final review
tiantian 123
crossbordere-commerce.pptx
Cross Border – E-Commerce (E-Retail)
MGMT 405
November 14, 2019
Jeff Williamson
Copyright 2019 – All rights reserved.
What is Cross-border E-commerce?
Cross-border E-commerce is a channel that provides the opportunity for consumers in one country (China) to purchase directly from producers/suppliers in another country (USA).
Consumers go online to their store of choice (www.kaola.com or jd.com); view offerings, select products and complete the purchase
The supplier receives the order directly from the store, pick-n-packs the order and labels the order for delivery directly to the buyer (customs is cleared in advance)
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Global E-Retailing 2019 (50% of the worldwide market is in China)
$4 Trillion E-retail market globally
1.5 billion consumers
Cross border retailing estimated to be between $350-$400 billion
18% of total global retail sales
Key players to watch
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Alibaba – China (T-Mall and Tao Bao and Kaola); SE Asia (Lazada)
Amazon.com – U.S.
JD.com – China (JD.com); Thailand (JD-Central); Indonesia (JD-ID)
Tencent – China (Wechat); SE Asia (Shopee)
Google – Promotion, Advertising and Shopping Services (U.S.)
Soft Bank – Japan - Rakuten
Walmart.com (U.S.)
Jumia (Africa)
Cross border Market Size
Cross Border E-Commerce
E-retail has grown from 8.6% of total global retail sales to 13.7% in 3 years
Cross border e-commerce represents 10% of Chinese consumers online purchases
China Cross Border Market for Beauty and Personal Care
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$40 billion in cosmetics and personal care sales in 2018
25% of beauty products were purchased on-line ($10 billion)
15% of all beauty and personal care were purchased through cross-border
Key Segment: 18-35 females (70% of market)
Average cart: $70
Crossborder E-commerce Models
ABC Showcase Market Entry Model- 30- 60-90-180 Day Program
On boarding fast-track- Kaola.com and Wechat- ( 30 days)
Limited brand introduction- Baby and Hand/Body Bundles(30 days)
Live Streaming campaign – Shea Moisture a trusted brand of newborns and new moms for generations (eg- offer some simple slogan) ( 30-45 days)
Develop a narrow influencer program to get input and positive comments from Chinese mothers ( 60-90 day)
Run 11/11 or 12/12 campaign on major platforms
Launch official Flagship Store( Tmall/Kaola)-180 days
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E-Commerce Models
B2B – specialized vendor to customer (non consumer)
B2C - Verticals (E-commerce sites that focus on product market groups)
Fashion & Apparel
Beauty -
Food and Grocery (and restaurant delivery)
Home
Lifestyle
Travel (of course) – booking, kayak
B2C – & Cross Border
Amazon, Alibaba, JD.com, Kaola, etc.
C2C – individual to individual sales - (Tao Bao, Ebay, craigslist etc.)
B2C- Marketplace
E-tailers (traditional retailers extending to online presence) – e.g. Walmart.com, etc.
Cross Border E-Commerce- How it Works
USA Supplier
Cross border Partner
Cross-border Market share China
Market Share of China CBEC - 2018
Sales
Kaola.com T-mall JD.com VIP Xiaohongshu yMatou Mia.com Oth ers 0.26 0.22 0.13 0.12 0.06 0.05 0.03 0.13
Cross border Consumers (China), top segments, benefits sought and buyer behavior
Who are the cross border e-commerce shoppers?
Buyer Demographics
Demographics- 18-35 year olds make up nearly 80% of online buyers
Female buyers are the most active- buying once per month, spending $1500 dollars per year, 15% more than $3000 in 2018.
Millennial shoppers looking to buy for boyfriend/girlfriend- Post-95’s buying growing 80 % year of year, 7 out of 10 of these buyers female
What consumers value from an E-tailer?
Buyer Behavior – info search
Importance and Use of Social Media as an Influencer
Social Media is the most dominant digital advertising modality in China and the World
Marketing Mix Focus
Promotional Tactics & Product Mix 1)price, 2) convenience, 3) selection
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Cross Border E-Commerce Success Factors – Pricing, Products, Promotion and Messaging
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Top selling product on Amazon
Lots of favorable online reviews
Product with established offline marketing channels
Social media buzz and influencers
Search indexing on Baidu.com
Quality and Authentcity
Price and Selection
Live Streaming Campaigns –Social Media – Top influencers can get 15,000 to 20,000 viewers
Modern day version of Home Shopping Network.
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Unique Advantages of Cross Border E-Commerce (CBEC) for Producers/suppliers
Personal Exemption – import duties are fixed at 9.9% for cross border purchases under RMB5,000.
Products do not need to be submitted for product approval and testing in China – (beauty products face requirement to do animal testing in China).
No repackaging or re-labeling required
Position to Consumers as guaranteed authentic products
On boarding requires proof of TM ownership and/or use
Stiff penalties for vendors who attempt to sell counterfeit
Case Studies
Cross Border E-Commerce Case Studies
2016-California Baby finds strong acceptance on Kaola.com ( 1st mover in cross border space-millions in sales within 12-18 months)
Laundress became a household name in China through CBEC in less than 2 years, Introduced brand on www.kaola.com and was selling over $250K/month. Company was recently acquired by Unilever.
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Go To Market Strategy
Go To Market Strategy – Pilot Program Example for Beauty Products into China
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18-24 months
On-Boarding – www.kaola.com, Wechat, www.jd.com, www.Alibaba.com, www.jd.co.th
Promotional Tactics – Live Streaming, Influencers, omni-channel
Leverage Peak Holiday and Shopping Days: Singles Day (11/11); 12/12 and 6/18; Chinese New Year
Product reviews and buyer data will inform 020 strategy
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