AmCham E-Commerce Roundtable
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1 AmCham E-Commerce Roundtable Considerations and Challenges for your B2C Online Shop Setup Patrick Deloy, Founder & Executive Director Group
2 2 1 Who We Are Our Team and Organization
3 About 3 Group is one of the biggest e- commerce solution providers in Asia, operating offices in Shanghai (China) Hong Kong Ho Chi Minh City (Vietnam) and working with an international team of certified e-commerce experts, technical architects, project managers and developers. is a key solution partner of Magento, Demandware and hybris in China & East Asia.
4 About 4 s expertise is in Custom Development, Integration & Implementation of Demandware Projects Strategic E-Commerce & Online Market Best Practices Consulting Omni-Commerce and Business System Implementation China & Asia E-Commerce Market Localization E-Commerce & Online Market Strategy Consulting 3 rd Party & Business System Integration Custom & Complex Demandware Development China & APAC Localization and Best Practices s 80 e-commerce specialists work with leading brands, multinationals and international retailers on the e- commerce implementation, consulting & support.
5 5 2 E-Commerce in China Considerations & Challenges
6 Site & Sales Models 6 High Phase 1: First Touchpoint Phase 2: Market Entry Phase 3: Expansion Standalone Online Shop Benefit Marketplace Site Marketing Site Low Low Effort High
7 Marketplaces vs. Standalone 7 Standalone E-Commerce Site Platform Store (i.e. Tmall) Positioning from consumers perspective Premium destination Outlet/Clearance channel Customer Acquisition costs High (typically negative marketing ROI in 1st year of operations) Low (typically marketing ROI of 2-4 for spending within Tmall) Customer Loyalty & repurchase rate Medium Low Customer Life-Time Value High Low Predominant price strategy Full price Heavy mark-downs (up to 70%) Integration with POS, CRM, etc. Possible Very limited Short-term sales potential 5-10% of brands e-commerce sales 50-70% of a brands e-commerce sales Long-term sales potential High Medium
8 Marketplaces vs. Standalone Standalone E-Commerce Site Platform Store (i.e. Tmall) 8 Value proposition to consumer Full-product range Inseason products Rich content: better brand history & product experience, games/simulators, etc. Web exclusive products Limited product range Overstock/off-season products Pricing to consumer Full price Promotions & mark-downs Additional benefits for consumers Loyality card/vip card : integrated with POS. Card holders e.g. receive 10% discount online & offline. Additionally collect points for every purchase that can be redeemed for additional discounts/gifts. Special seasonal promos together with Tmall (e.g. Singles Day 11. November day promo, etc.)
9 Marketplaces vs. Standalone 9 Marketplace - Tmall Standalone Fees Amounts Fees Amounts Deposit US$ 20-30,000 Yearly Fee US$ 8-10,000 Setup US$ 25 50,000 + X Hosting (Year) US$ 10,000 Commission 4-5.5% + X Commission (Payment GWay) 1.5-2% Necessary China Business License Necessary ICP License (only for local hosting)
10 Standalone Online Shop Considerations 10 网 商 Language Localization Site UX & Design SNEs & MM Content Delivery / Tracking Checkout Structure Payment Methods Mobile / Responsive Hosting / Server Setup
11 Standalone Online Shop Considerations 11 网 商 Language Localization Localization of textual content (taking into account marketing best practices, local linguistics) Localization of images and visual content Adaption of system messages and s Translation / Adaption of meta info
12 Standalone Online Shop Considerations 12 Adaption of design to China expectations Site UX & Design Adaption of structure and UX to local best practices Adaption of navigation structure, pathways through site Adaption of product pages (image content, description display)
13 Standalone Online Shop Considerations 13 SNEs & MM Content Facebook Twitter Youtube Kaixin, Renren, etc. Weibo Youku, Tudou, etc. Integration of local social networks (Weibo, Weixin, QQSpace, Duoban, Renren, Kaixin etc.) Single-Sign On feature with QQ, Weibo) Integration of social media feedback, reviews and ratings Locally hosted multimedia content (Tuduo, Youku, etc.)
14 Standalone Online Shop Considerations 14 Integration of local delivery service providers Delivery / Tracking Integration of delivery tracking service (e.g. Kuaidi100) Use of table rates or shipping price calculation Integration of order and return management info with OMS
15 Standalone Online Shop Considerations 15 Checkout Structure Adaption of input fields (e.g. name input in single input field, address fields, no separate billing address) Inclusion of location dropdowns (e.g. for provinces, city districts) Input fields for legal invoice details ( fapiao ) One step checkout
16 Standalone Online Shop Considerations 16 Integration of local payment gateways (Alipay, Tenpay, Unionpay, 99Bill etc.) Payment Methods Payment through e-wallet (e.g. Alipay) or directly through bank Payment on delivery Reward points and/or loyalty programs
17 Standalone Online Shop Considerations 17 Mobile template for catalog or with transactional features Mobile / Responsive Mobile template vs. responsive design Desktop & smartphone vs. desktop, tablet & smartphone Taking into account mobile bandwidth limitations
18 Standalone Online Shop Considerations 18 Great Firewall of China slows down connections from outside China Hosting / Server Setup Local hosting requirement: ICP registration (for self-sold items) Competitiveness of hosting market not as high as in western world CDN service recommended within China for certain traffic expectations
19 Standalone Online Shop Considerations 19 For a successful long-term local e-commerce market strategy make sure your structure is solid and scalable, you are completely adapted to the local market and your expectations are aligned. Structure» Have a local entity or at least a local team» Make sure your distribution & fulfillment is set up for growth Adaption» Recognize and implement local specific best practices» Work with a local partner who knows the target market Expectation» Recognize & react to changes & progress in the local market» Be patient for your brand to be known and success to settle in
20 20 FIN Thank you Any questions? The E-Commerce Experts
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