To be successful in the China e-Commerce market western companies must consider the unique requirements for: Product Presentation, Shopping Experience, Merchant Management, Logistics and Infrastructure.
Marel Q1 2024 Investor Presentation from May 8, 2024
E Commerce Success in China
1. Why can’t successful western e-commerce
websites simply replicate their success in
China?
Bill Kohnen Pacific Rim E Commerce Conference
E COMMERCE SUCCESS
IN CHINA
2. China is the biggest e-Commerce market in the world
Successful western e-Commerce as well as investors
players desperately want to develop business in
China
Notable failures because western companies did not
address fundamental differences in expectations by
customers in China
Bill Kohnen Pacific Rim E Commerce Conference
SUMMARY
4. More vibrant
People important modeling product
Often includes context
See following examples of differences
between Western and Chinese e-Commerce
presentation
Clothing
Computer Accessories
Office Products
Bill Kohnen Pacific Rim E Commerce Conference
PRODUCT PRESENTATION
8. Immediately presents interesting content (see following
example)
Access to new and unique products
Detailed information of features for comparison
price and features
Relevant product descriptions
Total site localization (not just translation)
Multiple and interesting views of product (5 +)
Reassurance of trusted Payment process
Always some presentation of some gender specific
items with more focus on female interest items
(examples: Hello Kitty, stuffed animal, pop culture
phone covers etc..)
Bill Kohnen Pacific Rim E
Commerce Conference
SHOPPING EXPERIENCE
10. Expectation that the e commerce site manages the merchants
Authenticity Guaranty
Fulfillment Quality
Support
Quality
New entrants overwhelmingly underestimate the importance of
managing merchants and therefore do not allocate the right
resources to do this:
Supplier Management experts
Quality Control
Financial Auditors
Logistics Professionals
Managing Merchant Performance is Vital To Develop Customer Trust
Bill Kohnen Pacific Rim E Commerce Conference
MERCHANTS
11. Timely order processing
Return and exchange process
Expectations really not that much different than western but it
has been harder to meet expectations in China as logistics
providers and process are not as developed as in Western
countries.
In China companies can not simply turn over logistics
responsibilities to “Fed Ex” or other third partes and expect
customer expectations to be met.
Bill Kohnen Pacific Rim E Commerce Conference
LOGISTICS
12. Must have data center inside China Fire Wall
Western companies need strong partners in China but should
not just hand over operational responsibility
Requires mutual long term commitment to develop robust
reliable infrastructure
Bill Kohnen Pacific Rim E Commerce Conference
INFRASTRUCTURE