sales Outsourcing
43History of Our E-Commerce Service
EC Service Department Set-up
transcosmos China Established • Providing one-stop e-commerce
• Contact center service 2009 service from site construction, 2015
• CRM system development store operation, customer service,
promotion, order management to
fulfillment
The First EC Project Launched B2B EC Model Started
• Online store operation Being an exclusive online
2006 • Online customer service 2012 distributer of a Japanese paper
• EDM delivery products brand, to carry out B2B
• EC system development EC business in China region
. .
44Cross-Border E-Commerce
transcosmos provides cross -border e-commerce websites for Japan, China, and the ASEAN market and sells
high-quality products to local consumers
Domestic Global
Market Supplier Market Seller
Product Consumers
Production Sales Agreement
Sales
Seller
Cross-Border E-Commerce
Sales Channels
Manufacture
E-Commerce Website
Operations Orders
Distribution Local Delivery
Company
Production
Factory
Warehouse Bonded Zone /
Free Trade Zone
Warehouse Free Trade Customs
Zone Office
45One-stop E-Commerce Service Flow
46Clients
3C & Electric FMCG Finance &
IT & Internet Apparel Auto & Moto Others
Appliances & Household Insurance
47Partnership: Focus on Long-term Growth
Partnership Top Service Provider
04 • TMALL 5-Star Service
• 70+ Brands we are Provider
serving/served
• TMALL Golden Partner
• Cross-platform 03
operation • JD Service Partner
• Alibaba Data Bank Certificate
02 • TMALL Lazada Cross-Border
Service Partner
Global Network One-stop Solution
01
• Offer services to • Omni-Channel Solution
companies in 48 • O2O/B2B/B2C
countries
48Thank You! Running XIE General Manager, transcosmos China Data-Driven Marketing & Sales Division Email: running.xie@transcosmos-cn.com Linkedin: Running, Yanghui, XIE M: +86 138-0199-2141（Wechat） Address: 8F, No.755 Weihai Rd. Shanghai China Website: www.transcosmos-cn.com
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