www.kwm.com |
WHY CHINA IS
January 2014
KING & WOOD MALLESONS
Sydney and Melbourne
RELEVANT
www.kwm.com |
THE CHANGING
FACE OF CHINA
www.kwm.com |
SHANGHAI
1987
www.kwm.com |
SHANGHAI
2013
www.kwm.com |
Shanghai Subway 1995 – 16.1 km
Shanghai Railway Station
Jinjiang Park
www.kwm.com |
Shanghai Subway 2010 - over 420 km
www.kwm.com |
Shanghai Subway 2020 - over 877 km
www.kwm.com |
NEW YORK
USD 78.2 BILLION
SHANGHAI
USD 114.5 BILLION
www.kwm.com |
“To Get Rich is Glorious”
Deng Xiaoping
 Retail sales increasing 18% annually
 Rapidly increasing GDP per ...
www.kwm.com |
China’s Single’s Day which is on 11th November
is the hottest online sales day of the year
CHINA VALENTINE’S...
www.kwm.com |
On 11th November 2013 Taobao sold:
RMB
35,000,000,000
www.kwm.com |
6
CHINA 2015
GREAT LEAP
FORWARD
 International retailers are
increasingly 1) considering China
as a market ...
www.kwm.com |
AS AN
INVESTOR/COLLABORATOR
13
For many the only way to be really successful in China is to work with Chines...
www.kwm.com |
BIGGEST MISTAKES
14
www.kwm.com |
MISTAKE 1: NOT KNOW YOURSELF
15
Think about your company. Think about your resources. Ask
yourself the follo...
www.kwm.com |
Over 150 cities with population of at least one million
Paris
11.7 million
Guangzhou
12 million
London
8.5 m...
www.kwm.com |
• Expanding beyond Shanghai and
Beijing
• HUGE customer base in 2nd and
3rd tier markets
• Lower costs – lea...
www.kwm.com |
MISTAKE 3:
FAIL TO REGISTER TM
If a Pirate registers “your trademark” then:
You may be sued for infringement...
www.kwm.com |
“People’s way of thinking is a
battlefield. If we do not occupy
it, our enemy will.”
Mao Zedong, the most in...
www.kwm.com |
CHINESE NAME MATTERSCan You Strengthen a Foreign Brand Identity with a Chinese Name
• 3,580,000
• 17,500,000...
www.kwm.com |
WHY CHINESE NAMES ARE
IMPORTANT IN CHINA
伟哥 (“Strongman”) vs 万艾可 (wan ai ke)
20,500,000 hits 2,150,000 hits
...
www.kwm.com |
WHY CHINESE NAMES ARE
IMPORTANT IN CHINA
Drug for erectile
dysfunction
Product of current owner of trademark...
www.kwm.com |
E-COMMERCEThe biggest booming sector
23
MISTAKE 5: E-COMMERCE
NOT AS A PRIMARY
 E-COMMERCE IS BOOMING IN CH...
www.kwm.com | 24
CHINA E-COMMERCE = ALIBABA
E-Commerce in China is dominated by the
Alibaba Group. Unlike the West, Chines...
www.kwm.com |
CUSTOMER
China’s leading
on-line payment
platform. Has over 600
million registered accounts
and proceeds ove...
www.kwm.com | 26
ALIBABA AT A GLIMPSE
 Founded in 1999, headquartered in
Hangzhou
 Ma (Jack) Yun is the Founder, Chairma...
www.kwm.com | 27
TAOBAO vs. TMALL
Taobao is the largest consumer-to-consumer
online shopping platform in China. The focus
...
www.kwm.com | 28
TMALL STATS
 By using Taobao’s
infrastructure and payment
system Alipay, users are
familiar with all ser...
www.kwm.com |
 Tmall is currently China’s most popular B2C
platform. Any product search performed within
the Alibaba fami...
www.kwm.com |
UNDERSTANDING TMALL
Perceived downsides include:
FLAGSHIP
STORE
Owner of the store must be
formal or exclusi...
www.kwm.com |
COSTS AND FEESAnd other requirements
 Deposit of RMB 150,000 for Multi-brand stores
 Deposit of RMB 100,00...
