Accenture Interactive Accenture Omni-channel Commerce Solution for China Gaining and Maintaining a Competitive Advantage in China s ecommerce Market
Accenture Interactive Accenture Omni-channel Commerce Solution for China: Gaining and Maintaining a Competitive Advantage in China s ecommerce Market It is hardly news that China is the most dynamic ecommerce market in the world. The rapid and dramatic growth of the number of people shopping online and businesses moving online as well as the amount spent using digital channels is staggering. Companies in many sectors are updating their online platforms to quickly capture and expand their piece of the digital pie. The numbers tell a compelling story, filled with promise for retailers and consumer products companies alike: China s ecommerce market may top $175 billion in 2013, 1 nearly doubling in just two years, and is projected to reach $320 billion by 2015, approaching the size of the current U.S. market. RMB China 712.3B United States RMB by 2015 ecommerce Market China already has over 530 million Internet users, and nearly 200 million online shoppers, 2 yet the market has plenty of room to grow, as only 14 percent of the population shops online. 712.3B by 2015 Internet Users Online Shoppers Total Population 4.3% The pace of ecommerce adoption in China is also unprecedented; it took 4.3% nearly a decade China for online shopping United penetration States to reach 4.3 percent in the United States (between 2001 and 2011), yet China reached that plateau in just four years. 3 0 1 2 4.3% Online Shopping Penetration 0 China United States 1 2 3 4 5 6 7 8 9 10 RMB 712.3B by 2015 Accenture research indicates that the market size of mobile payment in China will increase at an annual average rate of 76%, reaching RMB 712.3 billion (about $116B) by 2015. 4 2 0 1 2 3 4 5 6 7 8 9 Time (Years) 10
Accenture Omni-channel Commerce Solution for China The bottom line is within a decade China s ecommerce market could be larger than the existing markets in America, Britain, Japan, Germany and France combined. 5 Given this explosive growth, it is not surprising that multi-national companies want to develop a winning presence and secure a competitive position in this critical market. Yet, succeeding in ecommerce in China requires companies to understand and overcome several unique user behaviors and market challenges. For example, most online shoppers use third party payment providers such as Alipay and Shenzhen to complete online purchases because the credit system is less mature in China than in the West. This adds a layer of complexity to websites and mobile apps. Similarly, although China s consumers have taken to social media quickly, the sites they use such as Ren Ren or Weibo are local or regional, not global platforms like Facebook, so social selling strategies need to reflect those audience preferences. Finally, although China s consumers and customers like Western brands, many access them through local online retailers and major ecommerce sites such as Alibaba or Taobao Marketplace which have developed a much stronger following than branded sites. 6 In summary, many digital tactics developed and successful in the West do not guarantee a similar reaction in China. Rather, newentrant, multi-national companies need to tailor their offerings specifically to the Chinese market, which over the last few years has evolved into a dynamic, omnichannel retail environment. Many retailers and consumer-facing companies need to assess the need for traditional and digital channels, and then develop a strategy to integrate web stores, mobile apps, and brickand-mortar stores. Companies also need to have strategies to differentiate themselves in digital malls such as Alibaba s TMall. The development, launch and ongoing efficient integration of these multiple channels require both superior customerfacing and back-end functionality supported by the right technology and assets. Retailers and consumer products companies need capabilities in critical areas such as Web Content Management, Order Management, Promotion and Pricing, Customer Relationship Management (CRM) and Marketing, Warehouse and Fulfillment, and Customer Service and Contact Centers. Given the fast growth of the market companies need to move quickly. So instead of trying to build their own omnichannel platforms, smart companies are choosing to focus on what they do best building and expanding their brands and leverage providers to acquire or borrow the requisite capabilities to launch, scale and maintain an agile, efficient and costeffective omni-channel presence. Accenture and its alliance partners have extensive experience in helping companies develop highly customized omni-channel ecommerce platforms that can increase their brands speed to market. Indeed, we offer retailers and companies in China a proven end-to-end solution built with unique functionality tested to be successful in and meet the specific characteristics of the China market. Accenture has thus far supported over $100 billion in omnichannel commerce and sales, from hotel reservations booked to consumer products purchased to business-to-business transactions completed, and is currently helping global brands such as Lacoste and PUMA expand their presence in China. 3
