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China outbound shopping
Chinese are 
going 
outbound 
to buy
The problem to be solved. 
Chinese travelers are going overseas . . .we know that. 
100million travelled globally last year. 
at the same time, chinese shoppers are also rushing online 
to buy products from overseas - a trend called “hai Tao.” 
hand carried products from around the world have been 
filtering into china for decades and have fueled the 
growth of taobao. but it seems now that chinese shoppers 
are getting the itch for more. 
they want the genuine goods at good prices but they also 
want novelty. they want more and want to share in the 
stories of where things come from. 
About this presentation
outbound 
offline 
Tourists Overseas 
online 
Ecommerce From China
outbound ecommerce 
In search of products from around the world online. 
“HAI TAO” - Ocean Search 
The term in China for the shopping trend to going online 
...ordering direct from global Websites.
150 140 
48 
2010 2011 2013 2014e 
125 
100 
75 
50 
154 
74 
77 
2012 
Source: 100EC, *2013 China Online Retail Market Insight Report*, 2014,3 
Source: China Internet Watch, 2014,8 
B 
B 
Overseas Shopping 
Market Value (RMB, Billion)
China’s 
Outbound Online 
Consumption to reach 
1.0 trillion 
RMB 
by 2018 
Nielsen report
why 
now?
ftz 
Government support for outbound shopping 
The Shanghai Free Trade Zone is the first sign of more openness. Merchants 
selling through the FTZs are able to offer prices in the range of 30% lower than 
those sold in stores (reduction of tariffs).
online payment options are growing quickly 
Penetration is growing: (1)Credit cards (Visa/MC) are becoming more available, 
(2)Alipay/TenPay are near universal, (3)Alipay’s global ePass may also facilitate 
greater access. 
T 
Credit Cards Alipay Tenpay
$ 
better prices for authentic goods 
Due to tariffs, retail prices for authentic branded products can be 30%+ more 
expensive inside China. And, while deals (promos/sales) can be found in China, 
there is a high risk of buying fakes from second-hand merchants. By going 
direct, overseas, customers hope to find good deals on genuine products.
growing interest in new products & places 
As the number of Chinese overseas travellers is growing, increased freedom is 
resulting in a growing sense of exploration and discovery. Taobao has done a 
good job (until now) of satisfying “discovery” for products but consumers are 
looking for more unique experiences.
maturing international logistics 
While end-to-end shipments of products to consumers in China can be 
lengthy (still), there are a growing range of options to make the process quicker 
and more reliable - drop-shipping, transhipment, etc.
who 
is shopping 
overseas from China
buyer profile - who is shopping 
She is 29 years old, working in a 1st-tier city, and is 
married with kids. 
She has a good sense of style (fashion), likes 
dressing up ...and experiments with lots of beauty 
(skin) products. 
Outbound shopping helps to satisfy her curiosity for 
new things from places she wants to visit. She also 
shops overseas to get a better selection and find 
genuine products. 
The fear of fakes from China is a serious motivation 
for her to buy products overseas for her kids. 
66% are female 
48% are married, with kids 
82% are between 23 - 36yrs 
61% spend between US$160 - 801 per month
12.2% 
shandong 7.2% 
13.2% 
zhejiang 5.2% 
9.2% 
jiangsu 
4.0% 
fujian 
3.7% 
hebei 
Where The Buyers Live 
Percent Overseas Orders by Location 
~30% 
tier-two 
cities 
A new trend has emerged with 
more and more online 
shoppers coming from Tier-2 
cities or below. These “lower-tier” 
shoppers account for 
nearly 30% of the total 
outbound online shoppers 
population. 
Source: 100EC, *2013 China Online Retail 
Market Insight Report*, 2014,3 
Beijing 
Shanghai 
14.1 % 
Guangdong
10 .se 
Source: China Internet Watch, 2014,8 
1 .us 
.uk 9 4 .nl 
7 .jp .kr 5 
.hk 2 8 .tw 
.my 3 
Online Destinations 
Top 10 - Countries for Shoppers 
.dk 6
Purchase Categories 
Top 5 - Bought Overseas Online 
9.4% 
12.9% 12.6% 
Source: iResearch, “2012-2013 Cross-border e-commerce report”, 2013.9 
16 
12 
8 
4 
0 
16.0% 
7.7% 
Fashion Personal Care Baby Products IT/Tech Digital Media 
Strong concerns about quality (worries about 
fakes in china) drive sales in: Baby Products, 
Personal Care and Fashion.