www.kwm.com |
DRIVING TMALL
TRAFFIC
32
 Organic search platform that will
link to highest selling products
 Paid marketi...
www.kwm.com |
FOREIGN BRAND OWNERS
33
Tmall is actively trying to recruit foreign brands to its platform
 Tmall understan...
www.kwm.com |
HOW TO GET ONLINE
1) Must be registered and licensed in
the PRC. Must have a trademark in
Chinese characters...
www.kwm.com |
10
Foreign retailers have already made headway
into China without any directed presence. One
client had over...
www.kwm.com |
14
A big loser will likely be the traditional department store –
unless they have a flagship department stor...
www.kwm.com |
IMPORTANCE OF A PHYSICAL STORE
You still need a showroom
37
BRAND RECOGNITION
 Physical stores serve as a s...
www.kwm.com |
ADDING BRICKS TO THE CLICKS
HOW ANGRY BIRDS WENT FROM ONLINE GAME TO PHYSICAL RETAILER
 Originally created ...
www.kwm.com |
MISTAKE 6: REAL ESTATE
 For most e-commerce not enough – also need physical
presence
 Stores increasingly ...
www.kwm.com |
SUMMARYMain takeaways
 China’s Retail market is booming. While the
methods are changing (moving towards 2nd...
www.kwm.com |
PRC EXPERTISE
Not only has our team possess the expertise in China, we also
understand the Chinese consumer ...
www.kwm.com |
This graphic indicates the combined power and capability of the King & Wood Mallesons network.
KWM WORLDWIDE...
www.kwm.com |
KWMRETAIL
MARK SCHAUB
Partner
Shanghai
T +86 21 2412 6003
schaub@cn.kwm.com
Mark specializes in foreign dire...
www.kwm.com |
KING & WOOD
MALLESONS
retail.pt@cn.kwm.com
11. Operational Primer
12. Operational – Leases
13. Operational –...
www.kwm.com |
www.kwm.com |
KWM GLOBAL NETWORK
Asia
Beijing
40/F, Tower A, Fortune Plaza
7 Dongsanhuan Zhonglu, Chaoyang
B...
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Australia ecomm retail speech january 2014 king & wood mallesons mark schaub

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Mark Schaub - King & Wood Mallesonsn
Mark, a Shanghai based partner at King & Wood Mallesons will lead a spirited discussion on the retail opportunity in China. He has been based in Shanghai for 20 years and specialises in retail.

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  • General Page|Top Intro
  • General Page|Top Intro
  • General Page|Top Intro
  • General Page|Side Intro
  • Useful Slide|KWM
  • Useful Slides|Office Contacts [ White ]
  • Australia ecomm retail speech january 2014 king & wood mallesons mark schaub

    1. 1. www.kwm.com | WHY CHINA IS January 2014 KING & WOOD MALLESONS Sydney and Melbourne RELEVANT
    2. 2. www.kwm.com | THE CHANGING FACE OF CHINA
    3. 3. www.kwm.com | SHANGHAI 1987
    4. 4. www.kwm.com | SHANGHAI 2013
    5. 5. www.kwm.com | Shanghai Subway 1995 – 16.1 km Shanghai Railway Station Jinjiang Park
    6. 6. www.kwm.com | Shanghai Subway 2010 - over 420 km
    7. 7. www.kwm.com | Shanghai Subway 2020 - over 877 km
    8. 8. www.kwm.com | NEW YORK USD 78.2 BILLION SHANGHAI USD 114.5 BILLION
    9. 9. www.kwm.com | “To Get Rich is Glorious” Deng Xiaoping  Retail sales increasing 18% annually  Rapidly increasing GDP per capita from GDP PP of USD 419 in 1992 to USD 4382 in 2012  China is moving from export led economic model to domestic consumption model  Taobao China’s No 1 online retailer sells 50,000 items per minute  China surpassed Japan in 2011 as world’s 2nd biggest economy  On 11 November 2012 Taobao sold USD 3 billion in a single day AS A MARKET
    10. 10. www.kwm.com | China’s Single’s Day which is on 11th November is the hottest online sales day of the year CHINA VALENTINE’S DAY Taobao’s sales during the 24 hours of the 11th November developed as follows:  2009 Taobao sales RMB 100,000,000  2010 sales RMB 936,000,000  2011 sales RMB 5,200,000,000  2012 Taobao sales RMB 19,100,000,000
    11. 11. www.kwm.com | On 11th November 2013 Taobao sold: RMB 35,000,000,000
