1. global web
the emerging
https://www.flickr.com/photos/curious_e/10642468063

2. http://www.flickr.com/photos/ducdigital/2892313560
“To understand China’s Internet sector, start by thinking
of the services you know and love in the U.S. Then
change all their names, combine four of them into one,
drop any fees and reduce the number of ads.”
— Jessica E. Lessin, The Information

3. it’s easy to explain
these differences away
as purely cultural
https://www.flickr.com/photos/maureendidde/12691105824/

4. Internet Population and Penetration
…or due to low internet
penetration…

5. Source: Age of Man - interactive map, National Geographic
…or vastly different
income levels

6. But these factors (even combined) merely tell part of
the story—especially when it comes to commerce—
and that’s what we’re going to discuss today

7. China has 14 cities with populations
over five million...
https://www.flickr.com/photos/decar66/6341327886

8. ...a whopping 41 cities with
more than 2 million inhabitants
http://www.flickr.com/photos/tahini/10468208216

9. ...and a “middle class” growing at a rate of
80,000 people a day
http://www.flickr.com/photos/tahini/10468208216 Source: China Connect

10. rural residents can be challenging
http://www.flickr.com/photos/lukewebber/4588854679
reaching China’s 600 million

11. its close to 700 million urban residents
but opening enough stores to service
can be outrageously expensive
http://www.flickr.com/photos/tuchodi/5620884999
(or downright implausible)

12. http://www.flickr.com/photos/milo_riano/4336541309
isn’t so much an electronic version of commerce,
it *is* commerce, pure and simple
so to many Chinese, shopping online

13. https://www.flickr.com/photos/curious_e/10473440064
...and using their mobile to do so isn’t just
a modern alternative to using a PC, it’s their primary
(or sometimes only) means of using the internet

14. Chinese e-commerce is also different in one more
very important way...

15. 76%
of online retail
involves individual
merchants
of online retail is
sold through online
marketplaces
90%
Source: The Economist

16. China’s giant, virtual marketplaces enable
buyers and sellers to find each other
a modern virtual
version of this
http://www.flickr.com/photos/mckaysavage/135932500/
like public markets and town centres,

17. The largest marketplace is Alibaba’s Tmall which contains products from more than
150,000 merchants and 200,000 well known brands.

18. Tmall charges an entry fee, and a commission for each sale, but in return provides a
high visibility, high traffic, customizable, social-media and mobile optimized e-
commerce platform.

19. apple.tmall.com
For major brands such as Apple, hosting a virtual storefronts on Tmall is a good
alternative to opening hundreds (or possibly thousands) of brick and mortar stores
across the country.

20. Alibaba also offers a C2C site called Taobao, which enables consumers and smaller
merchants to sell products online. Taobao is a bit like EBay, but vendors aren’t limited
to selling things...

21. They can also sell services. This Taobao-based travel agent doesn’t just sell you a trip,
they can also arrange a travel visa, sell you a Thai 3G SIM card, a wi-fi dongle, a
subway pass, or local transportation.

22. C2C and B2C
commerce on Taobao
Tmall merchants pay a
commission and an
entry fee
we’ll discuss
this bit later...!
TaoBao merchants don’t pay to sell
stuff, they buy advertising and other
services to help them stand out
and“A mix of ,
with a dash of .”

23. This family of sites enables consumers to shop for a huge range of products that
might otherwise never be available in their region. (And yes...Tmall can sell you a new
Peugeot...or a Lamborghini).

24. They’ve also enabled millions of
new jobs—especially in smaller
towns or rural areas where micro-
businesses can now sell their
locally made products or produce
to an audience of billions.
http://www.flickr.com/photos/tuchodi/5642172895

25. The Chinese marketplace model has already slipped
beyond its borders...

26. “...most of the people have phones but [in Lagos]
there are only 3 malls per 21 million inhabitants...
It’s a unique time...the right time to leapfrog over ‘offline’.”
- jumia.com co-founder
THE BIGGEST ONLINE SHOPPING MALL IN AFRICA
Egypt | Kenya | Uganda| Ivory Coast| Nigeria | Morocco
*that’s 60K people per retail outlet compared to 7K in APAC and 389 in the U.S.

27. https://www.flickr.com/photos/davidrosenphotography/15137403228/
we literally have some customers who have ordered
multiple times and never spoken to us…
- How WhatsApp helped Jumia disrupt Africa
“…our [agents] chat all day long
never placed an order online”
on messaging and social media with our customers…

28. https://www.flickr.com/photos/decar66/5150814952
but given the size of these
giant marketplaces, how can consumers
find the product they really want?