Shopper Motivations 
Top Reasons for Shopping Overseas 
Product Scarcity 
Product Quality 
Better Prices 
Friend Recommendation 
More Variety 
Better Service 
Security 
Better Logistics 
Easy to "Click & Buy" 
Easy to Return 
Others 
52.0% 
50.6% 
50.3% 
Reasons (Multiple Choice) 
Main Reason (Exclusive Choice) 
21.2% 
21.8% 
20.3% 
34.5% 
8.2% 
31.8% 
6.0% 
30.4% 
5.7% 
5.5% 
26.2% 
23.6% 
22.9% 
19.4% 
3.8% 
2.9% 
2.7% 
2.3% 
2.2% 
0 15 30 45 60 
Source: iResearch, “2012-2013 Cross-border e-commerce report”, 2013.9
Shopper Needs 
Challenges of Buying Overseas 
What are the current problems? 
Feedback from Chinese buyers on how to improve: 
current problems what they want 
43% - Long Delivery Times 
33% - Hidden Costs 
31% - Language Barriers 
27% - Uncertain Reliability 
26% - Difficult Returns 
1. Simpler Shopping Process 
2. More Detailed Product Information 
3. Chinese Language Customer Service 
4. Faster/Cheaper Shipping to China 
5. Secure Payment Systems 
6. Better After-Sales Support 
7. Product Authenticity Guarantees 
Tmall Global Report
how 
do chinese 
buy online 
from overseas
PURCHASE DELIVERY AFTER- SALES 
GLOBAL SITE 
Back to Global Site 
to buy or track 
purchase. 
“Hai Tao” Journeys 
How Chinese Navigate to Buy 
? 
Multiple roadblocks at this stage; 
Language, Payment Info, Trust... 
Chinese sites act as; (1)portals to buy overseas 
products, (2)provide ratings/reviews of overseas 
sites, (3)BBS for support on process. 
Buyers can choose 
(1)Direct Shipment, 
(2)Trans-shipment. 
HAITAO SITE EVALUATION 
GLOBAL SITE 
search purchase
Haitao Sites vs Direct 
Options for Buyers 
Buy Direct or use an intermediary site? 
Options for Chinese shoppers ...depending on access. 
china “haitao” sites Global “Direct” sites 
Provides interface for Chinese to: 
1. Get basic information on buying overseas 
2. Peer support through BBS/Community 
3. Evaluation of overseas sites for being “China Friendly” 
4. Provide payment & shipping solutions 
5. Buy from select global sites inside portal 
Questions for Direct Sites: 
1. Is the language gap covered? 
2. Is there a payment option (Alipay, Credit Card)? 
3. Does the site ship to China? 
4. Is there relevant content (Chinese models, scenes)?
leading global “direct-to-China” sites 
leading overseas sites selling into china support 
Chinese language, currency conversion, free shipping to 
China, and include chinese payment methods…
leading china based “Haitao” sites 
Outbound “haitao” sites act as guides to shopping 
outside china, providing how-to, listings/rating of sites, 
sales alerts, intermediary services (payments, shipping)...
Payment Preferences 
Top Overseas Payment Methods 
Domestic Online System (Alipay...) 
Credit Card - Online 
Global Online System (Paypal...) 
Credit Card - Offline 
Online Bank Transfer 
Mobile Payment 
Offline Debit Card 
Offline RMB/Cash 
Electronic Remittance 
Foreign Currency/Cash 
Fixed-line Phone Payment 
53.9% 
48.2% 
45.0% 
44.0% 
50.6% 
Main payment (Multiple Choice) 
Main payment (Exclusive Choice) 
23.9% 
16.4% 
16.4% 
15.4% 
12.3% 
24.0% 
3.4% 
3.0% 
24.2% 
24.4% 
2.8% 
2.6% 
21.3% 
19.6% 
2.5% 
11.2% 
1.2% 
0 15 30 45 60 
Source: China Internet Watch, 2013,11
leading Chinese trans-shipment companies 
trans-shipment services help to receive packages 
overseas and manage fulfillment to end customer in 
China.
in-depth look at 
leading sites
Hot Recommendation, 
Product Categories… 
Promotions 
Navigation Bar 
Promotion, Haitao, Discover, 
Experience, News 
Log-in 
APP 
App for both IOS & 
Android system. 
Push content could 
help to generate more 
leads and drive more 
sales. 
Direct Linkage 
“Hai Tao” Guide Website 
SMZDM.COM 
KEY FEATURE
Search Box 
Navigation Bar 
Categories 
Chinese description, Likes/ 
Favourites/Comments, direct link 
beginner’s guide 
It encourage users to 
post any promotions they 
find worth buying, which 
could help to increase 
their credibitliy, and keep 
users engaged. 
