Basic Equation in Cozy Mizoguchi [email_address] / +81-80-1205-8448 -B2C e-C business potentiality / possibility- < Trend Analysis > This is mainly for some scale of company having plan to establish your own EC, or revamp current EC business performance, featuring Entertainment elements. e-Commerce
１ Basic trend in Japanese e-Commerce Cozy Mizoguchi, all rights reserved 2009 1 Size of B2C-EC markets < 2008/ Impress inc. > ・ Food Retails ； 2,510billion 123%↑/ to compared with last year ・ Medical / Cosmetics ： 1,410b 127%↑ ・ Entertainment ； 2,220b 115%↑ ・ Travel / Hotel / Gourmet ； 6,510b 128%↑ 2 % of actual experiences of EC: 82,4% <2009 / Impress, inc> 3 % of potential needs for EC ： 52.4% <2009 / Impress, inc> 4 Actual items / commodities bought via EC <2009 / Impress, inc> ・ Books / Magazines ； 60.1% ・ Apparel / Accessories / Fashion ； 47.5% ・ Travel / Hotel ； 42.1% ・ CD / DVD / Bluray ； 45.4% ・ (Drop shipment kind of) Foods / Beverages / Drinks ； 33,2% -> Where are the growing arena ? ・ Current EC users; 8788 万人 * 39% increasing from 2008 **26% in all net users 3.4b ・ Main clusters ： 18 ～ 24 ages （ 53.3 ％）、 25 ～ 30 ages （ 28.4 ％） ・ Main genre in EC ； 1 Apparel / Fashion （ 61.5 ％） 2 Jewry / Cosmetics （ 23.5 ％） 3 Books ・ CD ・ DVD （ 20.2 ％） 4 Electronics （ 13.2 ％） -> How about China EC market ?
- main device - 2 Uniqueness in Japanese Net Market Cozy Mizoguchi, all rights reserved 2009 Mobile ＞ Ｐ Ｃ -> main stream 1 Growth of Markets 2 Expanding Smart-Phone users finally in Japan 3 Already saturated, dominated by Amazon, Rakuten, in PC-EC fields -> size of markets, 2008 1 Mobile EC: 868.9 billion *119% increased from last year 2 Mobile Contents: 483.5 billion *113% increased from last year
<Appendix -1> *resource from Ministry of Internal Affairs & Communication, 2008 3 - 1 Japanese Mobile EC / Digital Contents Cozy Mizoguchi, all rights reserved 2009 Units; 100 million Units; 100 million RingTone Mobile Contents Mobile Commerce RingTune Game e-Commics Augury Customized-Display others < relevant marketing data >
< relevant marketing data > ■ Male ・ The way to buy commodities, items except Real store: - Male; PC oriented EC - Female: Mobile centric EC <Appendix -2> Cozy Mizoguchi, all rights reserved 2009 3 - 2 Japanese Mobile EC / Digital Contents
Net shopping by PC
Net shipping by Mobile
Never used EC
Net shopping by Mobile
Net shopping by PC
Never used EC
■ Female *resource from MMD research institute, by Update inc. 2008
1 Averagely 50% in all age bracket to access to Web by Mobile *10’s = 80%, 20’s = 70%, 50% in 30’s / 40’s tend to use Mobile as “Web Tool”. 2 Information gathering is the top reason they use mobile mainly. *In addition to mailing, Gathering hobbies related info are very popular. 3 Youngsters less use PC - % of PC usage under 19 = 11.8% - 20’s = 11.9% - 30’s = 24.0% - 40’s = 24.0% - 50’s = 11.8% <Appendix -3> Cozy Mizoguchi, all rights reserved 2009 3 - 3 Japanese Mobile EC / Digital Contents < relevant marketing data > *resource from Ministry of Internal Affairs & Communication, Net rating, etc in 2008
<Appendix -4> - Smart-phone market in Japan - ・ Volume of shipments in 2008: 1.58 million / 168% increase ・ Predicted shipments in 2011: 3.15 million / 200% from 2008 ⇒ Accelerating trend of PC function embedded Mobile ！ Cozy Mizoguchi, all rights reserved 2009 < relevant marketing data > 3 - 4 Japanese Mobile EC / Digital Contents *resource from Yano research institute, 2008 Actual shipments Year to year comparison
Female / 20’s – 30’s Male / 30’s – 40’s Family, Kids Teen, Music fans ＜ Mobile ＞ ＜P C＞ < usage amounts / High > Who are the users to access, actually buy something with Entertainment info / items / services, via internet, by tools? <Appendix -5> Cozy Mizoguchi, all rights reserved 2009 3 - 5 Japanese Mobile EC / Digital Contents < relevant marketing data > < usage amounts / Low >
％ MOVIE GAME E-Learning SPORTS GOURMET ANIMATION HEALTH COMEDY TV drama MUSIC 63.1% 60.7% 53.4% 28.7% 23.3% 19.0% 17.9% 15.5% 7.8% 7.3% *resource from Major record company （２００８） Ringtones, CD/DVD, Artists goods, Fan sites, Concert tickets, etc DVD, VOD, Online reservation to cinema complex, etc CD/DVD, VOD, Character items, Digital contents, etc CD/DVD, VOD, etc Packages, Online game, Character related digital contents, etc CD/DVD, VOD, Character items, Digital contents, etc Team goods, Fan sites, Tickets, etc English learning, etc What sort of entertainment genre are consumers spending? Cozy Mizoguchi, all rights reserved 2009 <Appendix -6> 3 - 6 Japanese Mobile EC / Digital Contents < relevant marketing data >
How can new comers enter into growing e-Commerce fields, but very competitive, some already dominated by such; AMAZON, RAKUTEN? Or What kind of angle is the easiest way to enter into more expectable e-Commerce markets, as EC infra company? Or shops? Cozy Mizoguchi, all rights reserved 2009