Accenture Interactive A Bit of France to China: How Accenture Helps Lacoste Deliver ecommerce Accenture and Demandware, Inc. were chosen by high-end sportswear retailer Lacoste to help the company establish its online presence in Greater China. As the core digital commerce platform, Accenture s solution utilizes Demandware, one of several leading ecommerce providers with whom we collaborate. Accenture is responsible for designing and building Lacoste s online store and managing the operations of its online business in China, providing technology support, back office services, integration with microsites, customer services, logistics payment services and social media networks. This allows Lacoste to focus its energies on brand and marketing activities. Accenture was selected in part because of its track record of both navigating the legal and cultural challenges related to launching online businesses in China, and delivering quality experiences to Chinese consumers online for other brands and businesses. 4
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Accenture Interactive Maximizing Your Brand Presence in China Our China solution is grounded in Accenture s proven omni-channel capabilities and integrates leading ecommerce technologies from our alliance network. It also meets customer desires for a satisfying omni-channel shopping and service experience. Our robust end-to-end solution meets retailers and consumer products companies requirements for reliable, efficient front-end capabilities and back-end services and operations in areas such as supply chain and customer care. We also support micro-sites, such as those on TMall from Taobao. Our development and hosting of micro-sites extends the reach and impact of retailers and companies investments in online properties, while remaining connected to and leveraging our back office capabilities described below (see Figure 1). Figure 1: Accenture Omni-channel Commerce Solution for China Framework Customer- Centric Front-end Capabilities Merchandising & Site Management Digital Platform & User Experience Optimization Customer Care/ Call Center Complete Back-end Support CRM & Marketing (including Customer Insights & Segmentation) Supply Chain Management Finance & Administration Support 6
Accenture Omni-channel Commerce Solution for China Customer-centric Front-end Capabilities Merchandising & Site Management On the front end, the solution provides indepth merchandising and site management capabilities, from content and catalog management to pricing and promotion. We augment these digital production capabilities with support in content concepting and creation, such as photo shooting, as well as translation. The result is a web presence with the look, feel, and content that resonates with and satisfies Chinese customers. A recent study by the Acquity Group 7 identified major differences in the web sites that appealed to Chinese and Western users, underscoring the need to customize and test prototypes before launching sites standard operating procedure by Accenture s China team. The solution marries compelling merchandising content to high-quality pictures, videos and even technically sophisticated animation. Digital Platform & User Experience Optimization Our solution leverages proven ecommerce functionality to offer customers an information-driven online shopping experience that includes advanced search and browsing functionality, personalization capabilities, and easy-to-use shoppingcart purchasing processes. The solution supports mobile devices and integration points for local social sites that can guide purchasing decisions. Our search engine optimization and management service helps clients significantly increase and sustain high-volume website traffic by maximizing their site visibility. Customer Care / Call Center Customer care plays a critical role in the solution s front-end operations. Our solution comes integrated with local call center providers (e.g. 800 teleservices) that offer peace-of-mind customer service, including accommodating incoming queries and gathering feedback that can help companies innovate, sustain, and increase customer satisfaction. In addition, as part of the service, the center efficiently and effectively handles claims and returns. Taking ecommerce to the Next Level for PUMA China Global Sportlifestyle company PUMA decided that the fastest way to take its e-commerce business in China to the next level was to launch a new store in China s largest and fastest growing online retailer JD.com. They then determined that the best way to do that was to select Accenture to provide comprehensive digital marketing services, including store design, store build and deployment, store campaign design and execution; and third-party partner management. The PUMA JD e-store was successfully launched in less than three months from project kick-off until the first item was sold on the PUMA JD.com marketplace site. Through an on-going marketing services deal, Accenture Interactive team will manage and help aggressively grow PUMA China JD.com s e-store over the next few years by leveraging our Accenture Omni-channel Commerce Solution for China capabilities and team. An attractive revenue-sharing commercial model gives PUMA greater confidence in our commitment towards the success of their e-store, and we will continue every day to bring our brightest and most creative ideas to managing and growing PUMA in China. Complete Back-end Support CRM & Marketing On the back end, our China solution provides comprehensive and relevant marketing support through our CRM and other marketing capabilities. For instance, our target market definition process gives companies a thorough understanding of who their customers are in China and how to connect with them. Website and campaign performance is constantly measured using analytics for continuous improvement regarding campaigns -- from brand awareness, affinity and relevance to sales, conversion, and market effectiveness. In addition, marketing