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E-commerce Berlin Expo 2017 - Cross Border Ecommerce: Making the Most of China’s Potential

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E-commerce Berlin Expo 2017 - Cross Border Ecommerce: Making the Most of China’s Potential

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Nenad Cetkovic COO Lengow

China is now the largest e-commerce market in the world. By 2018, China's predicted total revenue is set to reach 871 billion euros, accounting for 40% of the total e-commerce market. By 2020, the market is expected to be larger than the USA, Japan, the UK, Germany and France combined. The Chinese market is complex - there are several different business models, whereas in Europe most e-commerce companies act as independent online retailers. We'll be taking a look at how German online retailers can tap into the market in China.

Nenad Cetkovic COO Lengow

China is now the largest e-commerce market in the world. By 2018, China's predicted total revenue is set to reach 871 billion euros, accounting for 40% of the total e-commerce market. By 2020, the market is expected to be larger than the USA, Japan, the UK, Germany and France combined. The Chinese market is complex - there are several different business models, whereas in Europe most e-commerce companies act as independent online retailers. We'll be taking a look at how German online retailers can tap into the market in China.

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E-commerce Berlin Expo 2017 - Cross Border Ecommerce: Making the Most of China’s Potential

  1. 1. S E L L E V E R Y W H E R E
  2. 2. MAKING THE MOST OUT OF CHINA’S POTENTIAL NENAD CETKOVIC CHIEF OPERATING OFFICER
  3. 3. CHARACTERISTICS OF THE MARKET
  4. 4. 1.3 X EUROPEAN MARKET 10 X GERMAN MARKET 1.7 X US MARKET MARKET SIZE - CHINA Sources: McKinsey and Company No.1 ecommerce market in the world 2017 FORECAST: $ 857 BILLION
  5. 5. IN CHINA MARKET SIZE - CHINA 720 MILLION internet users 52% internet penetration rate 25% of the Chinese population shop online 91% of these Internet users have an account on the biggest social media platforms: WeChat, QQ, Weibo and Youku Sources: internetlivestats,, Ecommerce Europe
  6. 6. BACKGROUND AND IMPACT OF CULTURE AND POLITICS The booming economy and political development means many changes in regulations, taxation and process structures Divided by provinces/cities Culture/languages (mainland China, HK, Taiwan) Ex of a typical local festival: 40% of Chinese E-commerce turnover is made on Tmall.com and JD.com for Single’s Day (11th November, or 11.11) The censorship in China Amazon = Tmall, Google = Baidu, Facebook = Wechat, Twitter = Sina Weibo, Paypal = Alipay A MUCH DIFFERENT INDUSTRY
  7. 7. THE DEVELOPMENT SPEED STATE OF NETWORK More than ½ of online transactions are done through smartphone (vs 1/3 in the U.S) FAST TREND EVOLUTION 2014 O2O Online to offline 2015 Beginning of WEB KOL Key Opinion Leader 2016 Micro Video + Live Video Shows Different attitude with digital tools: short time of PC usage, fast transfer to smartphones, powerful social media 5G is already on its way Fan economy: communication relies on influencers > Reputation is the key
  8. 8. CHINA B2C CROSS-BORDER E-COMMERCE $85 BILLION 2016 Turnover 40% of chinese online consumers buy foreign goods $473 annual average spend on foreign goods 50% cross-border consumers in China by 2020 THE BEST SELLING PRODUCT CATEGORIES EXPORTED FROM CHINA Fashion High Tech Home THE TOP RESEARCHED PRODUCTS IMPORTED BY CHINESE CONSUMERS Fashion Home Baby products Pharmaceutical products Cosmetics Food Source: China Internet Watch, E-marketer, AliResearch