１ Appearance of store Visitors can easily recognize your shop? - Lineup / Push what “Hot” commodities are @ your shop! - Effective appeal highly recommendation items by graphics , streaming, etc 2 Polishing up the strengthens What are the merits for users to buy @ your store? - Commodity; any items to buy only @ your shop? - Price; setting up appealing price to compared with competitors? - Settlement: variety of methods users can select? - Distribution: can get purchased items as soon as possible by reasonable ways? 3 Navigation to your store / items Consumers can easily find out your shop, jumping to pages ? - SEO/SEM, Mutual alliances with useful sites, RSS, etc - Recommendation / Personalization based on actual users behaviors, DB, etc 4 Bottom-line of e-Commerce Cozy Mizoguchi, all rights reserved 2009
4 Marketing / DB 1 Items / Services 3 Usability / Visibility 2 Delivery / Settlement < Critical Success Factors for EC > 1) Wide variety of Genre, items OR Original, Premium items 2)# of stocks, 3)Competitive price 3)Special features / Customer privileges 4)Benefits by point system ,etc 1)Free shipping 2)Delivery within 24 hours 3)Delivery on release date 4)Available for picking up @ Convenient stores, etc 5)Line-up many kind of settlements; Credit card, e-Money, COD, etc 1)Useful search function 2)User friendly oriented genre/category 3) Site visibility 4)Site structure 5) UGM function 6)Customer support, etc 1)Users DB 2)Items DB 2)Recommendation 3)Personalization 4)Effective mailing scheme 5)Affilate program, etc How the above factors push e-Commerce forwards? -Possible for Operational -Needs for investments 5 Basic pillars for realizing e-Commerce Cozy Mizoguchi, all rights reserved 2009
e-Commerce Sales = # of Users/Access x Click% x Purchase% x Amounts # of Reachable users # of subscribing to mail # of opening mail # of clicking pages navigation to purchasing page Appealing Merits to buy here 6 Basic equation of e-Commerce Cozy Mizoguchi, all rights reserved 2009 < Basic equation for EC > < Critical Success Factors for EC > Recommendation Encouraging repeat purchases 4 Marketing / DB 1 Items / Services 3 Usability / Visibility 2 Delivery / Settlement How can we pave those for realizing EC as reliable profits ?
< Option for EC strategy based on Pro vs. Cons > By own Alliance M & A Pros ◆ Biz-Dev Matrix ◆ Cons Premise Possible for customizing original infra / service frame, depending fully on our needs Time, Money required Risk for losing business opportunity while developing infra by competitors Importance of accurate direction by Professionals Well organized team including experts Available for starting up EC in short terms Possible for EC based on low costs Diversification with partners Low profitability Less leeway for customizing Required to pave each of operational tasks w/ procedures, regulation Importance of proper direction to partners Difficulty of finding out potential / useful partners Possible for realizing profits once M&A is done Having talented staffs Enabling partners’ resources to maximize Needs to invest $$ a lot Uncertainty for measuring ROI Less remains useful targeting companies Up to promising companies, or not? Realistic ＲＯＩ scenario Effective optimization into group 7 Basic Strategy of executing e-Commerce Cozy Mizoguchi, all rights reserved 2009
Importance of establishing useful / efficient EC business formation with useful partners + step by step approach for realizing EC as new profit line < Needs to set up realistic EC strategy based on CSF of EC > By Own Alliance M & A Items / Services ◆ Biz-Dev Matrix ◆ Delivery / Settlement Marketing / DB Usability / Visibility ◎ ○ some expectation for reality + $$ △ ◎ much expectation for reality + $$ ○ △ less expectation for reality + $$ △ ○ ○ ◎ ◎ ◎ ＊ Cozy Mizoguchi, all rights reserved 2009 8 Matrix of Basic EC Strategy
- Business Action Matrix - From now on, what is the realistic action in EC based on Pros vs. Cons, etc? Online Boutique GMS type of EC Outlets on Online Mall <scenario 1-1> By Your Own ◎ ○ △ Cozy Mizoguchi, all rights reserved 2009 9 Realistic EC business scenario △ Less Possible even If you have enough resources / money, because of less remaining fields, as well as much time required for developing. X <scenario 1-2> Alliances Possible, but Difficult unless you have your own competence, etc <scenario 1-3> M&A Possible, if resources / money are in your hands, matching with strategy <scenario 2-1> By Your Own ○ Up totally to the condition you’ve already developed useful DB, schemes. <scenario 2-2> Alliances Possible, if you have your own competence, such; Unique items, etc <scenario 2-3> M&A Possible, if resources / money are in your hands, matching with strategy ○ some expectation for reality+$$ ◎ much expectation for reality+$$ △ less expectation for reality+$$ △ <scenario 3-1> Open your shop in major online mall Everybody can easily, soon, but never expect to get large scale of profits
- Business Strategy - < Strengths > < Weaknesses > < Opportunities > < Threats > 10 What is your e-Commerce Strategy You should create essential EC scenario based on SWOT analyses, etc !