campaigns are efficiently managed to reduce campaign cycle times and maximize marketing return on investment (ROI). Clients also are aided in developing innovative loyalty programs that will be relevant to Chinese consumers and help to retain them as loyal customers. Customer Insights & Segmentation As part of the solution s target-market process, we leverage intuitive customer insight analysis to further identify key segments within target markets, helping to enable companies to develop and implement strategies aligned with the specific needs of customers. Supply Chain Management The solution provides end-to-end supply chain management, overseeing all merchandise orders and reservation needs with responsive and efficient processes. Our order management system is a hosted service that includes centralized order oversight across all front-end ecommerce sites. We also work with recognized third-party providers in terms of warehousing, shipping and delivery that offer distinctive capabilities, ensuring the best fit for a company s business. These capabilities also include handling reverse logistics relative to returns and refunds, as well as providing fraud management. Finance & Administration Support Companies are supported by a full range of finance and administration capabilities, including billing; accounts receivable and accounts payable processes; taxation management; returns and refunds; and analytical and managerial reporting. 7
Accenture Interactive Generating Value by Simplifying Omni-channel Commerce The Accenture Omni-channel Commerce Solution for China offers retailers and consumer goods companies a reliable, cost-effective end-to-end suite of capabilities from which to launch new online channels. In addition, it strikes the right balance between standardization and customization, and provides the foundation for continuous innovation needed to respond to evolving customer needs and intensifying competition. The combination of our capabilities and functionalities generates ongoing value for companies in four distinct ways. 1 Time and Labor Saving Our localized framework and base solution eliminate the need for companies to spend additional time and effort to create and tailor an entirely new local marketspecific solution. In addition, having this localized framework avoids the risk of overlaying existing technology platforms used in other markets that may not apply to China. By taking advantage of our platform, companies can reduce launch time by 10 to 30 percent compared to a system produced from the ground up. 2 Reliable and Scalable Solution Our functionality and systems are designed and operated to meet high quality and security standards. They are powered by leading ecommerce platforms and designed as a flexible, scalable solution that gives companies the ability to customize sites that meet specific local market needs; expand geographically to accommodate multiple market expansion; add functionality; and enable the management of a wide range of diverse micro sites. 3 More Client Control Over Merchandising Content The content management system is easy to use, empowering non-it business personnel with more control of day-to-day merchandising refinements. This allows a more dynamic, personalized user experience and minimizes the need for internal IT support to affect changes. Clients have greater latitude to configure and launch promotions; customize content; engage in active merchandising; and pursue A/B testing across areas such as website development and marketing. This enables companies to be more agile and innovative in their response to rapidly changing consumer tastes and buying preferences. 4 Predictable and Lower Cost The solution operates on a full SaaS technology platform that provides users with predictable, transparent pricing with no hidden costs. This includes an all-in-one pricing plan that comprises hosting, application maintenance, a content delivery network, ecommerce applications for analytics, and store performance measurements. Finally, our solution generally carries significantly lower maintenance costs. Accenture s solution offers Lacoste the ability to quickly reach millions of Chinese consumers, and provide them with a quality and secure online experience. When we looked at doing this work ourselves, the estimates were that it would take 12-14 months to get off the ground. Working with Accenture means we ll be able to reduce the launch time frame to five months. Sébastien Fayet, Head of Digital at Lacoste 8
Accenture Omni-channel Commerce Solution for China A Proven Omni-channel Platform Delivered and Managed Seamlessly Many organizations look to Accenture for its omni-channel commerce experience, and with that trust they gain access to a unique combination of skills and assets. These range from innovative original research and consulting expertise in every major sector and key enterprise function, to the full range of technology expertise, to distinctive digital services such as mobility solutions, social media optimization, Web analytics, and digital production and content management. The Accenture Omni-channel Commerce Solution for China is implemented by a dedicated team consisting of local and global professionals, who provide digital consulting and web-related IT service in China based on robust knowledge and experience. In China, Accenture has a team of over 60 people specializing in ecommerce who are supported by another pool of 600 people also in China. In our Shanghai and Dalian delivery centers, for example, we have hundreds of team members working on digital and web-related projects. The team has deep experience