AmCham E-Commerce Roundtable

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AmCham

E-Commerce

Roundtable

Considerations and Challenges for your B2C Online

Shop Setup

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Who We Are

Our Team and Organization

1

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About Bluecom

3 Bluecom 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.

Bluecom is a key solution partner of Magento, Demandware and hybris in China & East Asia.

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About Bluecom

4 Bluecom’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

Bluecom’s 80 e-commerce specialists work with leading brands, multinationals and international retailers on the

e-commerce implementation, consulting & support.

E-Commerce & Online Market Strategy Consulting

Custom & Complex Demandware Development

3rd_{Party & Business}

System Integration

China & APAC Localization and

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E-Commerce in China

Considerations & Challenges

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E-Commerce in China

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Site & Sales Models

High Marketplace Site Standalone Online Shop Effort Low Low High B en ef it Phase 3: Expansion Phase 2: Market Entry

Phase 1: First Touchpoint

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E-Commerce in China

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Marketplaces vs. Standalone

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

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E-Commerce in China

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Standalone E-Commerce Site Platform Store (i.e. Tmall)

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.)

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E-Commerce in China

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Fees Amounts

Deposit US$ 20 - 30,000 Yearly Fee US$ 8 - 10,000 Commission 4 - 5.5% + X

Necessary China Business License

Fees Amounts

Setup US$ 25 – 50,000

+ X

Hosting (Year) US$ 10,000 Commission

(Payment GWay) 1.5-2%

Necessary ICP License (only for local hosting)

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E-Commerce in China

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Standalone Online Shop Considerations

网商

Language

Localization Site UX & Design

SNEs & MM

Content Delivery / Tracking

Checkout Structure

Payment Methods

Mobile /

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E-Commerce in China

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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 emails

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E-Commerce in China

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Site UX & Design

 _{Adaption of design to China}

expectations

 Adaption of structure and UX to local best practices

 Adaption of navigation structure, pathways through site

 Adaption of product pages (image content, description display)

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E-Commerce in China

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SNEs & MM Content

 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.)

Kaixin, Renren, etc.

Weibo

Youku, Tudou, etc.

Facebook

Twitter

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E-Commerce in China

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 Integration of local delivery service providers

 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

Delivery / Tracking

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E-Commerce in China

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 _{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}

Checkout Structure

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E-Commerce in China

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 Integration of local payment gateways (Alipay, Tenpay, Unionpay, 99Bill etc.)

 Payment through e-wallet (e.g. Alipay) or directly through bank

 Payment on delivery

 Reward points and/or loyalty programs

Payment Methods

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E-Commerce in China

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 Mobile template for catalog or with transactional features

 Mobile template vs. responsive design

 Desktop & smartphone vs. desktop, tablet & smartphone

 Taking into account mobile bandwidth limitations

Mobile / Responsive

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E-Commerce in China

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 _{“Great Firewall of China” slows down}

connections from outside China

 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

Hosting / Server Setup

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E-Commerce in China

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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

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.

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Thank you

Any questions?

FIN