NetEase Kaola -the Gateway to China Consuming Market - Sean Wang, VP - Estonia
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
NetEase Kaola
– the Gateway to China
Consuming Market
Sean Wang, VP
N e t Eas e Kao la
PA R T. 1 China Market in the Context
China GDP in the World
High Growth, but still room as far as per capita and urbanization are concerned
China Growth is More Consumption Driven
Contribution % to China DGP Growth
Consumption Investment Export
Source: China National Statistics
Become More Important Market in Consumption
China Has Become Very Digital
China is the Highland for the E-commerce
• Largest online retail market in the world with total GMV of 1.3 trillion USD and online buyers over
610 million, including mobile online buyers over 592 million in 2018
• China’s total retail sales grew 6.9%, well as online retail grew 23.9% and cross-border e-
commerce importation grew more than 39.8% in 2018
• China’s import/export trade increased 9.7%, well as cross-border e-commerce trade grew more
than 50% in 2018
Infrastructure for E-commerce in China
sales combined in US
and Syber Monday online
times bigger than Black Friday
Billion USD in 24 Hours, 3
2018 Single Day sales was 45
In 2018, daily parcel delivery was 140 million pieces,
equivalent to that of US, EU, Japan combined
Why Cross-border E-commerce (CBEC) Overseas Shopping E-commerce Cross-Border E-commerce
Consumers
Consumers
Retail Retail
Terminal Terminal
Domestic
Logistics
Regional
Cross-Border
E-commerce
Agent
China
Provincial Agent
Government Policy Has Enabled CBEC
Customs
Customs
Border
China National
Distributor
Boned
Warehouse
China
Customs
Customs
Border
Suppliers
Brands
Agents
Foreign Brands
Traditional Cross-Border
Trade E-commerce
Cross–border E-commerce Adds Value to Customers
Fast Reduce import timing for
brands Affordable price for consumers
Matching origination country
Example: Reducing GNC Nutrition and Health
products importation procedure time from 1-2 years Example: Favorable tax policies
to 1 week.
0% tariff charged
1-2 1 30% discount on VAT and Sales tax
year week
s
Traditional Cross- Optimized postal tax
commerce border E-
commerceChinese Cross-border consumer size has reached 100 Million
in 2018
2016-2020 Chinese Cross-border consumer size and prediction
Consumer（Million）
211
149
101
65
41
2016 2017 2018 2019E 2020E
Data Source：iiMedia ResearchHigh shopping frequency of Chinese CBEC consumers
2018 Chinese CBEC consumers 2018 Chinese CBEC consumers
shopping frequency monthly spending
once a below ￥500 24,3%
19,1%
week
once a ￥500-￥1000 27,7%
month 41,0%
￥1001-￥3000 26,0%
once a
27,8%
quarter
￥3001-￥5000 13,30%
once a
12,1%
year
Above ￥5000 8,70%
Data Source：iiMedia ResearchCBEC has become the first choice for brands entering Chinese
market
Mainly sales channels for oversea Y2018 China’s online Cross-
retailers in China border shopping channels
Offline store 35% CBEC Platform 84%
China's E-
32%
commerce platform Global E-commerce 67%
Global E-commerce
18%
supplier Purchasing Agent 27%
Online shopping
15% International suppliers
mall 21%
homepage
Data source：Frost&Sullivan&Azoya Consulting《The Chanece of CBEC Market》，Deloitte ResearchPA R T. 2 NetEase Kaola – the Leading Cross-border E-commerce in China
NetEase Overview
Founded in 1997 and listed in NASDAQ since 2000, NetEase, Inc., is a leading
China-based internet technology company that develops and operates some of
China's most popular online PC and mobile games, runs one of the largest and
fastest growing Cross-border and private label E-commerce businesses in China
and provides comprehensive internet services including online advertising,
innovative businesses and others.A Brief introduction of the NetEase Group
• NetEase has been listed in the Forbes Asia’s
2018 Fabulous 50, the fourth year to be included
since it first entered the list in 2015.