29. where consumers can explore a vast
user-curated selection of choices”.
| Open Youthology
“Online shopping neighbourhoods are
online destinations created by social media,

30. Meilishuo
(which means “beauty talk”)
32M users in 2012
similar to an online travel agent
these sites get a cut for each outbound transaction
(for this site alone, that was 5-6M clicks a day in 2012)

31. Part of the reason these services work, is that they feed into the virtuous circle of
mobile and social media adoption.
Source: The internet economy in the G20 (PDF)
Developing markets are going “straight to social”
Users adopt social networking quickly as they come online

32. China *loves*
social media

33. ...but the most popular social media services in China
aren’t just “sites”—they’re platforms.

34. one of the most popular
(lately) is WeChat
or Wēixìn - - in China
five years old
mobile-only
700+ million MAU

35. mobile-only, and far more
than just a messaging app
(recorded) voice chat
RSS-style subscription content
mobile contact exchange
highly customizable API
payment platform
text chat
group text or video chat
photo-blogging
virtual wallet

36. WeChat’s API is extensive, enabling brands to create “mini-sites” containing
news, chat-based support* or full-blown transactions through with WeChat’s
virtual wallet and payment platforms.
WeChat subscription channels API integration enables
customizations such as
sub-sections...
download our app
find nearby
stores
...and product or service
inquiries using an automated
short messaging service
here’s the stuff you can
ask regarding coffee...
“cappuccino”
tell me about “coffee”
*delivered by a mixture of bots and humans

37. Messaging, bots and other ‘native’ services are enhanced by mobile-only ‘light apps’ (
) “one-off, zero-download, hyper-targeted mini-sites” that enable more creative or
complex experiences.

38. “Philosophically, while Facebook and WhatsApp measure growth by
the number of daily and monthly active users…WeChat cares more
about how relevant it is in addressing the daily, even hourly needs of
its users…[its] goal is to address every aspect of its users’ lives,
including non-social ones.”
— Connie Chang, a16z

39. http://www.flickr.com/photos/ducdigital/2892313560
Virtual wallets, mobile payment and alternative finance models are
quite popular in emerging economies, as they help address a whole
host of local challenges...
1/4 of adults
across sub-Saharan
Africa as a whole only
have accounts at formal
financial institutions
less than
of Indonesians have a
credit card
15%
Source: Wall Street Journal

40. http://www.flickr.com/photos/kiwanja/3169409467/
M-Pesa in Kenya is the poster-child of mobile banking, but as of early 2015, there were
261 different mobile finance services across the world.

41. consumers without credit cards can also choose to pay
https://www.flickr.com/photos/kamshots/468265643/
in countries such as China, Nigeria and Indonesia
for online purchases using cash on delivery

42. https://www.flickr.com/photos/wippetywu/14295584182/
or M-Pesa on delivery, or [mobile] airtime
on delivery, or whatever it is…"
- interview with Parinaz Firozi, Jumia MD, Kenya
if it will be delivered…we allow cash on delivery,
“…if you’re not sure if this is a scam,

43. In most cases, mobile is the glue that ties these
platforms, services and communities together...

44. WeChat has for example,
built much of its functionality
around the QR code

45. WeChat automatically generates a QR code for each account. To follow a person
or brand, simply scan the code (on a device, business card, web site etc.)
(WeChat even provide templates enabling personalization of the code to suit your personality or your brand.)

46. This reliance on QR codes works, because in China (and many other parts
of Asia) almost every app (including locally built web browsers!) has a built
in QR code reader.
Qunar (travel brand) Baidu web browserTaobao

47. in China using QR codes to transform
virtual activities into physical ones
(and vice versa) has become common
(...one might say mundane)

48. These brands and consumers aren’t merely
“leapfrogging” desktop, or finance, or physical retail...

49. in mobile
transactions in 2013
$25 billion
in mobile
transactions in 2013
$150 billion
(Alipay - Alibaba’s virtual currency)
they inhabit a giant rapid-prototype of our future...
Source: Business Insider

50. a future inhabited by people
https://www.flickr.com/photos/paulk/4693602730
for whom the words “offline”, “online”
and “mobile” may have already
become irrelevant

51. It also enables brands operating in these markets to
try things that might otherwise sound a little crazy...

52. In Russia, e-commerce
brand Lamoda turned poor
postal infrastructure and
payment on delivery into an
excuse to try something that
seems completely un-
scaleable...

53. “...Lamoda sends sales assistants directly to
homes...uniformed delivery men bring the clothes,
wait for [customers] to try them on, offers fashion advice,
take returns and process payments on the spot”
- Russia: Where the Deliveryman Gives Fashion Advice
https://www.flickr.com/photos/41738141@N06/6814977720/

54. https://www.flickr.com/photos/rodriguez5000/12149403593
The Economist: The next frontier
“To Westerners, ‘mobile banking’ is a new way
of doing something old. To many Africans, it’s
the obvious way of doing something new”

55. http://www.flickr.com/photos/tinou/453593446
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amazing photographers on
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