ecommerce in asia & china - how to drive profitable growth
DESCRIPTION
Presented at French Chamber of Commerce & Industry event in Hong Kong on Jan 15th, 2014, covering the following: • How the e-commerce landscape and consumer behavior are rapidly evolving in Asia with a special focus in China • What are the opportunities and challenges in building a strong e-commerce business • Design the right e-Channel strategy for your Brand • How to grow e-commerce sales by driving traffic, improving conversion and customer retention?TRANSCRIPT
E-Commerce in AsiaHow to drive profitable growthCharles Chan, Founder & Managing Director of CLEARgoPresented at The French Chamber of Commerce and Industry in HKJan 2014
About CLEARgo
The Brand eCommerce Agency
that delivers eCommerce success for clients
PLANE-Business
Strategy
BUILDOnline Branding, User
Experience & Technology
GROWPerformance Marketing, CRM &
Conversion Optimization
11.11 is a lot bigger than Cyber Monday & Black Friday Sales
*Non-travel (retail) e-commerce spending excludes auctions and large corporate purchasesSource: BCA Research, Alibaba Weibo, Comscore, Bloombery Industries, U.S. Global Investors
U.S. Cyber Monday and Black Friday Sales*Alibaba’s Singles’ Day Sales
In Billions
2009 2010 2011 2012 2013
$1
$2
$3
$4
$5
$6
China is already the #1 online retail market in value & penetration, with momentum that’s expected to continue
The stages of eCommerce varies significantly for different countries in Asia Pacific
• Nascent
– India – Still tiny now (less than 1% compared to China), but expecting rapid growth (over 50% CAGR for next few years)
• Ascending
– China – Already huge in size, and is still growing rapidly
• Mature
– Japan, Korea, Australia – Reasonably large eCommerce markets but growth has slowed down
First, deciding on the eCommerce Channel Model
brand.com mall-operate branded store
authorized online distributionbrand-operate marketplace store
Horizontal and Vertical eCommerce Platforms
Horizontal Platforms
Luxury
Private Selling
Cosmetics Consumer Electronics
Media
Grocery
Fashion
Coach closed its online flagship store in Tmall only one monthafter it opened, and shifted to sell in its brand site instead
Brand Site
The luxury divide on brand site and marketplaces
Official eCommerce presence No Official eCommerce presence
So which channel is right for you?
Brand.com
Brand Operate
Store @ MallMall OperateStore @ Mall
DistributionOnly
Brand Image
Control
Demand Capturing
CRM/Loyalty Integration
Data Ownership
Setup & Operating Cost
Operations Complexity
To Sell in Tmall - Do you have a Chinese entity already?Have you registered and trademarked your brand already?
Tmall now allows foreign brands to setup without local entitiesand sell to Chinese consumers as cross border transactions
Create an eCommerce user experience for China – Information to help customers making decisions
* a typical product detail page in China
Payment methods in ChinaAlipay, China UnionPay, Direct Debit, etcMost people don’t have credit card and are unable to pay non-RMB transactions
“Fapiao” – not just an official invoiceThis is how local Government keeps track of your Value Added Tax (VAT)
Customer Service – Live ChatHotline & Live Chat for both Pre-Sales & Post-Sales is a must in China
AliWangWang is the standardLive Chat platform for Tmall & Taobao
Warehousing, Fulfillment & Delivery A range of domestic and international providersService quality from domestic providers still varies but improving
Amazon Fulfillment Service
In-house vs. OutsourceOutsource some or all aspects of the puzzle
Order & FulfillmentManagement
Merchandising& Inventory Mgmt
CustomerCare
Store Management Marketing & CRM
eCommerceTechnology
In the offline world, it is all about Location, Location & LocationIn the online world, it is all about Search, Search & Search
Get Exposure & Be Found
BrandeCommerce
Directory
Search(SEM/SEO)
DisplayAds
CSEProductSearch
AffiliateMarketing
E-DM
SocialMedia
Key Factors that determine conversions
Overall Site Usability &
Speed
Product Display
(Recommendations)
Pricing & Promotions
In-Site Search & Filters
Product Content
Cross Selling & Up Selling
Checkout Process & Payment
Shipping Fee & Delivery
Time
Cart Abandonment
Product Reviews
Typical Customer Database of an Online Store after a while
Non-Activated Members
One-Off Customers
Churned Customers
RepeatCustomers
BestCustomers
Business Value
Size of your Database
Improving e-Commerce Profit through moving customers to profitable life stages
NewMember(Subscriber)
First Purchase
Repeat Purchases
Best Customers
• On-boarding series• Welcome discount• 1st purchase push• Browse retargeting• Newsletter
• Post-purchaseCross-Sell / Up-Sell
• Browse Retargeting• Repurchase Alert• Newsletter
• Post-purchaseCross-Sell / Up-Sell
• Review Solicitation• Browse Retargeting• Repurchase Alert• Loyalty Update• Member-get-member• Newsletter
• Best customercare & reward
• Loyalty Update• Member-get-
member
• Win-back OfferSeries
Churned
eCommerce Metrics
Traffic Drivers
Cost per VisitQualified VisitsUnique Visitors
Channel Attribution
Conversion
Conversion RateAverage Order Value
Cart Abandonment Rate
Sales
Customers
Customer Acquisition CostCustomer Lifetime Value
RFM (Recency, Frequency & Monetary)
Net Promoter Score
Revenue & Profit# of OrdersInventory Turnover Ratio
Summary
Develop an e-Commerce Channel Strategy1
2
3
4
Understand the Chinese online purchase behavior and habits
Setup a suitable Operations & Organizational Model
Build Traffic, Optimize Conversions, Acquire & Grow Customers
THANK YOUfor your time & attention
For more information, please contact:
Charles [email protected]
+852 9470 6088
http://www.cleargo.com