    12. 12. www.kwm.com | 6 CHINA 2015 GREAT LEAP FORWARD  International retailers are increasingly 1) considering China as a market “sell from the source”; and 2) sourcing product in China  Recent trip to UK a number of retailers intend to use PRC to do fulfillment for Australia as for premium product the consumer experience waiting for 4-5 weeks in unacceptable  To date China’s large e-comm giants have concentrated solely on domestic market - one e-comm client has started work on English site and global sales strategy  Imagine if Taobao/T-mall come to Australia 6 AS A COMPETITOR
    13. 13. www.kwm.com | AS AN INVESTOR/COLLABORATOR 13 For many the only way to be really successful in China is to work with Chinese cash, contacts and operational know how to build their brand  When China first opened to foreign investment in the early 1990’s, many foreign investors rushed into China with cash and technology for manufacturing projects  Today the world has changed – China is not only an importer of capital, but is an aggregator and exporter  Private Equity, both foreign and Chinese, face pressure in finding viable projects – may neatly dovetail with foreign retailers/brand owners who are cash strapped or at least do not have sufficient economic muscle to roll out a retail strategy in a country with more than 150 cities over 1 million inhabitants  For many foreign retailers/brand owners a serious China roll-out would result in 90% of their CAPEX being in China  Many foreign brands even the largest ones rely on strong franchisees  Major Chinese companies like Suning, Calxon, Wahaha, Fosun are looking for co-operation
    14. 14. www.kwm.com | BIGGEST MISTAKES 14
    15. 15. www.kwm.com | MISTAKE 1: NOT KNOW YOURSELF 15 Think about your company. Think about your resources. Ask yourself the following questions:  Have you looked at China?  Do you have the resources to do this by yourself?  Am I prepared?  Do I want a partner?  How do I find the right partner?  Can I trust my team?  Do I have reasonable and achievable plans?  Do I have a cost effective market entry strategy?
    16. 16. www.kwm.com | Over 150 cities with population of at least one million Paris 11.7 million Guangzhou 12 million London 8.5 million Chongqing 28.8 million Dongguan 8.2 million Berlin 3.5 million Madrid 3.2 million 24 New York City 8.3 million Los Angeles 3.8 million Shenzhen 10.5 million MISTAKE 2: CHINA IS SHANGHAI AND BEIJING
    17. 17. www.kwm.com | • Expanding beyond Shanghai and Beijing • HUGE customer base in 2nd and 3rd tier markets • Lower costs – leases, employees, overhead, etc. • Retail rent in 1st tier cities expensive on a global scale, and staff and other costs are still on the rise • Less competition from other retailers • Preferential treatment from local authorities • Easier to build brand awareness BEYOND SHANGHAI & BEIJINGPENETRATING 2nd AND 3rd TIER CITIES
    18. 18. www.kwm.com | MISTAKE 3: FAIL TO REGISTER TM If a Pirate registers “your trademark” then: You may be sued for infringement of trademark for sales within China You may be sued for manufacturing products with such trademark within China Your trademarked products may be seized by PRC Customs You may need to buy back for high price – see Apple purchase of IPAD TM
    19. 19. www.kwm.com | “People’s way of thinking is a battlefield. If we do not occupy it, our enemy will.” Mao Zedong, the most influential person in 20th century China MISTAKE 4: DO NOT REGISTER CHINESE TM
    20. 20. www.kwm.com | CHINESE NAME MATTERSCan You Strengthen a Foreign Brand Identity with a Chinese Name • 3,580,000 • 17,500,000 Louis Vuitton 路易威登 • 29,600,000 • 49,900,000 Chanel 香奈儿 • 8,460,000 • 17,200,000 Hermes 爱马仕 • 819,000 • 3,060,000 Ermenegildo Zegna 杰尼亚 English name Chinese name Run a search on Baidu.com with the brand’s English and Chinese name: The results will tell the answer