  9. 9. In other countries, e-commerce is a way of doing shopping. In China it’s a way of life. Jack Ma - CEO OF ALIBABA ALIBABA’S 11/11: SINGLES DAY Source: frenchweb $17.8 BILLION worth of GMV VS Black Friday and Cyber Monday: $5.7 billion. 11.000 international brands 657 MILLION orders >1 BILLION transactions 82% of purchase realised on mobile +32% compared to 2015
  10. 10. THE KEY INDUSTRY PLAYERS
  11. 11. THE BIG 3 IN CHINA: BAT INSTEAD OF GAFA THE NO.1 LOCAL SEARCH ENGINE B2C B2B C2C Cross-border Wechat Social media QQ Messaging
  12. 12. A MARKETPLACE KINGDOM 61% 19% Source: Research Consulting Group (february 2016)
  13. 13. Created by Tencent 5 years ago 800 million users WeChat Wallet features: e-commerce & payment options Essential tool for communication between sales & clients, and for publishing articles WECHAT
  14. 14. WHY CHINA? The cross-border market is quite new in China (Tmall Global launched in 2014 and JD WorldWide in 2015) 25% of growth per year VS 11% in France Middle class: between 7% and 30% of the total population New generation with more purchase power + big interest in European brands and high quality products China is projected to become the largest cross-border B2C market by 2020 Special market in the APAC area
  15. 15. HOW LENGOW HELPS
  16. 16. AS THE EUROPEAN LEADER, LENGOW CAN HELP YOU SELL EVERYWHERE (Sources: Remarkety, Ecommerce Europe) 1 CHINA 2 USA 3 UK 4 JAPAN 6 GERMANY 5 FRANCE 7 SOUTH KOREA 8 CANADA 9 RUSSIA 10 AUSTRALIA
  17. 17. WE’RE EXPERTS ON CROSS-BORDER ECOMMERCE AND FRAGMENTED MARKETS Home Fashion/Sport Electronics Beauty/Healthcare Generalists
  18. 18. WE’RE USED TO HANDLING CHANNELS AND COUNTRIES’ SPECIFICITIES We can connect you to any platform!
  19. 19. CHINESE MARKET SPECIFICITIES Behaviour Comparison culture Window shopping approach Detailed product pages Technique Adapting product catalogue Connecting with marketplaces’ information systems Branding & digital marketing Strong competition & very low price Regulation barriers Importance of social media Logistics Complex and costly Specific tax system Customer support Needs to be in Chinese English is not acceptable Financial Payment methods Alipay is essential
  20. 20. OPENING YOUR SHOP ALONE A LONG AND COMPLEX PROCESS Open an Alipay account Admin to do with opening the shop Create content for the shop Promotional strategies Logistics, returning products, customer service Open the shop Translate product catalogue Open the shop Customer service Stock Logistics Marketing strategy Adverts Shooting photos, videos
  21. 21. OPENING YOUR SHOP WITH LENGOW WITH LENGOW : 1 SPOKESPERSON, 1 POINT OF CONTACT TO-DO: CREATING A STORE Open an Alipay account Admin to do with opening the shop Create content for the shop Promotional strategies Logistics, returning products, customer service Open the shop TO-DO: TMALL PARTNER Translate product catalogue Open the shop Customer service Stock Logistics Marketing strategy Adverts Shooting photos, videos
  22. 22. W W W . L E N G O W . C O M nenad@lengow.com NENAD CETKOVIC C H I E F O P E R AT I N G O F F I C E R +33 1 84 79 03 70 @Lengow_DACH ANY QUESTIONS?
  23. 23. W W W . L E N G O W . C O M Jim.Knopf@lengow.com JIM KNOPF M A N AG I N G D I R E C TO R G E R M A N Y +49 172 7306633 JimKnopf13 MEET US AT STAND A15!
  24. 24. WE’RE EXPERTS ON CROSS-BORDER ECOMMERCE AND FRAGMENTED MARKETS Home Fashion/Sport Electronics Beauty/Healthcare Generalists
  25. 25. A MARKETPLACE KINGDOM 61% 19% Source: Research Consulting Group (february 2016)

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