Discover 
Sharing 
Products 
“Hai Tao” Guide Website 
Juchaozhi 
KEY FEATURE
Search Box 
/Recommendation 
Navigation Bar 
Categories 
Special Event 
Logistics Shipment 
Tracking 
Holiday Events 
Products 
Guidebooks for 
Beginners 
user Content 
It encourage users to 
post any promotions 
they find worth buying, 
which could help to 
increase their credibitliy, 
and keep users 
engaged. 
“Hai Tao” Guide Website 
123 Hai Tao 
KEY FEATURE
Direct-to-China Sites 
REVOLVE 
Navigation Bar 
Buying Guide 
Banners 
KEY FEATURE 
Chinese CRM 
Payment Methods 
user images 
Involving users in 
campaigns to show-off 
products bought from 
REVOLVE ...both inside 
Chinese SNS and 
outside. 
Email Registration 
Leave your email 
Those who leave 
anemail address are 
more likely to buy from 
REVOLVE. 
KEY FEATURE
Navigation Bar 
Language 
Search box 
Banners 
Products 
Sharing 
Group Buying 
Group buying 
campaign offers 
users more 
attractive price 
Group Buying 
Chinese CRM 
Direct-to-China Sites 
Cosme-De 
KEY FEATURE
Intro for Beginners 
Direct-to-China Sites 
iHerb.com 
KEY FEATURE 
Chinese Community 
Account Info 
Navigation Bar 
Banners/Promotions 
Features detailed 
shopping guides, 
promotions, CRM, 
active user 
communication, online 
campaign…
Official Account Promotion Community After-Sale Service 
Verified subscription account 
with promotion, shopping 
guides, community, after sale 
service just in WeChat… 
Direct-to-China Sites 
Key Feature: iHerb on WECHAT
recommendations for global sites 
1. Get the Basics Right 
While the tools (payment systems) and access (understanding of foreign languages) are 
improving for Chinese, there are still some big obstacles for Chinese Buyers. Get your site 
properly adapted for Chinese (not just translated but well written for China). At the same time, 
providing support in Chinese language (customer service) is a HUGE advantage for companies 
looking to make a deeper impact in the market. Integrations of Alipay, Tenpay, China 
Unionpay ...are all important. 
2. Community 
Provide an open space where users can talk, ask, and share. This is helpful both for customers 
and for the brands (website operators) as a good way of bringing the service offering closer 
together with Chinese expectations. 
3. Get On Social 
Chinese netizens are extremely active on social media (it’s probably how they will find you in the 
first place ...eg. recommendations from previous customers), so it’s very important to monitor 
and respond regularly on Weibo, WeChat. These same social media are essential tools for 
building awareness and driving sales through offers/promotions. WeChat is a MUST!
Chris Baker, Managing Director 
Email: chris@totemmedia.net 
Twitter/WeChat: Talktototem

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Outbound Online Shopping - From China

  • 2. Chinese are going outbound to buy
  • 3. The problem to be solved. Chinese travelers are going overseas . . .we know that. 100million travelled globally last year. at the same time, chinese shoppers are also rushing online to buy products from overseas - a trend called “hai Tao.” hand carried products from around the world have been filtering into china for decades and have fueled the growth of taobao. but it seems now that chinese shoppers are getting the itch for more. they want the genuine goods at good prices but they also want novelty. they want more and want to share in the stories of where things come from. About this presentation
  • 4. outbound offline Tourists Overseas online Ecommerce From China
  • 5. outbound ecommerce In search of products from around the world online. “HAI TAO” - Ocean Search The term in China for the shopping trend to going online ...ordering direct from global Websites.
  • 6. 150 140 48 2010 2011 2013 2014e 125 100 75 50 154 74 77 2012 Source: 100EC, *2013 China Online Retail Market Insight Report*, 2014,3 Source: China Internet Watch, 2014,8 B B Overseas Shopping Market Value (RMB, Billion)
  • 7. China’s Outbound Online Consumption to reach 1.0 trillion RMB by 2018 Nielsen report
  • 9. ftz Government support for outbound shopping The Shanghai Free Trade Zone is the first sign of more openness. Merchants selling through the FTZs are able to offer prices in the range of 30% lower than those sold in stores (reduction of tariffs).