    21. 21. www.kwm.com | WHY CHINESE NAMES ARE IMPORTANT IN CHINA 伟哥 (“Strongman”) vs 万艾可 (wan ai ke) 20,500,000 hits 2,150,000 hits 21 Viagra’s Chinese name
    22. 22. www.kwm.com | WHY CHINESE NAMES ARE IMPORTANT IN CHINA Drug for erectile dysfunction Product of current owner of trademark 伟哥 (“strongman”) 22
    23. 23. www.kwm.com | E-COMMERCEThe biggest booming sector 23 MISTAKE 5: E-COMMERCE NOT AS A PRIMARY  E-COMMERCE IS BOOMING IN CHINA  But it is different than the West  EASY TO DO:  Own online presence is straightforward and low cost to establish  Add online presence to physical store  Tmall is an option but should not be exclusive e-com channel  E-COMMERCE LEGAL ISSUES INCLUDE:  IP protection – first-to-file  Privacy/Data protection – No explicit law prohibiting data collection  E-contracts – Advertisements are not offers  PRC E-COMMERCE CHALLENGES:  Payment – COD and 3rd party payment companies  Logistics – Difficulties in 2nd- and 3rd-tier cities  Returns – Expect a lot of returns  Social media – Restricted industry in China  The Chinese consumer – Impatient, Indecisive, prefers COD payment  Competition – FIERCE
    24. 24. www.kwm.com | 24 CHINA E-COMMERCE = ALIBABA E-Commerce in China is dominated by the Alibaba Group. Unlike the West, Chinese E- commerce developed during the same time as the development of Alibaba Group, so Chinese E-consumers are platform specific. Instead of searching for a product on Baidu or Google, most Chinese consumers will go directly to Taobao to conduct their search; therefore, traditional ways of driving traffic (including Search Engine Optimization) are not as effective in China.
    25. 25. www.kwm.com | CUSTOMER China’s leading on-line payment platform. Has over 600 million registered accounts and proceeds over 11 million transactions per day. ALIBABA DOMINATION BUSINESS One of the most popular B2B marketplaces worldwide. China’s on-line shopping leader. In Dec 2010, had more than 370 million registered users and 800 million listings. Global Alexa Rank* 80th Global Alexa Rank* 97th 14thGlobal Alexa Rank* China Market Share 48.9% China Market Share 49% China Market Share 90.3% Global Alexa Rank* 62nd China Market Share 48.5% Dedicated B2C platform. More than 30,000 Chinese and international brands *As at Dec 2011 CUSTOMER BUSINESS
    26. 26. www.kwm.com | 26 ALIBABA AT A GLIMPSE  Founded in 1999, headquartered in Hangzhou  Ma (Jack) Yun is the Founder, Chairman, and CEO  2012 revenue = RMB 24 billion  24,000 employees  In 2012, facilitated more sales (RMB 1.1 trillion) than eBay and Amazon combined  Plans to open traditional brick and mortar retail outlets in partnership with Chinese real estate company Wanda
    27. 27. www.kwm.com | 27 TAOBAO vs. TMALL Taobao is the largest consumer-to-consumer online shopping platform in China. The focus of Taobao is C2C and it allows the resale of products without any licensing requirements, as long as it does not violate Chinese law. The primary protection for brand owners on Taobao is to prevent infringers from using copyrighted pictures or trademarks. Tmall can be distinguished from Taobao as a dedicated business-to-consumer online shopping platform that restricts its participants to actual brand owners or licensees. Therefore, Tmall is able to assure consumers that they are purchasing an authentic product.  Cannot use misleading words on Tmall such as “Nike-style” shoes.  Tmall controls its vendors and requires them to show their business license, license agreements, and other documents to ensure authenticity.  Taobao searches will include Tmall products, but not vice versa.  Only Tmall flagship stores have the right to buy Taobao banners directing consumers to the store in a Taobao search.  Tmall provides consumer information to store owners for both their own store and their sectors.
