E-COMMERCE IN CHINA

Decoding & opportunities

2016, September 28th

AGENDA

ALIBABA DIGITAL ECOSYSTEM

CHINESE CONSUMER KEY E-COMERCE

DRIVERS

PARTNERSHIP AXA GROUP &

ALIBABA

ALIBABA CLOUD

HOW TO ENTER CHINA E-COMMERCE?

THE 1ST ECOMMERCE MARKET IN THE

WORLD

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EQUANCY SHANGHAI

We are a leading global consulting and innovation firm, specialized in marketing and

communication. We go from strategy to implementation to boost your business

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FOUR OFFICES, ONE OPERATIONAL COMPANY

SHANGHAI 15 people

GROWTH STRATEGY

BRANDING

DIGITAL

PARIS 120 people

GROWTH STRATEGIES

DIGITAL STRATEGY

DATA, ANALYTICS & SOLUTIONS

BRANDING

CORPORATE COMMUNICATION

INNOVATION

CUSTOMER MARKETING

NEW YORK 15 people

BRANDING

INNOVATION

MUMBAI 3 people

DIGITAL STRATEGY

ANALYTICS

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OUR SHANGHAI OFFER

DIGITAL GROWTH

MARKETING

BRANDING

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OUR CLIENTS

THE 1st ECOMMERCE MARKET IN THE WORLD

China’s economic dream may be ending…

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But...

Source: Internet Live Stats / eMarketer, Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year, August 2016

of world Internet users

1/5 of world

e-commerce sales

1/2

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…and we think this is just the beginning

+176%USA Sales Growth from 2012 to 2016

+434%China Sales Growth from 2012 to 2016

225 263 298 397

525

210 297

473

911

1568

2012 2013 2014 2016 2018

USA China

Retail ecommerce sales in China & US compared (in billion US $)

Source: 2014-2018: Statista, Retail ecommerce in China, USA and France

How China became the world’s ecommerce king?

Consumers played a central role in the development of the e-commerce

BEST DEAL Cautious consumers always looking for the best deal

WORD OF MOUTH Supported by eager consumers to share on social media

LOW AVAILABILITY Underdeveloped retail infrastructures in lower tier cities and rural areas

CONVENIENCE Chinese delivery system is deregulated thus very efficient and fast

EARLY ADOPTERS NO BARRIER TO BUYING ONLINE Curious consumers willing to try new brands and products

QUALITY Willing to buy imported products as quality guarantee

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By being on the quest to get value

PREMIUMIZATION EXPERIENCIAL LOYALTY

Source: McKinsey, What’s driving the Chinese consumer, 2016

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And being completely digitalized

= =

Source: eMarketer, Worldwide Internet & Mobile Users, 2015

563

million smartphone

users in China

O2O is now disrupting the way business is done

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ONLINE OFFLINE2

NEW O2O CONSUMER

HABITS

NEW DIGITAL ECOSYSTEM

DEVELOPMENT

E-COMMERCE

MOBILE APPS

OFFLINE RETAILS

SOCIAL MEDIA

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2

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The power of WeChat

Source: McKinsey, How savvy, social shoppers are transforming chinese ecommerce, 2016

ALIBABA DIGITAL ECOSYSTEM

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Alibaba, the leader of Chinese E-commerce

Retail ecommerce GMV in US and China in 2015 in billion USD

Alibaba sales alone exceeded that of

USA in 2015 343

672

476

US CHINA ALIBABA

Source: Statista, Alibaba

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« In America, there’s Walmart, there’s

Kmart. All retailers are everywhere so e-commerce

is just like a dessert. In China,

e-commerce is the main course. »

Jack Ma - Apec - 2015

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Alibaba eco-system

THE LINK TO WATCH THE VIDEO ONLINE https://www.youtube.com/watch?v=CtXxAA5Hg60

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Alibaba, the world largest e-commerce marketplace

434 M

42 M

1 bn $485bn

+10 M

GMV (full fiscal year 2016)

PACKAGES DAILY

ACTIVE SELLERS

ACTIVE BUYERS (427M mobile)

PRODUCTS & SERVICES LISTINGS

On March 21st, 2016…

RMB 3 trillion milestone

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China B2C market penetration

Tmall is Asia’s largest B2C site

61,4%

Tmall + Taobao 86% on Mobile

86%

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Single Day: the largest shopping festival in the world

$14.4 bn GMV in 1 day

70% through mobile

140,000 transactions per second during the high moment

16,000 international brands (33%)

