Global growth of online shoppers (3-4% yoy growth)
Penetration rate –shentoulvaverage growth rate in the number of online shoppers in China is 83.5 percent. Provinces in central and western China, including Henan, Xinjiang, and Anhui, are enjoying a growth rate of 105 percent.中国消费风向标报告2012 –淘宝和CTRhttp://www.ctrchina.cn/ctrwebsite/cn/pdf/20120410report/01.pdfhttp://www.ctrchina.cn/ctrwebsite/cn/Events_Article.php?articleid=378&cid=2
CONSUMER PERSPECTIVEConvenience: No more queue and crowds. It’s faster and you can do it anytime of the day.Cheaper: Elimination of middleman, so product will be cheaper. Price discounts, promotions and coupons. Comparison: Effortlessly compare, prices and specifications. Many brands available at one place. Huge range of products available as opposed to traditional retailersCross-Border: You can shop from all over the world from the comfort of your place. No more geographical barriers
Founding Fathers of eCommerce 1995Asos 2000 (as seen online)Taobao 2003Business segments only in online market
Founding Fathers of eCommerceBusiness segments only in online market
RETAILER PERSPECTIVELow capitalEasy to launchLess legal hassleFastEasy to maintainNo need for staff, stockGlobal reach
Examples of firms adding an online retail channel to their existing B&M model
picking up lifestyle products that were purchased from the Groupon website. iPads and iMacs for customers to browse, purchase, print and redeem their Groupons on the spot, merchants with no store fronts can also write in to Groupon Singapore to have their products featured at the store,top-selected Goods will be on physical display for immediate purchase, just as you would expect in a traditional shop
Although many Singaporeans today like to easily go online to purchase deals, many still prefer the face-to-face interaction and the fact that an online shop like Groupon has a physical presence,”
Jeannie says that their move into physical stores has paid off handsomely, with profit margins doubling ever since. They accumulated about $1 million in sales from January to May 2011, and expect revenue to hit about $4 million by year’s end, especially since they will be opening a new outlet at Junction 8 in August the same year.That’s not too bad actually, considering that they were only generating about SG$600,000 (US$497,619) in annual sales before they got physical.
Business model: rent out shop space monthly: display clothes ($600 a month) + additional 20% of revenue, 80% exclusive instore designsRapid expansion, 3 outlets in half a year, daily 4 figure sumGoing gaga with your girlfriends about the latest designs and feeling the fabric on your skin
That’s when CK had the idea of starting the company. The business model would be a reincarnation of Best of Blogshops: KissJane now charges between S$1,000 to S$1,500 (US$829 to US$1,244) a rack per month, for a commitment of one year, as well as around 15% for the brand’s sales to fund the company’s marketing efforts.Brokeeven in 7 months (initial 200k)
Physical store = I have made itBut expensive to rent a space and cannot afford the overheads on their ownOnly blog shops that have really made it big can afford to do that
The window features the newest t-shirts on LCD-headed mannequins. The LCDs all show images of customers taken in the store via their photo booth.LCD monitor that shows website comments and rotating user pictures of the t-shirtSpace for classes: A class on digital cameras was scheduled for the day at some of the tablesArt galleryI was confronted by an iMac kiosk ready to snap my photo if I wanted to join those faces of fellow participants
Threadless is built on community. Having a physical space lets them give back to the community in ways a website never will. Activity spaceRecreate the online experience offline to attract new customersBranding – strengthen their image of being a creative company. A space for loyal fans.
company plans to open a test store in Seattle sometime this year. The company envisions a boutique-style store focused on selling Kindle e-readers as well as books from the AmazonDidn't Amazon make a big business by avoiding the traditional retail structure? Doesn't this go against everything the company stands for?
Amazon now sells its own devices like the Kindle e-reader and the Kindle Fire Tablet. People want to touch and feel it before they purchaseNeed to provide tech support for the Kindle. Cut down on replacement cost and increase customer satisfaction.Amazon now publishes its own books and they are having trouble selling these through traditional retail channel.One of the advantages of being an e-tailer is that Amazon’s customers can avoid paying sales taxes, but this is all going to change so it would make no difference to them.
南京西路580号淘宝城位于南京西路与成都北路交界处，以卖假货出名, a place to 砍老外
Showroom function because big ticket items, people still want to see and touch, try out before they purchaseBut this mall mainly caters to those who already shop onlineSelf service style means most people who don’t already shop online would have no clue, especially since lack of promotersPlans to open in Shanghai, Guangzhou, hangzhou, shenzhen, chengduNo plans to open similar mall selling other stuff
800 million still offline
So basically now anyone can be a daigou. Even the fruit seller downstairs.
More sophisticated consumersWant the benefits of all channelsNo longer enough just to be a B&M or a PCNeed to provide a more comprehensive solution and adopt a multi channel strategy
Bricks to Clicks
Magdalene KangBRICKS TO CLICKSTHERE AND BACK AGAIN
Taobao Mall淘宝城－北京 Source: http://bbs.taobao.com/catalog/thread/508895-252286846.htm e-Commerce Insider Report, June 2011
• 270 showrooms• Self-service style• Self-service terminals• No promoters• Payment options • On the spot • Login to Taobao• 10% of the cost of traditional showroomsTaobao Furniture Mall http://www.whatsonningbo.com/tech173.html
• Furniture showroom• Big ticket item• See and touch• Caters to online shoppers• Plans to open in major cities• No plans for other kinds of mallTaobao Furniture Mall Source: http://office.sh.soufun.com/
TAOBAO.COM TO THE MASSES 40% netizens NETIZENS NON NETIZENS60% still offline Source: en.wikipedia.org/wiki/Internet_in_China
Reasons for Not Purchasing Online Not familiar Dont know how No payment method Unsafe Others Source: http://hi.baidu.com/360264986/item/3ab8d01554da30088fbde42f
• Need to reach out to the masses• Address their concerns • Purchase process • Payment process • Safety concerns淘宝实体店TAOBAO PHYSICAL STORES
• Off-the-shelf purchases • Order from a catalog • Seasonal promotions • Order anything on taobao • Payment services淘一站 Source: http://baike.baidu.com/
Franchisee Conditions: 1. Have an online taobao store 2. At least 4 diamond rating 3. At least 98% good reviews 4. At least ¥50,000 in monthly revenue 5. Proper legal documents 6. Provide a minimum depositHow to become part of 淘一站
DEAD!• 2008 implementation• 80 shops in 11 provinces and 40 cities淘一站 Source: http://www.0734.com
• Customers were all young people• No return or frequent customers• Customers only came for the novelty factorWHY?
Takes over entire purchasing process • Purchase on behalf of the consumer • Anything on taobao • Make payments • Accept delivery • Make returns TAOBAO AUTHORIZED DEALER YES!淘 － 淘宝代购店 Source: http://news.ifeng.com/gundong/detail_2011_08/20/8556332_0.shtml
• January 16, 2010• First 150 stores in Hangzhou• Plans to open 30,000 all over China• Expansion into Tier 2 and Tier 3 citiesTAOBAO AUTHORIZED DEALERYES!淘 － 淘宝代购店 Source: http://www.chinainternetwatch.com/548/taobao-expands-into-offlien-retail-business/
Franchisee Conditions:• Commitment of at least 1 year• Basic computer knowledge, typing, experience in online purchasing preferred• Own a store front of at least 2sqm• ¥750 publicity materials• ¥1200 deposit as guarantee (held in escrow)• Miscellaneous marketing feesTAOBAO AUTHORIZED DEALERYES!淘 － 淘宝代购店 Source: http://www.chinainternetwatch.com/548/taobao-expands-into-offlien-retail-business/