    28. 28. www.kwm.com | 28 TMALL STATS  By using Taobao’s infrastructure and payment system Alipay, users are familiar with all services and trust the mechanism  Tmall only accepts verified stores, so there’s a guarantee that products sold online are real  Tmall launched a standalone iPhone app to enter the m-commerce market
    29. 29. www.kwm.com |  Tmall is currently China’s most popular B2C platform. Any product search performed within the Alibaba family including Taobao and eTao will direct customers to Tmall listed products.  If a WFOE already operates a retail store during the establishment, then it can directly become a seller on Tmall without any additional government authorization.  Tmall is more discerning than Taobao - participating merchants are authenticated.  Tmall has 150,000 merchants and 200,000 brands selling to 180 million customers. Many branded suppliers have set up flagship stores on Tmall.  Gross sales for 2010 exceeded RMB 1 trillion, about three times more than its closest competitor, 360buy. Tmall dominates the B2C online retail market in China. TMALL HAS RUN SINGLES DAY SALE IN PAST FOUR YEARS: 2009 SALES RMB 50 MILLION 2010 SALES RMB 936 MILLION 2011 SALES RMB 3.36 BILLION 2012 SALES RMB 19.1 BILLION TMALLTHE VIRTUAL DEPARTMENT STORE
    30. 30. www.kwm.com | UNDERSTANDING TMALL Perceived downsides include: FLAGSHIP STORE Owner of the store must be formal or exclusive representative of the brand SPECIALITY STORE Dealers with distribution rights without geographical restrictions in the Greater China region are eligible to open this type of store “MONOPOLIZED” STORE Merchants with two or more brands within one of TMall’s product categories can open this type of store. Only one “monopolized” store can be held per merchant per product category STORE FORMATS TMALL INSISTS ON ITS STANDARD TERMS AND CONDITIONS; LITTLE ROOM FOR NEGOTIATION.  Concerns as to customer information  Loss of control over branding  Customer experience  Captive retailers/brand owners FRANCHISE STORE Franchisees with rights to distribute licensed product and valid license from Franchisor
    31. 31. www.kwm.com | COSTS AND FEESAnd other requirements  Deposit of RMB 150,000 for Multi-brand stores  Deposit of RMB 100,000 for a flagship store  Deposit of RMB 50,000 for standard store  Technical service fee of RMB 60,000 per year. 50% of the fee will be redeemed by reaching RMB 360,000 in sales and 100% after reaching RMB 1.2 million in sales  Every transaction is subject to a 5% sales commission which is automatically deducted  0.5% Tmall consumer cash-back program in which all Tmall retailers must participate  Contracts are signed and re-signed annually so there are no long term arrangements Costs and fees depend on the type of store and business you decide to open but as a guide: 31 Three Rules of Tmall 1 2 3 Must allow consumers to return products within 7 days (if product is re-saleable) Must provide return shipment within 72 hours of complaint being filed Guarantee that products are genuine. If products are fake – WILL SHUT YOU DOWN!
    32. 32. www.kwm.com | DRIVING TMALL TRAFFIC 32  Organic search platform that will link to highest selling products  Paid marketing through charges per sale, purchasing key words, pay per click, banners.  Tmall special events (Singles Day sales, Christmas sales, etc.).  These events are generally free and only require following certain requirements to participate (Minimum inventory of products, free delivery, etc.)  On a first come, first serve basis
    33. 33. www.kwm.com | FOREIGN BRAND OWNERS 33 Tmall is actively trying to recruit foreign brands to its platform  Tmall understands that foreign brands are at a competitive disadvantage for decision making, especially in regards to special events, which are allotted on a first-come, first-serve basis.  Tmall reserves 10 monthly banners specifically for foreign brand owners. The decision to award these banners is a holistic approach, but the key is the ability to drive traffic to Tmall and promote the Tmall brand along with your own. If you are hosting a large event and are willing to promote your Tmall store at that event, Tmall will be more inclined to provide you one of these banners.  The Flagship stores are intended to also serve as marketing platforms to educate the consumer about your brand along with being a point of sale.  BEING ABLE TO CROSS PROMOTE TMALL IS KEY!
