Recommended
More Related Content
What's hot
What's hot (20)
Similar to Establishing E-Commerce in China: Apparel Edition
Similar to Establishing E-Commerce in China: Apparel Edition (20)
Recently uploaded
Recently uploaded (20)
Establishing E-Commerce in China: Apparel Edition
- 1. Interviews and insights from:
- 2. B2C E-‐Commerce is booming in China • Since 2008, B2C has grown by over 100% per year • China’s e-‐commerce has tradiConally been dominated by C2C on Taobao, but B2C is now gaining tracCon • For the consumer: B2C beHer addresses quality issues than C2C • For the brand: B2C offers ownership of the customer’s experience, data, and contact • Apparel brands, foreign and domesCc, are expanding aggressively to capture this opportunity These highlights are from a report on China’s Fashion E-‐commerce by BloggerInsight: hHp://www.bloggerinsight.com/blog/establishing-‐e-‐commerce-‐in-‐china
- 3. B2C is Taking Off in China • B2C is now growing much faster than C2C • But many Chinese shoppers have sCll not yet used B2C 52 120 207 300 400 500 4 9 32 87 176 292 0 100 200 300 400 500 600 700 800 900 2007 2008 2009 2010e 2011e 2012e B2C C2C Source: iResearch, 2009 RMB Billions
- 4. B2C Fashion is on the Rise Too B2C is expected to conCnue with 100%+ growth for the next 3 years Source: iResearch, 2009 RMB Billions 15.8 28.47 37.6 48.8 62 1.2 2.4 4.7 9.2 18 0 10 20 30 40 50 60 70 80 90 100 2008 2009 2010e 2011e 2012e B2C C2C Online Apparel
- 5. Taobao 76% PaiPai 6% DangDang 6% Taobao -‐ 76% PaiPai -‐ 6% DangDang -‐ 6% Joyo -‐ 2% 360Buy -‐ 2% Baidu -‐ 2% EachNet -‐ 1% Red Baby -‐ 1% CNCard -‐ 0.4% M18 -‐ 0.3% 99 Web -‐ 0.3% Other -‐ 3% Taobao sCll dominates overall E-‐commerce (a majority is C2C) 5 Source: CNNIC, 2009
- 6. Many Apparel Brands are Opening Taobao Mall Stores hHp://mall.taobao.com/ Source: Alibaba research 6 • Taobao Mall is Taobao’s B2C marketplace • Taobao Mall takes XX-‐XX% commission based on scale (see full report) • 33 apparel and accessories brands currently parCcipate • Includes UNIQLO, Jack & Jones, ONLY, and ESPRIT currently parCcipate. Taobao is aggressively seeking more brand partners. • Taobao is the online desCnaCon of choice for most Chinese, so it is essenCal for brands to have a presence • Taobao may launch a new mall for luxury brands (ex: Prada, Coach), but that is not branded as Taobao
- 7. B2C Market Share (2008) Source: iResearch, 2009 Taobao Mall 20% 360 Buy 16% Joyo 12% Dangdang 11% M18 8% VANCL 4% 139shop 4% Redbaby; 4% 99read 2% Menglu 2% PPG 1% Others 16% Total Market: 8.7 billion RMB But there are Other Strong Players in B2C
- 8. What do Chinese Shop for Online? Apparel & home products are by far the most popular purchases online Source: CNNIC, 2009 % 0.5% 2% 2% 2% 4% 5% 7% 8% 9% 13% 20% 24% 62% 0 10 20 30 40 50 60 70 80 90 100 Tickets & hotel bookings Sports equipment CollecCble items Flowers & gils Mother & baby products Home electronic applicaCons Computer & components Food & health products Card recharge CommunicaCons & digital products Books & videos CosmeCcs & jewelry Apparel & home products
- 9. Why are customers dissaCsfied with their experience? • B2C addresses quality issues beHer than C2C • But all online retailers face a high level of mistrust % Reason #1: Fakes or low-‐quality Reason #2: Issues with delivery 11 11 15 21 23 25 52 0 10 20 30 40 50 60 70 80 90 100 Product lost or broken during delivery High delivery fee Poor customer service from deliveryman Delivery Cme is too long Low quality or broken products Fake products Products not as pictured 9 What are the Challenges for E-‐Commerce in China?
- 10. • Big apparel brands are moving quickly to establish and expand their e-‐commerce – Your brand is being sold online in China (via Taobao C2C and other channels), but are you controlling the process or capturing the gains? • VANCL and Mecox Lane (M18) are pioneering a revoluConary model as ‘online-‐only’ apparel brands – Fashion at a low to mid-‐range price point – Promoted via heavy performance-‐based online adverCsing (VANCL is the #1 adverCser on RenRen, one of China’s largest social networks) • 3 party infrastructure (logisCcs, delivery, solware soluCons, etc.) is improving • Examples follow: UNIQLO, GAP, and Mecox Lane (M18) Smart players are doubling down on B2C apparel in China
- 11. • Japan’s UNIQLO and the Taobao Mall formed a Cght partnership, they share Solbank as a common investor – All products on uniqlo.cn link to UNIQLO’s popular Taobao Mall store – Taobao Mall eager to help UNIQLO succeed as a “lighthouse” client in order to prove to others that it could work with internaConal brands • Reaching new customers: 2/3 of UNIQLO's online sales come from regions without retail shops UNIQLO UNIQLO onTaobao Mall UNIQLO Standalone Site Products link toTaobao Store
- 12. “Gap is believed to be the first retailer [in China] to launch an e-‐commerce business in parallel with the opening of its first stores.” –Financial Times • Opening a store front on the Taobao Mall (B2C) • Launch is supported by a major print and online campaign, with a famous Chinese actress and bloggers. Photo shoots are top-‐class, done by the famous Annie Leibovitz. GAP
- 13. Mecox Lane (M18) Mecox Lane (M18) went public on the NASDAQ on October 26, 2010, raising $129 million. The next day shares jumped 57%. Mecox Lane was the first was the first B2C e-‐commerce IPO from China.
- 14. • Online campaign to promote the launch of Shanghai flagship store on May 15, 2010 • Free polo shirt giveaways in 88 colors • 88 lucky ladies who submit their pictures are featured in the final video (also broadcast on TV) • “8” is a lucky number in China because it sounds like “発財,” which means success or wealth • Official campaign site: hHp://www.uniqlo.com/shanghai/88colors/en/index.html Apparel Brands are Using Social Media to Reach Fans Example Campaign: ‘88 Colors’ by UNIQLO
- 15. • Fan page on Kaixin001, a popular social network for Chinese white-‐collars: www.kaixin001.com/uniqlo • 30,000+ fans, 300,000+ views • Promotes the 88 Colors promoCon, video, and main site • Key: fan interacCon is sustainable; UNIQLO conCnues to engage fans daily long aler the conclusion of the ‘88 Colors’ campaign UNIQLO on Kaixin001 Example Campaign: ‘88 Colors’ by UNIQLO
Editor's Notes
- # OF BRANDS ON TAOBAO MALL ALREADY “INCLUDING…”