Why can’t successful western e-commerce websites simply replicate their success in China?

Bill Kohnen Pacific Rim E Commerce Conference

E COMMERCE SUCCESS IN CHINA

China is the biggest e-Commerce market in the world

Successful western e-Commerce as well as investors players desperately want to develop business in China

Notable failures because western companies did not address fundamental differences in expectations by customers in China

Bill Kohnen Pacific Rim E Commerce Conference

SUMMARY

Product Presentation

Shopping Experience

Merchants

Logistics

InfrastructureBill Kohnen Pacific Rim E Commerce

Conference

AREAS WHERE CHINA AND WESTERN

E-COMMERCE ARE DIFFERENT

More vibrantPeople important modeling productOften includes contextSee following examples of differences

between Western and Chinese e-Commerce presentationClothingComputer AccessoriesOffice Products

Bill Kohnen Pacific Rim E Commerce Conference

PRODUCT PRESENTATION

Western China

Bill Kohnen Pacific Rim E Commerce Conference

COMPARISON - CLOTHING

Western China

Bill Kohnen Pacific Rim E Commerce Conference

COMPARISON – COMPUTER ACCESSORIES

Western China

Bill Kohnen Pacific Rim E Commerce Conference

COMPARISON – OFFICE SUPPLY

Bill Kohnen Pacific Rim E Commerce Conference

Immediately presents interesting content (see following example)

Access to new and unique productsDetailed information of features for comparison

price and featuresRelevant product descriptionsTotal site localization (not just translation) Multiple and interesting views of product (5 +)Reassurance of trusted Payment processAlways some presentation of some gender specific

items with more focus on female interest items (examples: Hello Kitty, stuff ed animal, pop culture phone covers etc..)

SHOPPING EXPERIENCE

Bill Kohnen Pacific Rim E Commerce Conference

Western China

Comparison – Starting Page

Expectation that the e commerce site manages the merchants Authenticity Guaranty Fulfillment Quality Support Quality

New entrants overwhelmingly underestimate the importance of managing merchants and therefore do not allocate the right resources to do this: Supplier Management experts Quality Control Financial Auditors Logistics Professionals

Managing Merchant Performance is Vital To Develop Customer Trust Bill Kohnen Pacific Rim E Commerce Conference

MERCHANTS

Timely order processingReturn and exchange process

Expectations really not that much diff erent than western but it has been harder to meet expectations in China as logistics providers and process are not as developed as in Western countries.

In China companies can not simply turn over logistics responsibilities to “Fed Ex” or other third partes and expect customer expectations to be met.

Bill Kohnen Pacific Rim E Commerce Conference

LOGISTICS

Must have data center inside China Fire Wall

Western companies need strong partners in China but should not just hand over operational responsibility

Requires mutual long term commitment to develop robust reliable infrastructure

Bill Kohnen Pacific Rim E Commerce Conference

INFRASTRUCTURE