    34. 34. www.kwm.com | HOW TO GET ONLINE 1) Must be registered and licensed in the PRC. Must have a trademark in Chinese characters from the Trademark Office. 2) Apply for enterprise Alipay account and pass seller authentication 3) Sign into online application page at: http://zhaoshang.tmall.com a) Pass the online Tmall entry test 4) Fill in company information online and accept Tmall online service terms, service agreement, and Alipay payment agreement 5) Upload brand logo; the logo must be the same as the one filed with the Trademark Office 6) Post your enterprise qualification and brand qualification to TMall for approval 7) Complete the payment of cash deposit and technology service fee within 15 days 8) List and upload products within 30 days 9) Go live with the store 10) Continue to comply with Tmall’s service standard including 7 days free return/exchange, formal sales receipt, and shopping points promotions
    35. 35. www.kwm.com | 10 Foreign retailers have already made headway into China without any directed presence. One client had over USD 60 million in gross sales without any physical stores, marketing or even a Chinese language website. For retailers who already manufacture in China, it may be more cost effective to retain a surplus of goods and outsource warehouse storage and logistics to 3rd party service providers instead of paying double duty by shipping manufactured goods out of China and back in again. At present many foreign retailers first export goods for sorting overseas – however, some face resistance from Chinese suppliers to adjust the supply relationship. In reality, normally not legal but for commercial reasons (i.e. VAT rebate, transfer pricing, maintain funds outside China, etc.). An initial step is to work with an e-commerce partner. CLICKS WITHOUT BRICKSNOT EVEN HERE & SELLING
    36. 36. www.kwm.com | 14 A big loser will likely be the traditional department store – unless they have a flagship department store coupled with a massive on-line version. An approved Retail WFOE does not need to apply for on-line sales as specific part of business scope. A Retail WFOE with established stores can have online sales via 3rd parties (e.g. Tmall) or via own website. Sales via own website require ICP license from Ministry of Industry and Information Technology (MIIT). Trend will be for many retailers to have flagship stores for customer experience coupled with an on-message online presence and exposure to various portals such as T-Mall or 360. Develop an on-line mindset. View on-line presence as a complement to physical stores, not merely an add-on. 14 BRICKS AND CLICKSMOST FOREIGN RETAILERS WANT SOME PHYSICAL PRESENCE
    37. 37. www.kwm.com | IMPORTANCE OF A PHYSICAL STORE You still need a showroom 37 BRAND RECOGNITION  Physical stores serve as a showroom for Chinese shoppers to test out products and ask questions. Even if they are no longer a point-of- sale in China, a physical presence is still extremely important to control and advertise your brand.  It’s a way to connect the online experience with the real world.  It’s an alternative to being captive on Taobao/Tmall only.  Physical stores in prime locations are similar to commercial advertising on television. Brand recognition decrease drastically when retailers are crammed into the same website. A physical presence allows consumers to distinguish your brand from competitors. MAINTAIN PERCEPTION OF QUALITY  Foreign products are perceived to be of higher quality than local products and a physical store than can provide a “brand experience” can further distinguish your product and maintain the perception of quality.  The physical store can provide a “brand experience” for your customers and help them identify with your brand. Both Apple and Starbucks are extremely successful foreign retailers who have utilized the “coolness” of their brand to create an experience for the Chinese consumer.  The physical store also reaffirms to the consumer that they are receiving authentic foreign products.