  • 10. online payment options are growing quickly Penetration is growing: (1)Credit cards (Visa/MC) are becoming more available, (2)Alipay/TenPay are near universal, (3)Alipay’s global ePass may also facilitate greater access. T Credit Cards Alipay Tenpay
  • 11. $ better prices for authentic goods Due to tariffs, retail prices for authentic branded products can be 30%+ more expensive inside China. And, while deals (promos/sales) can be found in China, there is a high risk of buying fakes from second-hand merchants. By going direct, overseas, customers hope to find good deals on genuine products.
  • 12. growing interest in new products & places As the number of Chinese overseas travellers is growing, increased freedom is resulting in a growing sense of exploration and discovery. Taobao has done a good job (until now) of satisfying “discovery” for products but consumers are looking for more unique experiences.
  • 13. maturing international logistics While end-to-end shipments of products to consumers in China can be lengthy (still), there are a growing range of options to make the process quicker and more reliable - drop-shipping, transhipment, etc.
  • 14. who is shopping overseas from China
  • 15. buyer profile - who is shopping She is 29 years old, working in a 1st-tier city, and is married with kids. She has a good sense of style (fashion), likes dressing up ...and experiments with lots of beauty (skin) products. Outbound shopping helps to satisfy her curiosity for new things from places she wants to visit. She also shops overseas to get a better selection and find genuine products. The fear of fakes from China is a serious motivation for her to buy products overseas for her kids. 66% are female 48% are married, with kids 82% are between 23 - 36yrs 61% spend between US$160 - 801 per month
  • 16. 12.2% shandong 7.2% 13.2% zhejiang 5.2% 9.2% jiangsu 4.0% fujian 3.7% hebei Where The Buyers Live Percent Overseas Orders by Location ~30% tier-two cities A new trend has emerged with more and more online shoppers coming from Tier-2 cities or below. These “lower-tier” shoppers account for nearly 30% of the total outbound online shoppers population. Source: 100EC, *2013 China Online Retail Market Insight Report*, 2014,3 Beijing Shanghai 14.1 % Guangdong
  • 17. 10 .se Source: China Internet Watch, 2014,8 1 .us .uk 9 4 .nl 7 .jp .kr 5 .hk 2 8 .tw .my 3 Online Destinations Top 10 - Countries for Shoppers .dk 6
  • 18. Purchase Categories Top 5 - Bought Overseas Online 9.4% 12.9% 12.6% Source: iResearch, “2012-2013 Cross-border e-commerce report”, 2013.9 16 12 8 4 0 16.0% 7.7% Fashion Personal Care Baby Products IT/Tech Digital Media Strong concerns about quality (worries about fakes in china) drive sales in: Baby Products, Personal Care and Fashion.
  • 19. Shopper Motivations Top Reasons for Shopping Overseas Product Scarcity Product Quality Better Prices Friend Recommendation More Variety Better Service Security Better Logistics Easy to "Click & Buy" Easy to Return Others 52.0% 50.6% 50.3% Reasons (Multiple Choice) Main Reason (Exclusive Choice) 21.2% 21.8% 20.3% 34.5% 8.2% 31.8% 6.0% 30.4% 5.7% 5.5% 26.2% 23.6% 22.9% 19.4% 3.8% 2.9% 2.7% 2.3% 2.2% 0 15 30 45 60 Source: iResearch, “2012-2013 Cross-border e-commerce report”, 2013.9
  • 20. Shopper Needs Challenges of Buying Overseas What are the current problems? Feedback from Chinese buyers on how to improve: current problems what they want 43% - Long Delivery Times 33% - Hidden Costs 31% - Language Barriers 27% - Uncertain Reliability 26% - Difficult Returns 1. Simpler Shopping Process 2. More Detailed Product Information 3. Chinese Language Customer Service 4. Faster/Cheaper Shipping to China 5. Secure Payment Systems 6. Better After-Sales Support 7. Product Authenticity Guarantees Tmall Global Report
  • 21. how do chinese buy online from overseas
  • 22. PURCHASE DELIVERY AFTER- SALES GLOBAL SITE Back to Global Site to buy or track purchase. “Hai Tao” Journeys How Chinese Navigate to Buy ? Multiple roadblocks at this stage; Language, Payment Info, Trust... Chinese sites act as; (1)portals to buy overseas products, (2)provide ratings/reviews of overseas sites, (3)BBS for support on process. Buyers can choose (1)Direct Shipment, (2)Trans-shipment. HAITAO SITE EVALUATION GLOBAL SITE search purchase
  • 23. Haitao Sites vs Direct Options for Buyers Buy Direct or use an intermediary site? Options for Chinese shoppers ...depending on access. china “haitao” sites Global “Direct” sites Provides interface for Chinese to: 1. Get basic information on buying overseas 2. Peer support through BBS/Community 3. Evaluation of overseas sites for being “China Friendly” 4. Provide payment & shipping solutions 5. Buy from select global sites inside portal Questions for Direct Sites: 1. Is the language gap covered? 2. Is there a payment option (Alipay, Credit Card)? 3. Does the site ship to China? 4. Is there relevant content (Chinese models, scenes)?
