Demystify

Everyone talks about the market being BIG!

(Source: eMarketer)

Foreign retailers now face a lot of options to approach Chinese market. However, it should be noticed that there’s a lot of misreading about China’s distinctive market.

Unit: Billion dollar

Australia

Japan

U.S.

U.K.

France

$672.01 $349.06

$99.39

$61.84

$42.60

$19.02

$89.55

Germany

Global online shopping

GMV in 2015

China

Myth 1 Being a market leader in your country

will ensure success in China

Truth: China’s ecommerce market is rather different from other markets. New comers may come across:

Monopolized marketplaces

Different buying behaviors

3

The market is highly prone to be monopolized by a few players.

There are more than 3000 vendors in Tmall Global.

Monopolized marketplaces20 Merchants

The rest

90% Sales

10% Sales

4

The age group between 20 and 40 is a huge market and, unlike their elders, they like to try new things, are happier to indulge themselves, are more brand-conscious and are more receptive to new ideas.

Different buying behaviors

2.1%

24.5%

30.7%

23.4%

12.0%

5.2%2.1%

Under 10 10 - 19 20 - 29 30 - 39 40 - 49 50 - 59 60 and above

5

Truth: The high fees will eat into your margins and the competition is fierce.

Costs and feesFierce onsite competition on the platform

Myth 2 The best choice is to open stores on

China’s mainstream marketplaces

6

You need to invest set-up fee and annual technical fee besides commission. You need also to pay Tmall partners fees.

Costs and feesPromotion and marketing costs

Technical Fee

Cost Components

Commission

Tmall Partner Fees

7

Steep discounting and cutthroat competition on the site will undercut your business.

A profusion of e-retailers offer prices that are much cheaper than domestic stores, leading to a bargain-hunting environment.

Fierce onsite competition on the platform

OFF

8

Truth: Business can be conducted in a cross-border way.

Working with local service providers makes an international expansion scalable and accessible.

Marketing

Cloud Hosting

Financing

Operation

Myth 3 Entering Chinese market requires a

lot of investment

9

Local Office

Local Hire

Legal Entity

Physical Presence

Product Certification

Full Product Range

Local Stocking

Entry Cost Cost more

Traditional expansion

Cross-border eCommerce

10

Truth: Some cross-border merchants are selling fake goods, which can be rampant in some highly profitable products like milk powder.

Myth 4 Chinese customers always believe that the

products they buy from overseas are genuine

An online investigation on Baidu shows 98% of the respondents believe they may buy fake goods through overseas online shopping.

It could be a FAKE! It will never be a FAKE!

98% 2%

11

Photo endorsement

Link between CN site and original site

Video endorsement

Overseas PRInteraction between your team and Chinese customers in Chinese social media

To reassure Chinese customers that you are selling the genuine products, you’d better adopt a localized marketing strategy.

xxx announce opening the CN site!

China Click Here

12

Truth: Chinese market are significantlydifferent from western markets. What works inyour domestic market will not beguaranteed success in China.

There’re a lot of work to do.Take advantage of Chinese customers’ shopping psychologyGet used to the internet environment

DO NOT

ENTER

Myth 5 Duplicate your local marketing and promotion

strategy and things will work out

13

Shopping is a way to demonstrate their status, or put it in a Chinese way, face. Your marketing strategy should take this fact into consideration. An up-scale brand image is critical for you to satisfy their face-enhancing needs.

Take advantage of their shopping psychology

Ray-ban

Tiffany

Prada

Italy high heels

iPhone

14

Totally different Social Media and Search Engine System

The different internet environment means that you should adopt different marketing approaches.

Get used to the internet environment

B du

15

Overview of Chinese internet environment and its impact on eMarketing

Wechat is a SNS app that has the features of Facebook, whatsapp, instagram and more… It’s an ideal marketing platform that you can’t afford ignoring. 386 million

214 million

35.7%

64.3%

Gender

549 million monthly active users

<18

2.0%

45.4%

40.8%

9.5%1.4% 0.3% 0.6%

18-25

Source: Curiosity China

26-35 36-50 51-60 60+ N/A

Age

16

Overview of Chinese internet environment and its impact on eMarketing

11-16 17-23 24-33 34-45 more 46

SINA weibo is China’s most popular microblog site, the number of Weibo's MAU (monthly active user) in 2015.9 is 212 million, with a YoY growth rate of 33%.

Source: Sina & Weibo Data Center

The most active users of Weibo are at the age betwenn 17 and 33.

9%

40%39%

11%

2%

Truth: There is a lot more to think about than just translation.

Chinese customers need more illustrative and informative product description, which can’t be achieved by simple translation.

Myth 6 Simple translation is enough

17

A striking contrast between the Chinese site and original site

The Chinese site offers a more vivid and extensive product description page. Apart from giving basic information, the Chinese site displays promotional words about why you should buy the products in a convincing narrative.

18

Truth: Long delivery time has long been a problem ailing Chinese cross-border customers. The customers want a more swift and secured delivery.

Delivery time that overseas online shoppers accept

15-30 days

More than 31 days

Less than 7 days

7-14 days40.8%

43.5%

14.1%

1.6%

Myth 7 #Chinese cross-border shoppers have more

patience in delivering period, so foreign retailers can be rest-assured in logistics

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As an utterly different market, China poses as both an opportunity and a mystery to outsid-ers. Cooperating with a local expert can give overseas retailers competitive edges.

A local expert can help you in these ways.

Most of all, it’s quick to start and with minimal risk.

Conduct promotions and marketing in a controllable

and affordable way

Promote brand image by localized marketing

Accelerate the delivery

Render the most suitable webpage contents

Adapt to the local internet environment

Conclusion

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Marketing

Let’s work on it together! Azoya – your bridge to China retail.

21

Cloud Hosting

Financing

Operation

THANKSwww.azoyagroup.com

Azoya International Ltd . Strictly Confidential