Cooperation with Global Partners NetEase
Growing Middle Class in China
Fast Growing China E-Commerce Market 649 M Internet Users E-Commerce GMV: RMB 13 Trillion in 2014 2014 Internet Penetration Rate: 47.9% 2014 Growth: 22.6% 361 M Online Shoppers 2014 Online Shoppers Rate: 48.9% B2C GMV RMB 2.8 Trillion in 2014 2014 B2C Growth : 49.7% (N) 3
NetEase Has Been Riding on the Internet Trend in China NetEase founded by William Ding - June 1997 in Guangzhou NetEase listed on NASDAQ stock exchange - June 2000 in the US
NetEase Financials / Annual Revenue, Net Profit and Stock Price Performance
Principal Businesses China s leading Internet technology company China s leading media company China s largest e-mail service provider China s leading game company Many more others Communication Email Service Entertainment Online Games Information Media Commerce Mobile Internet Web Portal E-commerce Applications
NetEase Email Services The leading e-mail service provider in China Over 760 million registered users New Mailbox Master App
China s Leading Game Developer $1.6 billion in revenue in 2014 550 million registered users Hugely popular and long-running MMORPGs No. 1 mobile game in ios App store
Million (USD) China s Leading Media Company An accumulated user coverage of 700 million Strong user stickiness: average user age at 29.4 years old, well-educated, high-income, social backbones Pursuit of product content and taste, strong consuming power Strong word-of-mouth transmission capabilities in consumption 300 250 [ 值 ] The top 10 customers in all category The top 10 customers in skin care 200 [ 值 ] 150 [ 值 ] [ 值 ] 100 50 0 2011 2012 2013 2014 NetEase advertising revenue
More on Mobile: Mobile Apps
Internet + Promoted by the Chinese Gov. Policies in favor of Cross Border e-commerce: 1. The individual belonging goods for cross-border e-commerce v.s. commercial goods for normal trade importation 2. Only Postage tax (average 12%) for cross-border e-commerce v.s. tariff + 17% VAT + Consumption tax (various up to 50%) for normal trade importation 3. No products approval / registration by the China FDA and AQSIQ for cross-border e-commerce v.s. technical barriers by China FDA and AQSIQ for normal trade importation
Process Flow of the Cross-border E-Commerce Importation by NetEase: Imported Goods as Personal Belongings Payment tool
How to Sell by NetEase: Multiple channels promotion + end to end customers interaction Web Portal & inf.channels Email Services Identify Needs Big Data from multiple channels Social Network Services Online Entertainment Generate Needs Promotion via multiple channels Vertical Search: online dictionary Online Payment & Finance Satisfy Needs Global brands,competitive price, better user experience Price-comparing & promotion app Kaola as e-commerce platform Virtuous Cycles Customer Life Value Management: digital service consumption + physical goods consumption
What to Procure from the Global Partners Product Categories on www.kaola.com Partners we are looking for: 1. Brand manufacturers in the 6 product categories 2. Traders / wholesalers / distributors of the 6 product categories 3. Duty free product suppliers 4. Retailers which would like to resell their sourcing to us 5. Owners of the luxury brands in the 6 categories 6. Owners of the inventories of the luxury brands
Why Cooperate with NetEase: Value Proposition to the Business Partners For those already having manufacturing and distribution channels in China: NetEase Kaola is your duty free online channel to China NetEase helps your overall brands portfolio in China If you are new to the China market: NetEase Kaola is your most efficient market access to China NetEase helps your branding with NetEase segmented media channels
Business Model I: Direct Procurement & Export Transaction: Kaola procures from Australian vendors and owns the inventory Kaola outsourced transportation to the vendors or other partners to ship the procurement to its warehouses in the bondedareas in China Kaola clears the import in China Kaola sells the products it imported and sell online to its users in China The Australian vendors guarantee the quality of the products procured by Kaola Branding: Australian vendors products promotion online by Kaola.com on multiple channels of NetEase, and offline promotion by the brand owners. Promotion Campaigns of the Australian vendors products when necessary on the Kaola pages May keep the dedicated virtual areas on Kaola.com for the brands when necessary Might be an dedicated area on Kaola mobile app for the brands when necessary Authorization from the Australian vendors to Kaola.com to sell online in China
Other Business Models Model II: Consignment Trade Australian vendors consign their products to Kaola.com Kaola promotes and sells online to its users Kaola settles with the Australian vendors after the selling Other terms to be further explored Model III: Open Stores on kaola.com Australian vendors their own stores on kaola.com (similar to those 3 rd party stores on Amazon) Australian vendors own their own inventory Australian vendors handle the transportation and exportation Kaola.com supports the Australian vendors to clear the Customs in China when necessary
NetEase Partners Insights Markets Products