in Web and ecommerce in China, not only in technology implementation, but also in business process, Web analytics, front-end optimization and growth strategy. Our team is structured to allow some members to evaluate the entire ecommerce experience and service delivery, while others focus on different areas of ecommerce important to China consumers and customers such as front end presentation, or third party logistics or payment. This approach enables us to deliver both the big picture and the specific capabilities clients need to succeed through ecommerce in China. Accenture has been active in the Greater China market for 20 years, and serves more than 100 clients, 80 percent of which are local companies. Accenture has multiple office locations with more than 8,400 personnel in China. This includes consulting offices in Hong Kong, Taipei, Shanghai, Beijing, Guangzhou, and business process outsourcing and technology delivery centers in Shanghai, Dalian, Guangzhou and Chengdu that are part of the Accenture Global Delivery Network. Our China team leverages the global capabilities of Accenture Interactive, an Accenture business unit with more than 5,000 professionals helping the world s leading brands drive superior marketing performance across the full omni-channel customer experience. To support our regional teams, Accenture Interactive provides a comprehensive suite of contemporary marketing services, software and assets that cover: Marketing Strategy Marketing Analytics Marketing & Media Optimization Experience Management Social Media Content & Campaign Management ecommerce & Web Development Marketing Operations Finally, our team is supported by recognized third-party alliances, from companies like Demandware, hybris and others that provide front-end capabilities, to fulfillment companies like Cargo, Kerryeas, Itochu, and 360Buy in the areas of warehousing, shipping, and logistics. Our goal in developing our alliance network is to provide a high level of proven and distinctive capabilities and service to companies across China s tier one to tier three cities. 9
Accenture Interactive Accenture Global Delivery Network 10
Accenture Omni-channel Commerce Solution for China Realizing the Promise of China s ecommerce Market Today companies, whether local or multi-national, have an unprecedented opportunity to take advantage of China s explosive ecommerce growth. Doing so will require robust strategies, deep market insight, and reliable, scalable technology to respond to the rapidly evolving needs of Chinese consumers. China s online shoppers want an omni-channel experience that allows them to find the right merchandise at the right time and at the right price, and they need payment options, services, information, and access to social media to enhance their shopping experience. The Accenture Omni-channel Commerce Solution for China can help companies achieve these goals efficiently and cost effectively. Our end-to-end solution integrates best-of-breed technology and functionality that is reliable, scalable, and implemented and maintained by a proven team with deep, local China-market experience. Companies are looking to capitalize on China s highly promising ecommerce market, and we can help deliver. References 1 New Chinese E-Store Caters to Expats in China, Supports Payments in Bitcoin, techchinasia.com, April 12, 2013, http://www.techinasia.com/chinese-site-iwannabuysupports-bitcoin 2 Ecommerce in China: How the World s Biggest Market Buys Online, mashable.com, May 20, 2012, http://mashable.com/2012/05/20/ecommerce-china 3 iresearch E-commerce Decade Review and Trends, 2012. 4 Accenture Seamless Retail Research China, 2013. 5 E-Commerce in China: The Alibaba phenomenon, The Economist, May 23, 2013. 6 E-Commerce in China: The Alibaba phenomenon, The Economist, May 23, 2013. 7 What Works in China?, a 2012 research report published by The Acquity Group, citing a study that it conducted with the Design and Usability Center at Bentley University near Boston. Acquity, a leading digital marketing and services firm, was acquired by Accenture in June, 2013. 11
For more information about the Accenture Omni-channel Commerce Solution for China, please contact: Patricio de Matteis Accenture Interactive Managing Director, Asia Pacific patricio.de.matteis@accenture.com Jason Chau Accenture Interactive Managing Director, Greater China jason.h.chau@accenture.com Eric Mestre Accenture Managing Director, Consumer Goods & Services eric.mestre@accenture.com Christoph Loeffler Accenture Interactive Managing Director, Omni-channel Commerce christoph.r.loeffler@accenture.com Yew Hong Koh Accenture Managing Director, Greater China Retail Lead yew.hong.koh@accenture.com About Accenture Interactive Accenture Interactive helps the world s leading brands drive superior marketing performance across the full omni-channel customer experience. Working with over 5,000 Accenture professionals dedicated to serving the marketing function, Accenture Interactive offers integrated, industrialized and industry-driven digital transformation and marketing solutions. Follow @AccentureSocial or visit accenture.com/interactive. About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 275,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com. Copyright 2013 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks. Information regarding third-party products, services and organizations was obtained from publicly available sources, and Accenture cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. The views and opinions in this article should not be viewed as professional advice with respect to your business.