Online opportunitiesin theworld’s largeste-commercemarket, China · 2017-11-20 · The e-commerce...
Transcript of Online opportunitiesin theworld’s largeste-commercemarket, China · 2017-11-20 · The e-commerce...
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Online opportunities in the world’s
largest e-commerce market, China
© Finpro
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A shift in consumer behavior opens up for a new business model
Industries like consumer electronics,
appliances, toys and games, and other
household products are already firmly
established in the e-commerce space, but
food and beverage manufacturers have
overall been slower on the uptake.
As more consumers shift to a
preference for online shopping,
F&B manufacturers need to find
ways to adopt e-commerce as part
of their sales and marketing
strategies.
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The e-commerce business model is here to stay –Asia (China) is leading the development
• Online retail sales is growing globally, China is
leading the development.
• Worldwide Retail Ecommerce Sales was expected
to reach $1.915 Trillion in 2016. Double-digit
growth will continue through 2020, when sales
will top $4 trillion.
• China remains the world’s largest retail
ecommerce market, with sales representing
almost half (47.0%) of digital retail sales
worldwide (eMarketer).
• Spending via mobile is booming and accounted
for 55.5% of all ecommerce sales in 2016, and is
expected to reach 68% by 2020 (eMarketer).
• Expanding middle classes, greater mobile and
internet penetration, growing competition of
ecommerce players and improving logistics and
infrastructure are the key growth factors.
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China –growing demand for safe, imported food
• 40% of Chinese consumers buy food online, in contrast
to just 10% of the US consumers (McKinsey).
• The food currently offered online is dominated by dry
packaged or canned food.
• The product categories of imported fruit and other types
of fresh food are among the fastest growing categories in
urban areas.
• Chinese consumers are looking for quality & safe
imported food products. The demand for health food
and supplements is also growing.
• Domestic food scandals and concern for food safety are
some of the key drivers of the demand.
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What are Chinese consumers buying online? Frequency and percentage purchased by Chinese online consumers
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Where are they buying it from? Two marketplace players control 80% of the B2C market (domestic as well as cross-border)
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Marketplace store VS individual brand store
Marketplace store (Alibaba’s
Tmall/Tmall Global, JD’s JD.com)
• 90% of all sales
• 50% of the brand’s SKUs (mainly
bestsellers)
• Heavy marketing
• Needs a perfect quality of service
(chat function, etc)
• Sales are public
• Volume driven
• Enclosed world –the marketplace
owns the customers and the data
• Vague search results on Baidu
Brand store (.cn store)
• 10% of all sales (some brands have less
than 1% sale on their own website)
• Full assortment of SKUs
• Branding/History/Values/E-magazine
• Shop locator/OmniChannel
• Loyalty/eCRM
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Who’s buying? And why?
• According to Nielsen research, the typical online buyer of
imported products in China is female, younger than 30 and
with an income of more than RMB 11,000 (approx €1500) per
month.
Frequently cited reasons for shopping online include:
• Accessibility.
• Convenience.
• Price/discounts.
• Greater assortment.
• Detailed product information & customer reviews.
• Confidence: consumers place higher levels of trust in the
authenticity of purchases made on major B2C platforms such
as Tmall, JD.com and Yihaodian.
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How to sell your products online?
Market access models
E-commerce
model
Domestic
(local
presence in
market)
Cross-
border
Marketplace
(flagship/distributor/
third party/ online
supermarket
Direct
sales
Marketplace
flagship/distributor/
third party/ online
supermarket
Direct
sales
From home
country to
consumer
From
bonded FTZ
warehouse
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Valio’s Tmall Flagship store (Alibaba’s Tmall)
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Kesko’s flagship store on Tmall Global (SME door opener)
08.01.2016 © Finpro
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3 Finnish companies selling on JD.com
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A word or two about e-com and marketing
• Social drives e-commerce, and approximately 50% of e-commerce is driven by social media
in many parts of Asia and in particular in China.
• Brand strategy, creative design and digital marketing –are key for online success.
• Identifying the customer need is key for staying ahead of the competition.
• Tmall is not only an eCommerce platform, but also works as a search and discovery engine
(like Google). Thus, Tmall is as much about content as it is about commerce
• Brand.cn site could be an option for consumer engagement and building loyalty. Make sure
it’s optimized for mobile. Many brands also build their CRM/loyalty through wechat.
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Food from Finland’s B2C marketing channels in China: 芬享美食芬享美食芬享美食芬享美食
Channels:
(900 million users)
(350 million users)
Other brand investments
• Baidu (SEO –Search Engine
Optimization/SEM –Search Engine
Marketing)
• Online campaigns
• KOL (Key opinion leaders/influencers)
product endorsement
• Other Food from Finland promotions
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How to get started?
• Are my products suitable for e-
commerce?
• Is there a demand for my products in
China?
• Consider domestic VS cross-border?
• Consider business model: flagship?
Third party? Distributor? Sell directly?
• There are no quick fixes! Developing
the e-commerce channel requires
time and investments.
• Branding, marketing, story-telling –key
for commercial success.
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Thank You!
Jonna Wibelius, Business Development Manager (e-com, China)
+358504681764, [email protected]
Esa Wrang, Head of Industry, Director
+ 358 400 243 076, [email protected]
Annaleena Soult, Program Manager
+ 358 40 343 3447, [email protected]
Tiina Luoma, Senior Program Coordinator
+ 358 50 464 3385, [email protected]