    38. 38. www.kwm.com | ADDING BRICKS TO THE CLICKS HOW ANGRY BIRDS WENT FROM ONLINE GAME TO PHYSICAL RETAILER  Originally created as a game for the iPhone  Now, has expanded to clothing, toys and even amusement parks  ROVIO, the developer, expects its China revenue to triple in 2012, including opening a brand store in Shanghai selling licensed apparel and iPhone cases  Planned to open 25 stores in China in 2012  Also opening Angry Bird-themed amusement parks in China in several provinces. 38
    39. 39. www.kwm.com | MISTAKE 6: REAL ESTATE  For most e-commerce not enough – also need physical presence  Stores increasingly concept or experience rather than mere sales  In 1st tier cities premier landlords have leverage  General term for leases (other than hyper-markets or flagship stores) is less than 3 years  In case of a breach of short term lease by landlord there is little practical recourse by tenant  Not uncommon for landlord to put in own similar shop in space afterwards
    40. 40. www.kwm.com | SUMMARYMain takeaways  China’s Retail market is booming. While the methods are changing (moving towards 2nd/3rd cities or e-commerce, China’s retail market is still going full speed ahead.  The importance of E-commerce. By utilizing e- commerce platforms, you can quickly establish distribution networks, and drastically improve your ability to expand to 2nd, 3rd (and beyond) tier markets.  Use Chinese local know-how and cash to roll out Your business will concentrate on brand/innovation, let Chinese partner worry about lease, staff, and local authorities  Keep the corporate DNA intact Your brand will always remain your most valuable asset 40
    41. 41. www.kwm.com | PRC EXPERTISE Not only has our team possess the expertise in China, we also understand the Chinese consumer and the way business is done. Our China expertise goes beyond just legal matters and we can assist you with all aspects of your China. We are the only international law firm that can practice PRC law – we stand by our advice. RETAIL SPECIALISTS We are one of the only firms in China that specialize and focus on retail. We understand the nuances and particular issues affecting retailers and brand owners. This means we can anticipate problems before they arise. We are familiar with franchising, leasing, intellectual property, advertising, and all of the other particular issues specific to the retail sector THE KWM DIFFERENCEWhat sets us apart With our 12 offices across Mainland China and Hong Kong, we can provide you on the ground support wherever you need it ROLL OUT With 12 offices across China we are where you are or plan to be. In addition we have worked on and helped develop successful roll out models for China. MORE THAN A LAW FIRM In addition to quality legal services we are able to provide clients with an all-round solution – we regularly work with e-comm firms; market entry specialists; brand consultants; Chinese investors; developers; local government. Our clients like having our involvement as a sounding board and facilitator.
    42. 42. www.kwm.com | This graphic indicates the combined power and capability of the King & Wood Mallesons network. KWM WORLDWIDE COVERAGE
    43. 43. www.kwm.com | KWMRETAIL MARK SCHAUB Partner Shanghai T +86 21 2412 6003 schaub@cn.kwm.com Mark specializes in foreign direct investment, M&A, outbound investment, compliance, intellectual property and retail. He has advised foreign investment projects in a wide variety of sectors including retail, power, media, internet, renewable energy, transportation, automotive and manufacturing. Transaction sizes have varied from USD 140,000 to USD 1 billion. He is familiar with China issues faced by companies of all sizes and also the issues Chinese companies face as they go overseas. Mark Schaub has been lead counsel for clients in acquisitions, M&A projects, outsourcing, technology licensing, compliance, restructuring, fraud investigations, distribution as well as providing day-to-day corporate advice. He is also the leader of the Retail practice group at King & Wood Mallesons; assisting different retailers and brand owners in setting up their operations in China and dealing with the many legal issues involved with navigating the maze of PRC regulations. Retailers/brand owners our team have assisted include the Kering Group, VF Corporation, Bjorn Borg, Brioni, Coach, Alfred Dunhill, Yihaodian, adidas, Versace, North Face, Kipling, Tesco, Walmart, Bvlgari, JYSK, Sainsbury’s, Loro Piana, Apple, Microsoft, Lotte, Aeon, Grand Optical, Bottega Veneta, Hasbro, Glamour Sales, Chanel, Armani, Alexander Wang, LVMH, Johnson & Johnson, Blackmores, PURE Group, Oroton, MCM and many, many more. Mark has lived in Shanghai since 1993 and has written two books on doing business in China. 43