• In Q4 of 2018, the net income of NetEase
reached USD 2.9 billion, with an annual growth
of 35.9%. The net income of NetEase in 2018
reached USD 9.8 billion.NetEase Key Business
PC & Mobile Games E-commerce
Leading provider and operator of self-developed Leading service provider of Cross-border and
PC and mobile games to internet users in China; private label E-commerce through NetEase Kaola
licensee of leading games by Blizzard and Yanxuan. Both platforms offer access to cost
Entertainment and Mojang AB (a Microsoft effective, high-quality and trustworthy products and
subsidiary). they are the go-to platforms for the rising middle-
class consumers in China.
Internet Media Innovative businesses and others
Through NetEase News App and other NetEase This segment reflect our heightened focus on
mobile and PC products, our internet media developing key incubated businesses, including live
services provide not only content, but also social video streaming, cloud music, online education, and
communities to our users, creating a massive other cloud application services, among others.
interactive marketing platform for NetEase’s
advertising clients.NetEase Key Products/Services One of China’s biggest internet/mobile internet news platforms The world’s highest-earning mobile game publisher The biggest Chinese E- mail platform with over 800 million individual users and 350 corporate users
Abundant Internal Resources from NetEase
Group
Powerful Entry-level Media Platform and Rich Mass Product MatrixE-commerce
• NetEase Kaola and Netease Yanxuan are synergistic components of
our E-commerce business. NetEase Kaola is our platform, and
NetEase Yanxuan is our private-label brand
NetEase Kaola
• Both sites offer access to cost effective, high-quality and trustworthy
products, supported by 1P business model
• Both sites cater towards the rising middle class in China who are
increasingly concerned with the quality and authenticity of products
NetEase Yanxuan
• Our e-commerce business continues to lead the market with strong
growth, while maintaining a disciplined approach to spendingStrong strategic support from NetEase
Group
Data
Strong
strategic Capital
support
Technology
Talent
Brand
User
20+
years of operations
940mm
registered users2
18
years on NASDAQ
$35bn market cap1
1 2
Source: Company information; FactSet, market data as of 8/14/17; Registered email users based on NetEase filing as of 1H17NetEase Kaola is ranked No.1 in Market Share
China’s No. 1 Cross-Border E-commerce
• NetEase Kaola, a 27.1% market share
Platform
• No.1 in the Cross-border E-commerce platforms in 2018
• The 7 consecutive times
Year 2016 Year 2018
NetEase +5.1% 27.1 %
Kaola
16%
27,1…
7,… T-mall +5%
Global 24%
12,3
0%
24% VIP 14% -1.7%
13,… International
12.3%
JD Worldwide
-1.5% 13.2%
Data origin: iiMedia ResearchTrading-up Market in China drives demand for Premium Quality
• NetEase Kaola was established in January, 2015.
Watch &
Accessories Baby
• Categories: baby care, beauty care, clothing, homecare&
Sports &
personal care, healthcare, affordable luxury, digital &
Outdoors Beauty
electronics, global food, sports & outdoors, and watch &
Global Food Clothes &
accessories. Shoes
• More than 5,000 brands from over 80 countries have
Digital & Household &
Electronics Personal
products sold at NetEase Kaola .
