Cosmetics & Food China Entry Strategy.

1. Cosmetics & Food China Entry Strategy
Dan Li 08.02.2017

2. dli@strategiaesviluppo.comDan Li
Traditionally…..
Find an
agent in
China.
Supermarket
Restaurant
Hotel
Consumer
Food
Seller
Oversea
markup
2/17
markup markup *N

3. dli@strategiaesviluppo.comDan Li
ConsumerCross Border E-Commerce
Food
Seller
Oversea
3/17
markupmarkup

4. dli@strategiaesviluppo.comDan Li4/17

5. dli@strategiaesviluppo.comDan Li
The China E-Commerce Research Center (CECRC) predicted the
number of China’s haitao shoppers to increase from 18 million in 2014
to 35.6 million by 2018.
1
2
CHINA E-COMMERCE STATISTICS
In 2015, 45% of Chinese respondents purchase most of their luxury
goods online according to a research conducted by KPMG. 61% will
buy high-end outbound travel products online and 28% will buy cross-
border luxury goods.
Nielsen found that the majority of cross-border online shoppers in
China are “affluent and well-educated young people.” Men aged 26-35
and women aged 26-40 are the age groups most interested in ordering
from abroad.
4
3
China’s biggest e-commerce company Alibaba and consultancy
Accenture predicted that the amount spent overseas would grow from
RMB 55.9 billion in 2014 to RMB 526 billion in 2018, which is
tenfold around.
5/17

6. dli@strategiaesviluppo.comDan Li
(RMB billion )
6/17

7. dli@strategiaesviluppo.comDan Li
WHAT CHINESE ARE BUYING THROUGH CROSS BORDER?
Standardized goods with no size, low return rate are good ones for cross border.
Cosmetics
25%
7/17

8. CROSS-BORDER E-COMMERCE BUSINESS MODELS
Export Through China Free Trade Zone ( Warehouse in FTZ)
China Customer
Cross Border E-Commerce
China Customs
Warehouse in FTZ
China Express Product Release
Order, Payment and Delivery Address
Order, Payment and
Logistics info.
Delivery Notification
Product Stocking
Product Record
Seller Flow
Consumer Order Flow
Oversea Seller
8/17

9. CROSS-BORDER E-COMMERCE BUSINESS MODELS
China Customer
Cross Border E-Commerce
China CustomsOversea Warehouse
International
Express
Product Release
Order, Payment and Delivery Address
Order, Payment and
Logistics info.
Delivery Notification
Product Stocking
Product Record
Seller Flow
Consumer Order Flow
Oversea Seller
Export Through Direct Sale ( Warehouse Not in China)
9/17

10. dli@strategiaesviluppo.comDan Li
Sales Customs
Cargo arrive
at the port
Delivery
Time
Logistics Cost
Sales
Platform
Website User
Friendly
Through China
Free Trade Zone
No customer
order before
products
arrive at the
portal
CIQ (China
Inspection&Quarantine
Services) is required.
But, Shanghai FTZ is
working on
establishing a Public
CIQ platform inside the
zone to fasten the CIQ
process.
in bulk 1-7days
(normally
1-3days)
Delivery in
Bulk,normally
by shipping, in
unit cost much
lower
China
Cross-
Border E-
Commerce
High for Chinese
Consumers (Chinese
language, Chinese
Currency payment,
quick after sale
service)
Through Direct
order
Sales oder
already exists
before
products
arrive at the
portal
CIQ is not required as personal
parcel, pre-
addressed&
packaged.
At least 1-
2 weeks
Delivery as
personal
parcel, most of
time by
air,unit cost
much higher
Oversea
Seller Self
Brand
Website/
Oversea E-
commerce
Low for Chinese
Consumers
CROSS-BORDER E-COMMERCE BUSINESS MODELS COMPARISON
10/17

11. dli@strategiaesviluppo.comDan Li
CHINESE CITIES ALLOWED FOR CROSS-BORDER E-COMMERCE
We Start….
11/17

12. dli@strategiaesviluppo.comDan Li
SHANGHAI PILOT FREE TRADE ZONE (FTZ)
China (Shanghai) Pilot Free Trade Zone (FTZ)
Since it was established on
September 29, 2013, the China
(Shanghai) Pilot Free Trade Zone
(FTZ) has carried out
institutional reform and
innovation in areas of
investment, foreign trade,
finance and post-filing
supervision to form a legal
framework for investment and
trade within the zone. Almost all
the cross border e-commerce
prefer to have their own
warehouse in FTZ. The business
mode is mainly B2C or B2B2C.
12/17

13. dli@strategiaesviluppo.comDan Li13/17

14. dli@strategiaesviluppo.comDan Li
Product
Price
Place
Promotion
• to dig product
Competitive
Advantage
• to study
product life
cycle
• to identify
appropriate
brand image
to convey
WHAT WE CAN DO FOR YOU
• to research on
the
competitors’
pricing
strategy
• to understand
the target
market
segmentation
consumption
level
• to label
competitive
price
• to find, select,
establish and
manage
distribution
channel
• to find
appropriate
storage and
logistics
cooperator
• to do brand
marketing with
lowest cost
• to organize
marketing
events for the
distribution
channel
And More……
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15. dli@strategiaesviluppo.comDan Li
We have offices worldwide:
• Milan (Italy)
• Shanghai (China)
• Kiev (Ukraine)
• Belgrade (Serbia)
• Istanbul (Turkey)
• Fortaleza (Brazil)
• Moscow (Russia)
• Saint-Petersburg (Russia)
• Philadelphia (USA)
15/17

16. dli@strategiaesviluppo.comDan Li
Come with us, we will help you WIN!
Fabrizio Zucca
Strategy
Francesco Sacchi
Bank&Local Policy
Antonio Battaglia
Accounting&Tax
Luca Fornaroli
Operation&HR
Marco Bello
Real Estate&Brazil Market
Maurizio Poli
Finance
Jelena Corsovic
Serbia Market
Liudmylla Tymoshenko
Russia&Ukraine Market
Marina Anikieiva
Russia&Ukraine Market
Dan Li
China Market
Grace Hou
China Market
16/17

17. dli@strategiaesviluppo.comDan Li