    44. 44. www.kwm.com | KING & WOOD MALLESONS retail.pt@cn.kwm.com 11. Operational Primer 12. Operational – Leases 13. Operational – Compliance 14. Operational – Privacy 15. Operational – HR 1. Retail Primer – Overview of PRC 2. Market Entry Overview 3. Market Entry – Franchises 4. Roll Out – Expanding into 2nd tier cities and beyond 5. Roll Out – Chinese funding of Retail in China Retail Publications 6. Branding Primer – Branding and Trademarks in China 7. Branding – Why you need a Chinese brand 8. Branding – Common Mistakes by Foreign Companies 9. Sourcing Primer 10. E-Commerce Primer
    45. 45. www.kwm.com | www.kwm.com | KWM GLOBAL NETWORK Asia Beijing 40/F, Tower A, Fortune Plaza 7 Dongsanhuan Zhonglu, Chaoyang Beijing, 100020, PRC T +86 10 5878 5588 Beijing 20/F, East Tower World Financial Center 1 Dongsanhuan Zhonglu Chaoyang Beijing, 100020, PRC T +86 10 5878 5588 Chengdu 22/F, City Tower, 86 Section One, Renminnanlu, Chengdu, Sichuan, 610016, PRC T +86 28 8620 3818 Chongqing 1112 Metropolitan Tower, 68 Zourong Rd, Chongqing, 400010, PRC T +86 23 6371 5199 Guangzhou 55/F, Guangzhou International Finance Centre 5 Zhujiang Xi Road, Zhujiang New Town, Guangzhou, Guangdong, 510623, PRC T +86 20 3819 1000 Hangzhou D Region,12/F Euro America Center, No.18 Jiaogong Road, Hangzhou, Zhejiang, 310012, PRC T +86 571 5671 8000 Hong Kong 13/F Gloucester Tower The Landmark 15 Queen's Road Central T +852 3443 1000 Jinan 4/F, Int'l Business Center, 6 Liyang Ave., Jinan, Shandong, 250002, PRC T +86 531 8901 9600 Qingdao 10/F, Hisense Building, 17 Donghaixi Rd., Qingdao, Shandong, 266071, PRC T +86 532 8579 0008 Shanghai 17/F, One ICC, Shanghai ICC, 999 Huai Hai Road (M), Shanghai, 200031, PRC T +86 21 2412 6000 Shenzhen 28/F, Landmark, 4028 Jintian Rd., Futian District, Shenzhen, 518035, PRC T +86 755 2216 3333 Suzhou 601 Century Financial Tower 1 Su Hua Rd Industrial Park Suzhou Jiangsu 215021, PRC T +86 512 6292 7100 Tianjin 3101 Central Plaza, 188 Jiefang Rd., Heping District, Tianjin, 300042, PRC T +86 22 5887 8700 Tokyo (Japan) 11-28 Sogo Nagata-Cho Building Nagato-Cho 1 Chome Chiyoda-ku Tokyo, 100-0014 T +81 3 3508 5599 Australia Brisbane Level 33, Waterfront Place 1 Eagle Street QLD 4000 T +61 7 3244 8000 Canberra Level 5, NICTA Building 7 London Circuit ACT 2600 T +61 2 6217 6000 Melbourne Level 50, Bourke Place 600 Bourke Street VIC 3000 T +61 3 9643 4000 Perth Level 10, Central Park 152 St Georges Terrace WA 6000 T +61 8 9269 7000 Sydney Level 61, Governor Phillip Tower 1 Farrer Place NSW 2000 T +61 2 9296 2000 Europe Berlin Zoofenster, Hardenbergstraße 27 10623 Berlin T +30 88 71 71 50 Brussels Square de Meeûs 1 1000 Brussels T +32 2 511 5340 Frankfurt Atrium am Opernplatz Bockenheimer Anlage 46 60322 Frankfurt am Main T +49 69 50 50 32 500 London (UK) 10 Queen Street Place London EC4R 1BE T +44 20 7111 2222 Luxembourg 41 Boulevard Prince Henri L-1724 Luxembourg T +352 27 47 56 Madrid Calle de Claudio Coello, 37 28001 Madrid T +34 91 426 0050 Milan Corso G. Matteotti 3 20121 Milan T +39 02 36 57 57 01 Munich Karolinen Karree, Karlstraße 12 80333 Munich T +49 (0)89 89 0 81 0 Paris 92 avenue de Champs Elysees 75008 Paris T +33 1 44 346 346 Middle East Dubai Suite 303, Level 3 Park Place, Sheikh Zayed Road PO Box 24482 Dubai, United Arab Emirates T +97 14 328 9900 North America New York (USA) 42/F 444 Madison Ave New York NY 10022 T +1 212 319 4755 Silicon Valley (USA) 535 Middlefield Road, Suite 180 Menlo Park, CA 94025 T +1 650 858 1285 45

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