Care
Affordable Healthcare
• 3 business models: Self-Operation, Marketplace for PoP Luxury
& Consignment, and Factory to ConsumerKaola‘s Consumer Profile
Gender Structure Age Structure
20% 3%
>50
3%
7% 41-50 7%
9% 36-40 9%
80% 21% 31-35 21%
36% 25-30 36% 80+%
19~35
24% 19-24 24%
2%Kaola’s Competitive Advantages for the Partners
Retail Storage & Industry
Model Shipping Media-based Benchmark
E-commerce
Best payment
Low cost of online
term in China
traffic
China-based bonded
Self-operated
warehouses
Low risk
International shipping
Settlement system Promotional
Advantages AdvantagesKaola’s Comprehensive Direct Sales
Model
Direct sales
Comprehensive Vertical
Marketplace
Comprehensive
Cross-border
+ Comprehensive
direct sale =
direct sale Cross-
border E-commerce
platform
Quality control
Address pain points of
Premium global Supply chain
traditional E-commerce
brands management
Pricing power Cater to demand from
Product variety consumption upgrade
Procurement
Source: iResearch: 2016 China Cross-border E-commerce reportMarketplace Services on Koala • Partners can set up their flagship stores on Kaola • Kaola may provide operation support to the partners • Kaola may provide warehouse and logistic support to the partners • Commissions and fees are competitive
Factory to Consumer on Koala
• Sourcing from the top global ODM manufacturers as their dedicated brands to Kaola
• High quality for cost effective without top brand premium price
• Export to the global distributors and retailers
Listed RMB price divided by 7.53 = EURO
Feather Quilt
Thermal Bottle
Wireless Vacuum
Electric Wheel Bike
Cashmere Scarf
iPhone Charge Line
Makeup Brash Set海外仓干网络规划-全球CFS仓布局
NetEase Kaola’s Warehouse
Korea
UK Netherlands
Germany
France
Japan
Italy
USA China
Hongkon
g
Note ： Australia
Already opened
Will open within this yearDiversified External Resources In China’s Vibrant Environment
Sponsor of The Famous TV Show
Extending Offline Push
• In 2019, an extension of offline push in China.
• 7 stores, in Hangzhou, Shanghai, Zhengzhou,
Chongqing, Chengdu, etc.
• 15 stores estimated in 2019.OUR PARTNERS & SUCCESSFUL CASES Strategic partnership with more than 1,000 top brands and suppliers all over the world.
Our Partners Examples 1
World’s US
World’s top 3 Top US World’s largest professional
World’s leading organic baby food The largest World’s largest Popular Japanese largest food healthcare daily consumption
European personal care daily commodity manufacture skincare brand
pharmacy group producer brand manufacturer
household group producer brand r
World’s largest Popular Inventor of
World-famous Leading Australian World- Popular South Popular US World’s largest
healthcare brand infant nutrition Australian modern infant
high-end brand famous food Korean baby brand nutrition food
product company brand ingredient milk
group comprehensive producer
product group powder
Germany’s 2nd Top Giant
Germany’s largest daily Australia’s largest Leading South Japan’s largest
largest E- European Japanese
commodity supermarket Korean retail E-commerce
commerce group supplier comprehensiv
supermarket chain chain group group platform
e product
companyOur Partners Examples 2:
Largest The largest North
World‘s skincare World’s 5th largest food Denmark’s top European Top US American jam
tycoon & drinks company household brand pharmacy group healthcare brand brand
Japanese pharmacy
healthcare & The largest The largest French
European kids Popular French Japanese Denmark’s leader
personal care in organic products cosmeceutical chain
wear tycoon cosmetics brand electronics seller
tycoon brand
Popular Japanese High-end French Australian professional Top Japanese
skincare brand candy brand skincare brand cosmeceutical brandCase sharing
Joint Promotion - Thailand Latex Pillow
• CCTV & NetEase
− increase the sales of Thailand latex pillow by 466% in 5 months
− improved the economic development of Thailand latex industry
• “Excellent Enterprise Prize for Economy & Trade Promotion”
by the Commercial Attaché of the Royal Thai EmbassyCase sharing
Joint Promotion - US GNC
In 2016,
The number of SKU entering China market
in 1 year ≈ the past 10 years.
In 2017,
NetEase Kaola, the largest sales channel of
GNC GNC in China.
One of the world’s largest healthcare
brands Set up marketing and promotion plans in China.Case sharing
Joint Promotion - Rakuten Japan
• Rakuten Japan • Strategic partner
− Primary E-commerce platform in − Since June 2016, flagship store on NetEase
Japan Kaola
− 40,000 + online shops − 10% + of overseas marketing value in 2018THE FUTURE TREND
The Future Trend
NetEase Kaola’s Purchasing Project in the coming
years
Pledged to procure 20 billion yuan ($3 billion) worth of goods In the future
Europe, America and Japan
Europe
3billion Japan
EUR
2018－2020 500billion
JPY
America 2018－2020
3billion
USD
2018－2020Thank You!
You can also read