  • 24. leading global “direct-to-China” sites leading overseas sites selling into china support Chinese language, currency conversion, free shipping to China, and include chinese payment methods…
  • 25. leading china based “Haitao” sites Outbound “haitao” sites act as guides to shopping outside china, providing how-to, listings/rating of sites, sales alerts, intermediary services (payments, shipping)...
  • 26. Payment Preferences Top Overseas Payment Methods Domestic Online System (Alipay...) Credit Card - Online Global Online System (Paypal...) Credit Card - Offline Online Bank Transfer Mobile Payment Offline Debit Card Offline RMB/Cash Electronic Remittance Foreign Currency/Cash Fixed-line Phone Payment 53.9% 48.2% 45.0% 44.0% 50.6% Main payment (Multiple Choice) Main payment (Exclusive Choice) 23.9% 16.4% 16.4% 15.4% 12.3% 24.0% 3.4% 3.0% 24.2% 24.4% 2.8% 2.6% 21.3% 19.6% 2.5% 11.2% 1.2% 0 15 30 45 60 Source: China Internet Watch, 2013,11
  • 27. leading Chinese trans-shipment companies trans-shipment services help to receive packages overseas and manage fulfillment to end customer in China.
  • 28. in-depth look at leading sites
  • 29. Hot Recommendation, Product Categories… Promotions Navigation Bar Promotion, Haitao, Discover, Experience, News Log-in APP App for both IOS & Android system. Push content could help to generate more leads and drive more sales. Direct Linkage “Hai Tao” Guide Website SMZDM.COM KEY FEATURE
  • 30. Search Box Navigation Bar Categories Chinese description, Likes/ Favourites/Comments, direct link beginner’s guide It encourage users to post any promotions they find worth buying, which could help to increase their credibitliy, and keep users engaged. Discover Sharing Products “Hai Tao” Guide Website Juchaozhi KEY FEATURE
  • 31. Search Box /Recommendation Navigation Bar Categories Special Event Logistics Shipment Tracking Holiday Events Products Guidebooks for Beginners user Content It encourage users to post any promotions they find worth buying, which could help to increase their credibitliy, and keep users engaged. “Hai Tao” Guide Website 123 Hai Tao KEY FEATURE
  • 32. Direct-to-China Sites REVOLVE Navigation Bar Buying Guide Banners KEY FEATURE Chinese CRM Payment Methods user images Involving users in campaigns to show-off products bought from REVOLVE ...both inside Chinese SNS and outside. Email Registration Leave your email Those who leave anemail address are more likely to buy from REVOLVE. KEY FEATURE
  • 33. Navigation Bar Language Search box Banners Products Sharing Group Buying Group buying campaign offers users more attractive price Group Buying Chinese CRM Direct-to-China Sites Cosme-De KEY FEATURE
  • 34. Intro for Beginners Direct-to-China Sites iHerb.com KEY FEATURE Chinese Community Account Info Navigation Bar Banners/Promotions Features detailed shopping guides, promotions, CRM, active user communication, online campaign…
  • 35. Official Account Promotion Community After-Sale Service Verified subscription account with promotion, shopping guides, community, after sale service just in WeChat… Direct-to-China Sites Key Feature: iHerb on WECHAT
  • 36. recommendations for global sites 1. Get the Basics Right While the tools (payment systems) and access (understanding of foreign languages) are improving for Chinese, there are still some big obstacles for Chinese Buyers. Get your site properly adapted for Chinese (not just translated but well written for China). At the same time, providing support in Chinese language (customer service) is a HUGE advantage for companies looking to make a deeper impact in the market. Integrations of Alipay, Tenpay, China Unionpay ...are all important. 2. Community Provide an open space where users can talk, ask, and share. This is helpful both for customers and for the brands (website operators) as a good way of bringing the service offering closer together with Chinese expectations. 3. Get On Social Chinese netizens are extremely active on social media (it’s probably how they will find you in the first place ...eg. recommendations from previous customers), so it’s very important to monitor and respond regularly on Weibo, WeChat. These same social media are essential tools for building awareness and driving sales through offers/promotions. WeChat is a MUST!
  • 37. Chris Baker, Managing Director Email: chris@totemmedia.net Twitter/WeChat: Talktototem