$2 bn in 8 minutes

467 M deliveries

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Globalization strategy

New embassies all over the world to help local SMEs to sell to China

Over the next decades we plan to help tens of millions of global merchants sell internationally

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Tmall opportunities

B2C B2C

Cross-border

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Online flagship store

with a real consumer experience

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Maserati Tmall page

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International brand flagship store on Tmall

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French brand flagship store on Tmall

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Tmall Global

TO DIRECTLY ENTER CHINA’S ONLINE RETAIL MARKET

Overseas merchants can join Tmall Global using the business

license of their home country

2014

Cross-border Cross-border

Purchasing power of Chinese consumers

216 280

364

480

624

1000

2013 2014 2015 2016 2017 2018 *in RMB billion

Source: Nilson

Cross-border Spending by Chinese Shoppers

x 5

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International Brand Flagship Stores on Tmall Global

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Marketing on the World’s largest billboard

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Success case on Tmall Global: Costco

40 million RMB in sales in first month

30 tons of mixed nuts and dried cranberries were shipped through bonded wareouse logistics model during 11:11

CHINESE CONSUMER KEY E-COMMERCE DRIVERS

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Video consumer

THE LINK TO WATCH THE VIDEO ONLINE http://ar.alibabagroup.com/2015/china-context/index.html

PARTNERSHIP AXA GROUP & ALIBABA

ALIBABA CLOUD

Alibaba Cloud Key Figures Since 2009…

No.1 Public Cloud vendor in Greater China

No.3 worldwide by 2016 Q1

over 2.3 million customers…

…including over 500,000 paying customers

3000+ employees o/w 80% developers

launched 22

new products

12 in big data

612 new features

& services

World-class Cloud Computing Business

2016 Q1

FY 2016

YoY growth

175%

YoY growth

138%

Revenue

RMB 1,066 M

Revenue exceeds

RMB 3 Bln

106% 128% 126%

175%

2015 Q2 2015 Q3 2015 Q4 2016 Q1

Série1

Triple-digit growth for 4 quarters

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Alibaba Cloud Services Portfolio

ODPS

ECS SLB RDS OSS OTS OCS CDN

CloudShield CloudWatch DPC ONS SLS OpenSearch

Hangzhou Qingdao Beijing ShenZhen HongKong US West

ACE

~230 CDN Node

ADS

Elastic Compute Database

OAS

Security & Admin Large scale compute

Storage & CDN

Extensive Services

Basic services

Infrastructure

Industry Solutions eCom. Fin. Gov. … Games Mobile IoT Media

ESS DRDS

PTS CDP

Application Services

VPC

Singapore

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Global footprints

Global coverage Hangzhou, Qingdao, Shenzhen, Beijing, Shanghai Hong Kong, US West, US East, Singapore. Coming soon: Europe, Japan, Dubai, Australia, India, …

CDN Network with Best Quality 500+ CDN nodes throughout China, 100+ overseas CDN nodes and a total bandwidth of 10 Tbps. BGP Access for Multiple Carriers Where ever your uses are, they will enjoy a same high-quality experience when accessing your services provisioned on Alibaba Cloud.

East Coast

Opened

West Coast

Coming soon Australia

Europe

Middle East India

Singapore

Hong Kong

South China

North China

East China

Alibaba Cloud’s

Global Data Centers

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Europe GTM Strategy

SMB and Startup will be the focus

Ecosystem (marketplace) and white label sales

Online marketing to drive the brand

awareness

Build Flagship cases

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Growing Number of Partners…

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China Connect

THE LINK TO WATCH THE VIDEO ONLINE https://intl.aliyun.com/chinaconnect

HOW TO ENTER CHINA E-COMMERCE?

How to enter China e-commerce?

You need to be everywhere

Every digital touch point, from SNS to Ecommerce platforms, is visited during the Chinese consumer journey. So you need to be present at every step to meet your customer.

du

Go through the B.A.T. is inevitable

Baidu – Alibaba – Tencent. They rule the digital landscape in China. It is a must to be at least in each of their platforms to be considered by the Chinese online users.

Existing digital strategies cannot be replicated

The Chinese ecommerce ecosystem is unique in the world. Hence, a Chinese specific strategy has to be created.

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How to enter China e-commerce?

CONSIDER THE MUTIPLICITY OF PLATFORMS IN ORDER TO CONNECT THEM MATCHING CONSUMER SPECIFICITIES

BE READY TO RETHINK YOUR BUSINESS MODEL WITH NEW PRODUCTS & SERVICES

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Q&A

THANK YOU