bart horsten's presentation from horsten international - etradesummit 2014
DESCRIPTION
A lot of European companies look at China as a potential export market or are already struggling today to survive in the extremely competitive Chinese landscape. The continuously changing digital environment in China forces us to re-evaluate our strategy for China and be even more prepared than before. During this session Bart Horsten will give some insights and recommendations about how European SME’s should deal with these new market conditions.TRANSCRIPT
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 1
How to be prepared for the Chinese
digital revolution as a European SME?
Bart Horsten 2 October 2014
Steenweg op Mol 129
B-2360 Oud-TurnhoutBelgium
Tel: +32 (0)14 720275www.horsten.be
Activities
1. China Consulting: advise in doing business
with China, primarily to Belgian SME’s
2. Trading: sourcing & business development
3. Investments: (minority) shareholder in some
joint ventures, always with one or another ‘China
link’
Sino-European platform
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 2
Horsten International NV
• Established in 1996 by Joos Horsten (ex-Janssen Pharma)
• Headquarters in Oud-Turnhout, Belgium
• Two 100% affiliates (in Hong Kong and Xian)
• 9 employees
• Strategic alliances with specialists in different fields and
with business partners
• 100% focus on China
The Chinese World Map
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 3
The Chinese have been doing business in
a certain manner for thousands of years.
Don't even start to think for a millisecond
that you're going to change it
2013: a new government
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 4
China entering a new era
China is still a country ‘in
development’
Not only the speed of
development is different,
also the way of
development
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 5
Position Paper 2014/2015Issued by the European Chamber in China
“The ‘golden age’ for business in China is drawing to a
close. But it may yet be followed by the dawning of a new
era that could be equally rewarding for China and for
foreign investors. However, that positive transition will occur
only if the new leadership remains steadfast and is
courageous in urgently implementing the decisive reforms
outlined during the Third Plenum, without which the
commitment of foreign business to China may start to wane
and, at worst, the economy could be headed for crisis.”
Strategy for China
• Have one! (and probably a
different one from the strategy in other markets!!)
• Take into account China’s new role in the international business playing field
• Choose the right business model (partnerships)
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 6
China: the Dreamplace for
E-commerce!
• The “overlap” between the population on social
media and brand consumers is much bigger than in
the west
• Chinese people are massive creators of content,
while most western people are passive spectators
• Chinese people are very open to new technologies
and experiences
Internet Users in China
111137
210
298
384
457
513
564
618 632
50
118
233
308
356
420
500527
0
100
200
300
400
500
600
700
05 06 07 08 09 10 11 12 13 14 (Q2)
Millions
Internet Users
Mobile Internet Users
47% penetration
52.5% shopping online
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 7
Reasons for e-Commerce Growth
• Weak retail infrastructure & low availability of certain products outside Tier 1 and 2 cities.
• Low car ownership, congested roads and less than ideal infrastructure. Home delivery is more convenient.
• Online payment systems like Alipay lower the risk of online buying; payment only after satisfactory delivery.
• Discounts: most retailers offer products online at significant discounts.
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 8
Alibaba
International B2B
C2C (small businesses)
B2C
(1st & 2nd tier cities)
International B2C
China’s biggest retailers …
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 9
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 10
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 11
Frequency Mobile Shopping
Reasons for M-Commerce Growth
• New means of mobile payment.
• Penetration of smartphones in the
countryside (where few stores are located and
few people own PCs).
• Increase in 3G/4G coverage (40% of mobile
users) & increase in WIFI hotspots.
• O2O tools
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 12
Advertising your products in China
• E-commerce platforms in China are the place
where you merge social media, brand
experience, and transactions.
• Chinese platforms are way better than its
western alternatives: Tmall is better than
Amazon, WeChatt (Weixin) is better than
Whatsapp, Weibo is better than Twitter, etc
The Chinese Consumer
• Young: generation of 25 to 44 year olds
• Perception that foreign brands are better than
Chinese brands
• Growing popularity of the western way of life and
consumption patterns
• ‘Showing-off’ mentality
• Very price conscious (bargaining culture), but willing
to pay more for foreign brands
• Low brand loyalty
• Fast changing consumption patterns and behaviour
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 13
Online Sales platforms
• Website outside China
• Website in China
• 3rd party platform outside China
• 3rd party platform in China
Online Marketing Basics
• Search Engine Marketing (Baidu)
• Localize product & communication
– A Chinese translation is not enough …
– Work with local teams for content creation
• Integrate website with social media
– Build following on Sina Weibo (Awareness) & WeChat
(CRM, Payment)
• Focus on a niche/market segment
China Sidetrack – eTrade Summit October 2nd 2014, Brussels
ChinaTalk / Horsten International 14
AgendaConclusion The combination of China’s
fast increasing middle class
consumers, the digital
revolution at an enormous
speed and Chinese people’s
openness to new
technologies and foreign
brands leads to great
opportunities for foreign
companies to sell its
products in China, but it is
crucial to be well prepared
and find the right partners.